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The Little Book of Hedge Funds

Book Description

The Little Book of Hedge Fundsthat's big on explanations even the casual investor can use

An accessible overview of hedge funds, from their historical origin, to their perceived effect on the global economy, to why individual investors should understand how they work, The Little Book of Hedge Funds is essential reading for anyone seeking the tools and information needed to invest in this lucrative yet mysterious world. Authored by wealth management expert Anthony Scaramucci, and providing a comprehensive overview of this shadowy corner of high finance, the book is written in a straightforward and entertaining style. Packed with introspective commentary, highly applicable advice, and engaging anecdotes, this Little Book:

  • Explains why the future of hedge funds lies in their ability to provide greater transparency and access in order to attract investors currently put off because they do not understand how they work

  • Shows that hedge funds have grown in both size and importance in the investment community and why individual investors need to be aware of their activities

  • Demystifies hedge fund myths, by analyzing the infamous 2 and 20 performance fee and addressing claims that there is an increased risk in investing in hedge funds

  • Explores a variety of financial instruments—including leverage, short selling and hedging—that hedge funds use to reduce risk, enhance returns, and minimize correlation with equity and bond markets

Written to provide novice investors, experienced financiers, and financial institutions with the tools and information needed to invest in hedge funds, this book is a must read for anyone with outstanding questions about this key part of the twenty-first century economy.

Table of Contents

  1. Cover
  2. Contents
  3. Title
  4. Copyright
  5. Dedication
  6. Foreword
  7. Introduction
  8. Chapter One: What is a Hedge Fund?
    1. Comparing Apples to Oranges
    2. Regulation . . . or Lack Thereof
    3. Size: The Achilles’ Heel
    4. Manager Fee: The Infamous Two-and-Twenty
    5. Investment Strategies: The Long and the Short of it
    6. Liquidity: Swimming in Pools of Money
    7. So, Do they Actually Hedge?
    8. The Proof is in the Pudding
  9. Chapter Two: The Parlor Cars of the Gravy Train
    1. Inside the Olive Pit
    2. The Secret is in the Sauce
    3. And the Beat Moves On . . .
    4. The Revenge of the Nerds
    5. And Now for the Not-Quite-as-Successful
    6. Emerging from the Ashes
    7. Where Are We Now?
  10. Chapter Three: Accessing the Inaccessible
    1. It’s All in the Name
    2. The Institutional Invasion
    3. Take Out Your Measuring Stick
    4. What It Boils Down To . . .
  11. Chapter Four: Heads We Win; Tails you Lose
    1. Keeping Up with the Joneses
    2. The Ends Justify the Means
    3. Even Cowboys Have the Blues
  12. Chapter Five: The Alpha Game
    1. The Alpha-Beta Song
    2. Another Theory, Another Definition
    3. Driving with One Foot on the Brake
    4. Putting Theory into Practice
    5. A Word of Caution
    6. Sometimes Diversification Just Ain’t Enough
    7. The Bottom Line
  13. Chapter Six: Ironing Out Inefficiencies
    1. A Kid in a Candy Store
    2. Times, They Are a Changing
    3. Living on the Edge
    4. Putting Theory into Practice
    5. The Efficiency of Inefficiency
    6. The Fact of the Matter . . .
  14. Chapter Seven: A Balancing Act
    1. Long/Short Equity—Borrowing from Peter to Pay Paul
    2. Relative Value—Two of a Kind . . . but Different
    3. Event Driven—One Man’s Loss is Another Man’s Gain
    4. Directional
  15. Chapter Eight: If you Can’t Beat ’Em, Join ’Em
    1. Stop Right There!
    2. Manager Selection
    3. The Screening Process
    4. The Never-Ending Process
    5. Filling in the Data
    6. Portfolio Construction
    7. Stay Alert . . . It’s Your Money
  16. Chapter Nine: The Men Behind the Curtains
    1. A Quick History Lesson
    2. More than Just a Middleman
    3. The Specifics
    4. Your Dream Team
    5. The Pluses . . .
    6. . . . and the Minuses
  17. Chapter Ten: From Wall Street to Park Avenue
    1. Wall Street’s Mass Migration
    2. Only the Strongest Survive
    3. Inside the Mind of a Super Capitalist
    4. A Quick Pop Quiz
    5. Scoring a Job at a Hedge Fund
    6. A Final Few Words: 15 Things I Would Do If I Were You
  18. Conclusion
  19. Appendix
  20. Acknowledgments