Sure. In a fair world, a good investment manager should make about the same amount of money that a good doctor does. I should amend that: the same money a good doctor makes, risk adjusted. A good physician is going to make a steadier stream of money than the manager of a hedge fund. Still, in general, all the way through the investment management industry, from hedge fund managers to the guys and women who run mutual funds, everyone is overcompensated.

Risk adjusted, the safest and the most overcompensated business of all is private equity. But the world has a built-in, fantastically powerful leveling mechanism. In the long run, those with excessive compensation will be leveled out.

Another character in your book is Vince, who believes the end of capitalism is nigh. Vince says the best hedges against doomsday are an assault rifle and canned goods, and maybe a home in New Zealand. He is right that most Americans have not seen true catastrophes, although 9/11 and the last hurricane season gave us a glimpse. What would you do if something unforeseen brought us to doomsday?

The trouble is, in the modern world doomsday doesn’t advertise itself. By the time it comes, it’s too late. I suppose if you are truly wealthy you ought to have a farm in the deep countryside that is totally self-sufficient, though there is no way to really protect yourself and your money. Three or four of the hedge fund managers I know have places in New Zealand. I think that’s ridiculous. If there is a derivatives failure or a nuclear attack, they’re going to get onto their G5’s and fly all the way to New Zealand? They’d run out of fuel before they got there.

It’s nice to say you can protect yourself by having $20 million in treasury notes, but in a real doomsday scenario, U.S. treasuries would likely be worthless. Some years ago in Hong Kong, I met with an elderly man who had been a general in the Chinese Nationalist army and had seen it all. He said quality jewelry was the best disaster hedge–better than gold. This kind of hedge has to be highly portable, easily hidden and very marketable. Some of the Jewish refugees from Europe in 1939 and 1940 took their jewelry and art that they could fold up. But the limitation of these assets is that they don’t earn more assets.

Here’s a true confession. The youthful Barton Biggs, an English and creative writing major at Yale who wrote short stories, was so oblivious to economics that "when the then-chairman of the Fed, William McChesney Martin, came to dinner and he and my father talked about the economy I didn’t even bother to listen."

You can only write about what you know. My short stories were about the third string quarterback and a misbehaving PFC in the Marine Corps. Nothing cosmic. Our monthly letter to investor partners is about the extent of my writing now.

Can you predict the future accurately?

Sure, sometimes. I think I predicted the future accurately in late 1999 and 2000, about tech. And obviously I predicted it inaccurately in 2004 about the price of oil.