ahuja

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    Top Hedge Fund Managers: They Aren’t Wizards, but They Are Masters For Faille, the stand-out essay in this collection of case studies, from CNBC's Maneet Ahuja, concerns Marc Lasry and Sonia Gardner, of the Avenue Capital Group. As Myron Scholes says in his afterword to this volume, Lasry and Gardner take returns from those whose demand for liquidity makes them willing to give them up.

    Maneet Ahuja is going head-to-head with Jack D. Schwager, and his “wizards” books, in this new volume from Wiley. Though some of the resulting book will seem familiar, on the whole it is worth a look. Ahuja, a producer for CNBC’s Squawk Box, offers nine case studies, one chapter each, on the “alpha masters” who find their own “wildly unique” ways to outperform the broader market. These studies are packaged with her own brief introductory reflections, a foreword by Mohamed A. El-Erian, and an Afterword by Nobel Prize winner Myron S. Scholes. And there’s no reason Schwager should forever have a monopoly on this sort of collection. Ford’s Bank Debt The standout essay for me covers Marc Lasry and Sonia Gardner, of the Avenue Capital Group. This is the brother-sister pair that founded Avenue in 1995 and that has taken a leading role in the distressed debt space in the 20 years since. Their story gives us a perspective on the re-building of the U.S. auto industry after the global financial crisis. Avenue Capital started ...

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Dear Readers: We need your help! AllAboutAlpha.com has been selected to compete in WalletHub.com's 2015 Best Investing Blog Contest and we need you to get out and vote! We're honored to be a part of this prestigious group of blogs. Given that there are thousands of finance blogs out there and we've been chosen as one of the Top 50 is a tribute to all of you who read and contribute to AllAboutAlpha.com and for that I thank you. To get to the ...


The Skorina Report: The Best, The Rest & Our Pick for Public Endowment CIO of Decade

Charles Skorina looks at the top public endowments and discusses performance with Erik Lundberg.

This month we are pleased to bring you our annual survey of endowment performance at the Public Ivys, including many of America’s biggest, most prestigious, and best-endowed public universities. We think the performance of these endowments ought to be of interest not only to the endowment and foundation community, but to the investment world at large.  They include some extremely talented people getting results which rival investment organizations anywhere. And, they are important clients for many for-profit money managers all over the ...

Guest Posts


Vote for AllAboutAlpha.com for Best Investing Blog
"Vote early and vote often!"

Dear Readers: We need your help! AllAboutAlpha.com has been selected to compete in WalletHub.com's 2015 Best Investing Blog Contest and we need you to get out and vote! We're honored to be a part of this prestigious group of blogs. Given that there are thousands of finance blogs out there and we've been chosen as one of the Top 50 is a tribute to all of you who read and contribute to AllAboutAlpha.com and for that I thank you. To get to the ...


Investment Management Fees

Eurekahedge on Funds of Hedge Funds: A Downward Spiral
A new report by Eurekahedge says that the rise of new products such as hedge fund trackers and related developments since the global financial crisis have set the fund of funds world into a downward spiral whence it has yet to recover.

The latest Eurekahedge report says that in April, Asia ex-Japan funds delivered the best returns in the hedge fund industry, up 8.26%. This success was driven by the Greater China mandated funds, which benefit from optimism about “aggressive stimulus measures by the Chinese central bank.” Breaking the industry down by strategy: long/short equity funds were the standouts of the month, and have been the standouts for the year to date, too. More intriguingly, though, the new Eurekahedge report includes a section on key trends in the specific and beleaguered world of funds ...

Technology

What’s in a Copyright? Java API Case Before U.S. Supreme Court
High-stakes litigation between Google and Oracle approaches its resolution at the Supreme Court. For seekers of alpha, this isn't just about what investments to make, but about the way one goes about making them, the very mechanics of trading.

Innovation is threatened by certain of the legal systems that were created to incentivize it. It is threatened because there are intellectual-property claims everywhere one turns, and if new innovations are not allowed to build upon older work, innovation will become impossible. Whatever is fenced in, the fencing in the plains cannot become so predominate a fact that there is no common intellectual grazing ground. Nobody owns the standard arrangement of keys on a keyboard, an arrangement known as QWERTY, and one that has been in place since the early days ...

