I’ve always been curious about the operation of hedge funds, which are almost by nature obscure from public view. Donald MacKenzie’s piece in the last London Review offers a better primer than I’ve found elsewhere. For example, there’s this tidbit about the first hedge fund’s basic strategy:

By adding modest borrowing to, let’s say, $100,000 of investors’ money, Jones might buy $110,000 worth of the shares in companies he liked, while simultaneously short selling $40,000 of shares he thought might do badly. He was thus partially insulated (‘hedged’) against overall market movements. If the overall market fell, the shares he had bought (his ‘long positions’, in market terminology) would lose money, but his short positions would gain because buying back borrowed shares would now be cheaper.