Difference between Hedge Fund and Private Equity?
Private Equity is simply some type of an investment company, which is owned in a way not accessible to the public. ie: Warren Buffet runs Berkshire Hatheway, which is an investment company which itself is traded on the New York Stock Exchange. This means that anyone can buy shares in the company, and own a small fraction of it. If Warren Buffet owned all the shares of Berkshire Hatheway, it would be a Private Equity company. Note that 'Equity' refers to the ownership of the company itself; a private investment company may simply buy Bonds (which are a form of Debt), in which case, they would not be technically considered a 'Private Equity' company. A Hedge Fund is a very broad term which I don't believe has significant meaning. Technically, it means something along the lines of an investment fund (either public or private) which attempts to hedge the risks of its portfolio, by carefully considering what type of investments it purchased. This refers back to the meaning of 'hedge', ie: 'hedging your bets'. In my opinion, 'Hedge Fund' is not meaningfully different from 'investment fund' or other similar terms. It is just the most popular way to refer to this type of industry at the present time.  You can see the trend of using the term 'investment fund' vs 'hedge fund' using this link: https://trends.google.com/trends/explore?date=all&q=hedge%20fund,investment%20fund Note that the high-point of the use of 'hedge fund' occurred on October 2008, right at the peak of the global financial crisis. The term evokes a certain image of 'high finance' / 'wall-street types' that may exploit various situations (such as tax legislation, or 'secret information') for their own gain. Without a clear definition, however, it is a term without much meaning. If you do a similar comparison between 'hedge fund' and 'private equity', you can see that the two correlate very closely; I believe the term 'private equity' is similarly misused to generally refer to 'investment bankers'. However in that case, 'private equity' has a more clear definition on its own merits.
"to answer the question in the title of your post...  + convince your fellow Euro nations to accept austerity,  + convince them to elect responsible governments,  + demand transparency from your leaders, and...  + make sure this never ever happens again.   Alternatively, build a time machine and go back in time to either...  + immigrate to another part of the world,  + sabotage the corruption of the PIGS nations,  + prevent the formation of a shared currency, or finally,  + do something to ensure Germany didn't lose WWII, as letting them be in charge of everybody's money would appear to be a sound financial decision.   That is how you negate the impact of the Euro collapsing.  Now, on to the details of your question...  I believe your initial assessment is correct. If one accountable nation were responsible for the solvency of its currency, it could be trusted indefinitely. As is the case with the Euro, as no one country is directly responsible for it, the less responsible governments are in a race to exploit it as much as possible.  Remember, ""Spain no es Zimbabwe!""  I think Euro zone nations will be lucky if all that comes of this is the fall of the Euro. Wars between nations have been fought over less significant developments than what Greece, Italy and Spain have done to the financial stability of their Euro zone counterparts.  Foreign gold trusts, possession of physical precious metals and precious metal ETFs (GLD is one stock ticker of such a fund, although I would look to a similar fund issued by a company with better physical gold audits) can hedge your currency risk. Check with local laws regarding physical possession of gold. In the USA when we left the gold standard for our currency, the government confiscated all privately owned precious metals and raided customer bank security boxes. Assess your own risk of that sort of thing happening." DB runs hedge funds that own stock in both companies, has a US bank that lends to both companies, has a US equity division that trades the stock of both companies, is a prime broker to hedge funds that own stock in both companies. They are also a lender to private equity firms that own transportation and logistics companies.   However, I agree with the point you are trying to make about a person heard from another person who heard from another person "http://www.businessinsider.com/who-owns-us-debt-2011-7?op=1  Foreign governments own about 32% of U.S. debt.  It's not a majority, but it's still nothing to sneeze at.  Social Security owns 19%  ""The Fed"" owns 11+%  U.S. Households (including hedge funds) own 6+%  Private Pensions 3+%  Money Market Mutual Funds 2+%  State, Local, and Federal Retirement Funds 2+%  Commercial Banks 2%  Mutual Funds 2%  Oil Exporting Countries 1.6%  Caribbean Banking Centers 1%" Buying a put is hedging.  You won't lose as much if the market goes down, but you'll still lose capital: lower value of your long positions. Buying an ultrashort like QID is safer than shorting a stock because you don't have the unlimited losses you could have when you short a stock.  It is volatile.  It's not a whole lot different than buying a put; it uses futures and swaps to give the opposing behavior to the underlying index.  Some places indicate that the tax consequences could be severe.  It is also a hedge if you don't sell your long positions.  QID opposes the NASDAQ 100 which is tech-heavy so bear (!) that in mind. Selling your long positions gets you out of equities completely.  You'll be responsible for taxes on capital gains.  It gets your money off of the table, as opposed to playing side bets or buying insurance.  (Sorry for the gambling analogy but that's a bit how I feel with stock indices now :) ). This article is simply a discussion of the author's own stupidity. In no way does a liquidation preference effect the value of a company. Share class? Yes definitely.  The issue comes from applying the price of a preferred funding round to a fully diluted basis as is often quoted in financial media. Value doesn't always just equal basic p * q @Victor above has provided a very good answer, I shall try and highlight some differences. The differences are specific to a country, however, it does offer some insight regarding the difference between investing in retirement fund vis-a-vis investing in stock directly: In many countries the retirement fund is mandated by the govt. and has to be invested in (in form of direct deduction from salary) ~ Investing in stock is up to the individual In many cases (if not most) capital gain/interest accrual in retirement funds are not taxable ~ Depending upon current laws capital gain (long term/short term) from stocks are taxable Retirement funds are managed and are (in general) more stable in their returns ~ Returns from direct stock investments are dependent on investment decisions of the investor Retirement funds tend to, (though this is very country specific) return somewhat less than market, as an example, in India Public Provident Fund (PPF)/Employee Provident Fund (EPF) return 8.68% tax free ~ As for direct investment on stocks, Nifty has returned approx. 17% CAGR over 15-20 years. Given the above, if you can invest in stock by taking informed calls and you have a good understanding of the financial markets and their underpinning and (probably) looking at long term investment, then investing directly in stock could fetch returns that might not be paralled by retirement funds. If on the other hand, if you feel investing in stock is not for you, then it probably is better to stick with retirement funds and other low risk investments. Either way, you probably have to (and may be you should) carry some portion of your portfolio as retirement funds. Fair, but to the first point, taking action on the climate change/stranded asset risk would disqualify the fund as a passive investment. Half the point of passive funds is to take that part of risk out of the equation - poor investment decisions - and rely on the average S&amp;P500 performance instead.  I get the second point, though I question whether that point has validity until activist investors are in significant, which is a long way off. Haven't read this but will, thanks.  I would agree with you that there are certain aspects and forms of private equity that could be considered reprehensible. First, carried interest probably isn't the fairest thing in the world. But that's not going to last much longer. I think you could also argue that SOME hostile takeovers approach the reprehensible. An example off the top of my head would be Carl Icahn and TWA. I would argue on the whole, however, that most hostile takeovers are accretive in the sense that you're taking out management that is either being tremendously negligent, or destroying value all together.   In both of those instances you can make succinct and well thought out arguments. But this isn't what's happening with Bain. On the whole I would disagree and argue that PE backed restructurings are accretive to the economy as a whole.