Technology

Northern Trust on Hedge Funds, Big Data and Transparency
The integration of data isn't fully on the hedge fund industry radar yet. Yet it may be critical to rebuilding manager-investor relations via whiz-bang 21st century technology.

Northern Trust’s new report about transparency in hedge fund holdings reminds me somewhat of the opening narration in the cheesy television show “The Six Million Dollar Man,” which ran on ABC from 1974 to ’78. The viewer sees an airplane crash and hears a narrative voice describe the pilot, Steve Austin, as “a man barely alive.” But, a character’s voice chimes in here, “We can rebuild him. We have the technology.” The phrase, “we have the technology” with the slight emphasis on have, has been employed ever since for circumstances in which ...

Hedge Fund Strategies

If I Can’t Call It a Hedge Fund, What AM I Going to Call It?
Intrepid contributor Doug Friedenberg addresses a burning nomenclatural issue for the investment style formerly known as hedge funds and proposes a solution to save the financial system.

Wall Street Journal, March 27, 2015: "One of the keys to running a hedge fund is learning how to say you don't. Grappling with years of uneven performance, image problems and deep-pocketed clients who have publicly distanced themselves from the industry, hedge-fund managers are taking pains to avoid the moniker." The problem may be a lot more serious than any of us think and threaten the global economic system. A few short years ago, western civilization was threatened by a proposed change in the taxation of hedge fund managers, if you read ...

Technology

Copper Prices: Why the Downslope?
How long will it take before the world again sees copper at around $10,000 a ton, the going price it touched (though briefly) in early 2011? Perhaps several more years and another full business cycle. There may be a lot of down before an upturn gets us there.

An underlying fact, noted here for example by our own Shane Brett a year and a half ago, is that “the easiest deposits of Copper … have been exhausted.” Combining that with population growth and the presumed effects of “easing” by various central banks around the world in goosing various economies, combine those facts in turn with the centrality of copper in the modern world, and one can reach the easy inference that copper has ...

CAPM / Alpha Theory

Lies, Damned Lies and Alpha
Guest columnist Andrew Beer looks at alpha.

There are three kinds of lies: Lies, damned lies and statistics.--Benjamin Disraeli Investors equate “alpha” to outperformance. A high alpha fund presumably delivers substantial excess returns relative to its benchmark. True alpha is short hand for manager skill. As we know, idiosyncratic returns can improve the risk adjusted returns of a diversified portfolio, and hence investors will pay high fees for “alpha.” Unfortunately, as a general rule, alpha is widely misunderstood and misused. Statistically, alpha simply is ...

Regulatory

Corporate Governance: Sunday in the Park With George
The controversy over corporate governance, and whether the changes favored by reformers show up as superior corporate performance (as measured, for example, by Tobin's q) strikes Faille as dangerously abstract. The only way to get to the pointillist painting is by starting with particular data points.

One much discussed question in the academic study of modern finance is: “does corporate governance really matter?” That question was the title of a classic paper on the subject by David F. Larcker of the Graduate School of Business, Stanford University, and two colleagues, in 2004. I hope to say something about that question, but I’ll also make an epistemological point in what follows. Let’s start by defining the question: does the whole nest of surrounding ...

Legislation/Court rulings

The STOCK Act Was Just For Show: Looking at the Inside of Insider Trading
What about the Congressionally employed leaker in a matter that looks like an insider tip to hedge fund traders? Is the SEC even allowed to ask? Shockingly, Congress wants special treatment for itself and its staff.

A fascinating bit of litigation, one with financial, constitutional, and even psychological significance, seems to have been frozen in place in the Manhattan district court since last New Years’ Eve. Yet it has received a flurry of attention amongst bloggers in recent weeks, as interested parties have made a belated discovery of what is at stake. The litigation in question arose because there is reason to believe that about two years ago Brian Sutter, the staff ...