Today in "Politics Is a Great Investment" 


Hedge fund billionaire Robert Mercer is one of the biggest Republican donors in America. His years-long financial support for Donald Trump has been cited as the reason Trump is president today. The good news: This investment should pay off handsomely for him.

Not just in access, or proximity to power, or regulatory influence—the usual things that are bought with political donations. No, Robert Mercer’s direct financial benefit as a result of Donald Trump’s election could be absolutely grand. This Bloomberg story today explains why: You see, Mercer is co-CEO of Renaissance Technologies, a hedge fund firm that has one fund that is so good that it only allows its own employees to invest in it. The fund, known as Medallion, has, for more than two decades now, generated real annual returns of 40%. It is a virtual money-printing machine. Because it is harder for hedge funds to maintain their high returns once they grow past a certain size, the company limits how much money each employee is allowed to invest in Medallion. Needless to say, the opportunity to invest more is equivalent to handing each employee a significant raise.

And late last year, Bloomberg reports, the Medallion fund made the judgment that Donald Trump’s victory had made the market conditions so promising that they would accept a huge chunk of new money from each employee. Robert Mercer himself reportedly added an extra $100 million to his Medallion investment. If Medallion continues to post the same level of return on investment that it has for the past two decades, that would mean that in one year, this new money that Robert Mercer was allowed to put into Medallion as a result of Trump’s win would return a profit that is greater than all of Mercer’s political donations for the 2016 election cycle. (Interestingly, the other CEO of Renaissance, James Simons, is a major Democratic donor. He too will profit handsomely from this. As is usually the case, billionaires win regardless.)

Democracy is the single most profitable thing that rich people can buy.

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