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There are only so many ways to make billions of dollars on Wall Street.
This is what we call "f--- you money."
This is the kind of money you can buy a plane with. That plane can take you anywhere you are invited, which is everywhere.
This is the kind of money that turns you into Bobby "Axe" Axelrod, the protagonist of Showtime's "Billions," who at one point embarrasses a group of blue-blooded WASPs by offering them a paltry $12 million to take their name off of a historic New York City building and replace it with his own.
If you haven't watched this scene, you absolutely should; it's painfully fun, just as schadenfreude should be. This is what you can do with f--- you money.
In the show, Axe made his money as a hedge fund manager. These are people on Wall Street who get paid exorbitantly for being smarter than the market. That is to say, they "generate alpha." No matter what the market does, they do better. Except when they do not.
And these days they do not. Over the past two weeks the "Masters of the Universe," as writer Tom Wolfe dubbed them back in the '80s, have met around the country to lament their inability to perform and to tell those who pay them that they will be back. It's just that, in their view, something in their industry has to change.
"One of my biggest worries is that there are so many players out there trying to do the same strategies ... If one big one goes down, will we take collateral damage?" billionaire money manager Steve Cohen of Point72 Asset Management asked from his Beverly Hills Hilton seat at the Milken Global Conference earlier this month.
From Los Angeles to Las Vegas, billionaire after billionaire said the same thing as they explained the plight of their industry. There are simply too many of us, they repeated.
So please, kindly stop dreaming of being a billionaire.
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Put it back in the bag, please
The hedge fund industry was started by a spy and a journalist named A.W. Jones back in 1949. It should be no surprise, then, that until my (short) lifetime these funds were rarely part of the public discourse. Jones thought he could mitigate investing risk by going long stocks that would go up while at the same time shorting stocks that would go down — he would hedge.
It wasn't until the 1980s, when America was wowed by wealth and labor was getting crushed, that hedge funds started entering the public conversation.
PBS did a documentary on Paul Tudor Jones, the founder of Tudor Investments. It's considered a classic, though Jones was notably embarrassed by the whole thing.
By the time the financial crisis happened, Wall Street and those who pay even a little attention to it was fully aware of hedge funds. Those who saw disaster coming were rewarded handsomely for it. They made billions — they made f--- you money.
Weak hands
Now back to Cohen, who according to Forbes is the 72nd-richest man in the world with $12.7 billion. At his talk at Milken, he shared the stage with Cliff Asness of AQR Capital and Neil Chriss of Hutchin Hill.
All of them were quite candid but none as much as Cohen. He said that in February his "worst fears were realized" when the market started tanking, led by pain in China.
His fund lost 8%, unheard of at his secretive, disciplined shop. It seemed that everyone in hedge fund land was on the same side of every trade. This is what happens when the market dries up and there is no liquidity.
"When this business started the guys were proud of the returns they generated, 30, 40%," Cohen said, implying that those days were over.
Chriss agreed. He said in the '90s hedge funds "delivered something very special." Not anymore, not for now at least.
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And indeed, the following week at the SkyBridge Alternatives Conference in Las Vegas (that's where all the private jets went after Los Angeles) an entire panel, the second of the conference, was dedicated both to what happens when liquidity dries up and to the industry's failure to generate the returns it once did.
This was all anyone could talk about through mouthfuls of muffins and desperate gulps of "Bellagio" coffee.
Ken Griffin of Citadel, whose net worth clocks in about $7 billion, said at SALT that we are now "more and more in a winner-take-all world." He said that at his $25 billion firm the aim was to be in the top trade in every sector, not necessarily to find value where no one else sees it.
You can imagine how that philosophy might make for crowding too. And you don't want to be in a crowd with these guys. They tend to push quite hard.
If you want to hear more billionaires slamming the industry for anemic returns, hear Jim Chanos of Kynikos Associates talk with Business Insider's Linette Lopez and Josh Barro on their podcast, "Hard Pass":
SEE ALSO: I went to the biggest Wall Street party of the year and everyone was miserable
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Still, Cohen has a long way to go until he can reclaim everything he has lost to the federal government, the ex-prosecutor said.
The SEC maintains that Cohen failed to supervise Mathew Martoma, another former trader who 
Yet the hedge fund industry has continued to grow since the crisis in terms of a
Point72 Asset Management, the $11 billion family-office hedge fund led by Steven A. Cohen, has 
"Very simply, if you're not looking for the next generation of talent on social media, you're waiting on the wrong corner for your Uber to arrive," Herr wrote.
Put it back in the bag, please