The wealthy have an edge on the everyday 99 percent when it comes to investing. (And, no, I don't just mean that they have more money). They get to invest with hedge funds run by the best, smartest financial gunslingers on Wall Street. The hedge fund industry includes a number of investing titans, such as George Soros and Julian Robertson. To invest in a hedge fund is to become a member of an exciting, daring, and exclusive investment club. (You need at least a million to hazard to play.) Maybe not.

When it comes to investing, perhaps it's better to be dull, boring and prudent. I'm not kidding. I just read a review by George Melloan, former deputy editor of The Wall Street Journal editorial page, of Simon Lack's The Hedge Fund Mirage. Melloan makes me want to read the book. This calculation stood out:      

In "The Hedge Fund Mirage," he [Lack] asserts what he calls -- with some justification -- an "amazing" finding: "If all the money that's ever been invested in hedge funds had been put in Treasury bills instead, the results would have been twice as good."

Treasury bills left hedge funds far behind in the performance sweepstakes. It's a stunning number. The figure also adds to my concern about the embrace of hedge funds by pension funds. In a world of low interest rates and low returns, pension fund managers are turning to hedge fund luminaries to goose their returns. Big mistake.

He [Lack] provides plenty of numbers to back up his central thesis that hedge funds have been highly overrated in public discourse, mainly because a few operators like George Soros have built famously huge fortunes. The reason that operators sometimes get filthy rich, he writes, is that they reserve for themselves the lion's share of the profits. He asks that sardonic Wall Street question, "Where are the customers' yachts?"

The "sardonic Wall Street question" comes from a 1940 book by Fred Schwed Jr., Where Are the Customers' Yachts? It's worth repeating the allegory that starts off the book.

Once in the dear dead days beyond recall, an out-of-town visitor was being shown the wonders of the New York financial district. When the party arrived at the Battery, one of his guides indicated some handsome ships riding at anchor.  

He said, "Look, those are the bankers' and brokers' yachts."  

"Where are the customer yachts?" asked the naive visitor.  

Where indeed?

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Follow Chris Farrell at @cfarrellecon