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Profiting from Hedge Funds: Winning Strategies for the Little Guy

Book Description

Learn to apply the strategies of top hedge fund managers to your personal investment portfolio

The most successful hedge fund managers and superstar investors outperform the markets impressively, while most fund managers—and individual investors as well—usually underperform the market averages. Based on the figures released by the Edgar System each quarter, this book analyzes the performance of hedge fund managers controlling at least $100 million in Assets Under Management to help other investors close the gap between themselves and the industry's top fund managers. With model portfolios that produced solid returns, examination of the tactics of the best fund managers, and a set of effective strategies for sound absolute returns, Profiting from Hedge Funds is the perfect guide for investors who want to improve their game by learning from the best.

  • Includes fascinating insights into the investment styles of the most successful hedge fund managers

  • Features model portfolios based on the holdings and activity of high-performing money managers

  • Offers key lessons for success that work across all portfolios

Table of Contents

  1. Cover
  2. Contents
  3. Title
  4. Copyright
  5. Dedication
  6. Acknowledgments
  7. Preface
  8. Part One: Tracking 12 of the Greatest Money Managers
    1. Chapter 1: Introduction
      1. 13Fs: A Window into Hedge Fund Activity
      2. Filtering 13Fs for Relevant Activity
      3. Raw 13F Filings from EDGAR
      4. Notes
    2. Chapter 2: Bill Ackman
      1. Philosophy and Style
      2. Marquee Trades
      3. Portfolio Analysis
      4. Notes
    3. Chapter 3: Bruce Berkowitz
      1. Philosophy and Style
      2. Marquee Trades
      3. Portfolio Analysis
      4. Notes
    4. Chapter 4: Warren Buffett
      1. Philosophy and Style
      2. Marquee Trades
      3. Portfolio Analysis
      4. Notes
    5. Chapter 5: Ian Cumming and Joseph S. Steinberg
      1. Philosophy and Style
      2. Marquee Trades
      3. Portfolio Analysis
      4. Notes
    6. Chapter 6: David Einhorn
      1. Philosophy and Style
      2. Marquee Trades
      3. Portfolio Analysis
      4. Notes
    7. Chapter 7: Carl Icahn
      1. Philosophy and Style
      2. Marquee Trades
      3. Portfolio Analysis
      4. Notes
    8. Chapter 8: Seth Klarman
      1. Philosophy and Style
      2. Marquee Trades
      3. Portfolio Analysis
      4. Notes
    9. Chapter 9: John Paulson
      1. Philosophy and Style
      2. Marquee Trades
      3. Portfolio Analysis
      4. Notes
    10. Chapter 10: Wilbur Ross
      1. Philosophy and Style
      2. Marquee Trades
      3. Portfolio Analysis
      4. Notes
    11. Chapter 11: George Soros
      1. Philosophy and Style
      2. Marquee Trades
      3. Portfolio Analysis
      4. Notes
    12. Chapter 12: David Swensen
      1. Philosophy and Style
      2. Marquee Trades
      3. Portfolio Analysis
      4. Notes
    13. Chapter 13: Prem Watsa
      1. Philosophy and Style
      2. Marquee Trades
      3. Portfolio Analysis
      4. Notes
  9. Part Two: Mechanical Approaches to Following the Masters
    1. Chapter 14: Introduction
      1. Manager Selection
      2. Asset Allocation and Sentiment Capture
      3. Risk Avoidance
      4. Constructing Model Portfolios Mechanically: A Primer
      5. Equal Allocation Largest Positions
      6. Equal Allocation Largest New Positions
      7. Weighted Allocation Largest Positions
      8. Weighted Allocation Largest New Positions
      9. 10-5-2 Allocation Largest Positions
      10. 10-5-2 Allocation Largest New Positions
      11. Notes
    2. Chapter 15: Equal Allocation Models
      1. Portfolio Management and Performance Analysis
      2. Bill Ackman: Largest Three
      3. Warren Buffett: Largest Three
      4. David Einhorn: Largest Three
      5. Combined Portfolio: Largest Positions
      6. Combined Portfolio: Largest New Positions
      7. Summary
    3. Chapter 16: Weighted Allocation Models
      1. Portfolio Management and Performance Analysis
      2. Bill Ackman: Largest Three
      3. Warren Buffett: Largest Three
      4. David Einhorn: Largest Three
      5. Combined Portfolio: Largest Positions
      6. Combined Portfolio: Largest New Positions
      7. Summary
    4. Chapter 17: Ten-Five-Two (10–5–2) Allocation Models
      1. Portfolio Management and Performance Analysis
      2. Bill Ackman
      3. Warren Buffett
      4. David Einhorn
      5. Summary
    5. Chapter 18: Alternate Models
      1. Portfolio Management and Performance Analysis
      2. Bill Ackman: Exact Match Approximation Model
      3. David Swensen: Asset Allocation Model
      4. Sector Rotation Model
      5. Simple Moving Average (SMA) Based Model
      6. Summary
      7. Note
  10. Part Three: Learning from the Masters
    1. Chapter 19: Introduction
      1. Beating the Managers at Their Own Game
      2. Trading Alongside the Managers
      3. Summary
      4. Notes
    2. Chapter 20: Fundamental Analysis
      1. Margin of Safety
      2. Basic Checklist
      3. Business Understanding
      4. Business Sector and the Company’s Standing
      5. Management Integrity and Competency
      6. Valuation
      7. Emotional Stance
      8. Quantitative Measures
      9. Profitability Indicators
      10. Management Effectiveness
      11. Liquidity Indicators
      12. Valuation Indicators
      13. Fair Value Estimates
      14. Risk-Free Equivalent Fair Value
      15. Fair Values Based on Earnings Growth
      16. Fair Values Based on Benjamin Graham’s Teachings
      17. Fair Values Using Present Discounted Value
      18. Summary
      19. Notes
    3. Chapter 21: Types of Positions and Sizing
      1. Diversification and Hedging
      2. Keeping Your Powder Dry
      3. Building and Sizing Positions
      4. Low Probability Positions
      5. Summary
      6. Notes
    4. Chapter 22: Conclusion
      1. Ad Hoc Cloning Strategies
      2. Mechanical Cloning Strategies
      3. Implementing Manager Strategies
  11. About the Author
  12. Index