The Alpha Masters: Unlocking the Genius of the World's Top Hedge Funds PDF
Preview The Alpha Masters: Unlocking the Genius of the World's Top Hedge Funds
Contents Foreword: The Less Mysterious World of Hedge Funds Preface Disclaimer Chapter 1: The Global Macro Maven The Makings of a Maven Coming of Age through a Crisis Building Bridgewater Winning Over the World Bank Belly Up: Learning from the Bad Calculating Crises Foreseeing the Financial Crisis Extracting Alpha Bringing Home the Alpha Fund in Focus Procuring the Principles Watchful Eye on the World Today Going After What You Want Chapter 2: Man versus Machine Tim Wong: The Engineer Pierre Lagrange: The Money Maker Chapter 3: The Risk Arbitrageur The Making of a Risk Arbitrageur It’s Not All Numbers The Stuff of Legends Knowing What You Don’t Know “I’m Sort of an Independent Person” The Greatest Trade Ever Mispriced Risk: Dow/Rohm & Haas Jumping into the Deep End: Citigroup Good as Gold A Little Help from His Friends Fighting Back Chapter 4: Distressed Debt’s Value Seekers The Auto Bailout Brother-and-Sister Partnership Catching the Eye of Robert Bass Killer Combination Detecting Diamonds in the Rough Extracting the Value Chapter 5: The Fearless First Mover Gearing Up at Goldman Pulling in the Profits “A” for Appaloosa The Early Days No “A’s” in High School Learning and Earning Fierce and Fearless Titanic Track Record International Intrigue Russian Roulette Bullish on Bankruptcies Delphi Dilemma WaMu Winner The Force Behind Financials The ABC’s: AIG, BAC, and C Sizing Up the Sweet Spot Chapter 6: The Activist Answer Bright Beginnings Getting Gotham Going The School of Rock Making a Name for Himself Return on Invested Brain Damage Buying the Farm Rising from the Ashes Fast Food, Building Record Results Making Cents at McDonald’s Borders and Target: A Couple of Clunkers Zeroing in on Target MBIA A Dud The Greatest Trade A Penney for His Thoughts Canadian Pacific on the Rails What Makes an Activist Chapter 7: The Poison Pen The Young Whippersnapper Finds His Way Catching the Big Wave in the Storm Evolution and Revolution The Third Point Tao and Team Approach Chapter 8: The Cynical Sleuth Cause for Cynicism The Contrarian Investor The Secret Sauce of Short-Selling Defending an Investment Strategy China’s Coming Crisis Back to Business School Basics Chapter 9: The Derivatives Pioneer The Rise of a Trailblazer “Lehman Weekend” at the Fed The Technicalities of the Trade Afterword Appendix References Acknowledgments About the Author Index Copyright © 2012 by Maneet Ahuja. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at www.wiley.com/go/permissions. Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762-2974, outside the United States at (317) 572-3993 or fax (317) 572- 4002. Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. For more information about Wiley products, visit our web site at www.wiley.com. Library of Congress Cataloging-in-Publication Data: Ahuja, Maneet, 1984- The alpha masters : unlocking the genius of the world’s top hedge funds / Maneet Ahuja. p. cm. Includes index. ISBN 978-1-118-06552-5 (cloth); ISBN 978-1-118-16759-5 (ebk); ISBN 978-1- 118-16758-8 (ebk); ISBN 978-1-118-16757-1 (ebk) 1. Hedge funds. 2. Investment advisors. I. Title. HG4530.A389 2012 332.64’524—dc23 2012010363 To God — The Ultimate Alpha Master Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac’s talents didn’t extend to investing: He lost a bundle in the South Sea Bubble, explaining later, ‘I can calculate the movement of the stars, but not the madness of men.’ If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases. —Warren Buffett
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