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Rather than mounting a confusing show, maybe the county pension system could have better spent $10,000 on some due diligence of Amaranth Advisors, the hedge fund whose collapse opened a window into what the county of San Diego’s pension fund was investing in.

Looks like somebody saw the flaky hedge fund for what it really was. And it wasn’t that difficult. Last summer, the London-based firm Fauchier acquired a company with a large stake in Amaranth. So Fauchier representatives took a trip to Amaranth’s Connecticut offices last summer to see what it was all about. They were so scared about what they discovered, they paid a big fee just to get their money out.

In a letter to his investors yesterday, Christopher Fawcett, co-founder of Fauchier, said that his team had spotted no fewer than 11 red flags after visiting Amaranth. He wrote: “Following on-site meetings with [Amaranth]founder Nick Maounis and his team, we decided to redeem from the fund.”

And Fawcett gets specific about the red flags he saw at Amaranth:

These included the lack of an independent third-party administrator verifying returns, insufficient risk controls and the passing through of company expenses to the fund.

High leverage, poor transparency and an hubristic management team were other unnerving signals, as was Amaranth’s well-known reliance on a single trading strategy – energy trading.

Read the story. Maybe we could pay Fawcett a few grand to fly out here and give us a workshop of his own.

But county pension officials did spend money – more than $400,000 last year – on consultants from the firm Rocaton to help them investigate and do their “due diligence” of funds like Amaranth before they invested. Get this: At the same time this English investor discovered these 11 red flags about the hedge fund and decided to flush his newly acquired position in Amaranth like a dead fish, the San Diego County employees pension system was paying big bucks to Rocaton to study Amaranth.

And what did these high-priced advisors recommend after their investigation?

Buy baby, buy.

And boy did the county pension system buy. Right after Fawcett jumped from Amaranth’s shady ship, the retirement fund made what appears to be one of the largest investments in Amaranth: $175 million. County officials are now thinking of filing a lawsuit to see if they can get any of their money back at all.

Up until last month, as in September, Rocaton still recommended that its clients invest in Amaranth.

SCOTT LEWIS

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