HEDGE HUNTERS; hedge fund Masters on the rewards, the Risk and Reckoning' By Katharine Burton

Author; Katharine Burton

Published by; Bloomberg Press

Year; 2007

Pagination; 206

ISBN; 978-1-57660-245-4

Reviewed By; Iroabuchi Onwuka




The theme


The book is about Hedge Fund managers who rose to the repectable ranks of senoir advisers and managers of large funds. Such masters include Michael Steinhardt whose father saw him through education inspite of the gambling problems, Marc Lasry, Lee Ainslee, Boone Pickens; the 'impertubable oil man', Dwight Anderson, Josh Friedman, Brain Bradshaw, Julian Robertson, Daniel Loeb, Richard Perry, Craig Effron, etc. The book is entirely their story covering how they faired in their prospective businesses in times of trial and in times of truimph. In one clear langauge, Hedge Hunters is a book about the trials and triumphs of successful business men in an era of business uncertainty. It is not an understatement that people are interested in the history behind these successful men and women given the rise of Hedge Fund mangement and hunters since the late 70's, but how their story is brokered to the public in light of earlier successes is what the book essentially provides. The book is therefore suggesting the left and right of the demands of the business and how newcomers as well as old can profit from them. Hedge Hunters is published published by Bloomberg Press.


The Body


The success of this book lay not in its story but on the organising principle evident, so to speak, in these famous lives. If the author is willing to conduct a second survey of these lives, given the advent of the 2008 financial collapse, then there is room for the book to do much better in the book stands and in content. If the book did not make it big in the streets, it is probably due to the basic assumptions evident in the famous lives she treated. The profile of the book is a basic journalistic outline constructed mainly on Q and A, with the author providing a summary of the whole. Is she failed to hint on how the evolution of the hedge fund industry effected these lives and how these lives changed the industry completely, it for the simple reason that the book mainly highlighted the brighter days of these success story, as if the author was intent on forcing a success of the book by clipping the beautiful side of their stories without deeper probe into these stories and these lives.

The above statement does not mean that the author provided little or no light on the future of the industry neither does it mean that she cast enough doubt of a monolith's financial industry. The light she provided is my own opinion sincere that the industry is exceding its boundry, but such statements about the future of Hedge Industry is to be expected for it serves in many ways an interesting commentary. But a woman seeking to knock the common prejudices of the Hedge Fund Industries, should have gone an extra mile of providing the pros. of the Hedge Industries - archieved through the lives of the named Hunters - and the cons. of Hedge Hunting through the unnamed who did not survive the market, who are forgotten. She would used the platform of endeavor to demonstrate why women may or may not have prospered and how the missing half of the industry may or may not have wondered why.

Hedge Hunters as a literal work belong to the genre of 'Wall Street Wizards' the predecesor to the 'Wizards of Wall Street Wizards' and 'New Wizards of Wall street', but unlike these books that illustrated the basic facts of the interview in question, Hedge Hunters draw from the top and bottom of few people concerned. In many ways what you wind up reading is the inter-connecting stories of people who worked in certain capacity within the industry and how they used their influence to perfect their role as managers. These businesses stemming from the individual who trained them and the school of Hedge Fund they represented. In many ways, it is the face of the people who mastered the act of Hedge fund market that we read but in reading, we learn of the schools of influences that made this individual decided in business.

While these names will make us wonder at the sense of the book, it becomes gradually clear that certain people did not rise to the top of current business community without family problems and without hardwork. For instance Michael Steindhart and his jailed gambling father who managed get to pay his son's way through the college as a promise to the young man inspite of his personal failures. The case of Steindhart as an industry by himself began from his years as a young man trying out his hands in the family business and then the decided to build on that luck and family Trust what will become a successful business group. The story of Steindhart open a flood of insights into what makes anyone successful, that discipline and luck go and globe, but sometimes you need to be in action to find what area is best suited for you.

Then there is Marc Lasry whose story provide us with account of his 'intorelance for losing', but the relationship between risk and losses and the psychology type it tend to suggest was not mentioned in the book, except in the context of the next pick in the role of Craig Effron. This may reveal a contradictory nature of the man, perhaps an element of 'risk management' which Burton did not explioit. In that contradictory sense, we read of Marc Lasry saying that "everyone sees the same situations, but there are only a few who end up investing and even fewer of those who do well" and in the book, the author Katharine Burton seem to recognise this very part of Lasry well in paraphrasing his statement that "the art of investing, says Lasry is about seeing opportunnities that other managers don't see". From a man who has a knack for risk to the very man with a stronger knack for losing, the question is why does he, Marc Lasry, try to bet on probability. The answer to the question lay not in what he is saying but in what he does which in that sense is the secret of behind the strong will of the Hedge Huntes. The book goes on to cite for instance the debacle of Asian Markets of 1997 and 98, there was a lot of gaps in the Asian marekets, and according to Lasry not many people went to look at the stocks available. If they had, they would have discovered that the values of these companies were just suppressed, many of them were actually good companies.

The book goes to demonstrate other groups of money managers, Boone Pickens who she termed the 'impertubable oil' and his picks in the business which include Brain Bardshaw, David Meaney, Michael Ross and Alex sweczyk, all of whom believe in making out the small caps that have a tendency to rise-small cap to Big Cap. These individuals Pickens believe will lead the new era of Hedge Fund management. Then there are great ones like Dwight Anderson and Match Julius 'Doyens of Debt' who use their knowledge of Debt recovery and Bankcruptcy expertise to buy debt ridden companies with a view of helping their recovery from it and then the pay. Their picks include Jeffery Schachter adn Burtin Weinstein. Dwight Anderson called the 'Phoenix Phenomenom', whose pick is shown in Roberto Migone, perhaps the only hedge fund managers to compare true line freakonomics with the reality of surviving the hedge fund industry. Then there are others like Julian Robertson, Richard Perry, Daniel Loeb, Jim Chamos, who are posses a distinct degree of personal discipline and personal ability as 'manager's manager', among other risk drive-in. In naming the masters and the replacement and thier immitation we gain a better insight into mindset of the personel and the story behind them.

In many ways, the book is intended to illustrate the angles of distinction in the business of Hedge fund through the lives of the masters who lived and live it. If the connecting thread between these groups of serious men and women is their ability to manage risk then thier greater ability to withstandand pressure in terms of losses and profits become the line of demarcation. For this, there is a tendency towards summarising the book as an argument that the US Hedge Fund indusry can be understood from the perspective of personalities who grail the very top of the business ladder, for it seem clearly obvious that they could not have made it for such a long time without withstanding the probate burn of other people's money nor are bereft of the ability to hold the line of profit in times of heavy trading. If the top of trading is cracked, the pinnacle will naturally force a downturn but the exit strategy of these giants will make the pinnacle not so much a 'peak as it is a plateau'.

Conclusion

Some famous Psychologist, perhaps Sigmund Freud once said that certain level of human confidence inundate pure ego. He goes on to say that for some peope this is mainly natural and when such ego is fully exercised the only way forward would be downwards. The creative force of ego was overlooked, especially ego stemming from personal homework. But this ego as a form of confidence is by its intoxicating and when we place the Psychologist argument next to frontline politicians like Julius Ceaser, such intoxication is 'absolutely'. In advanced psychology of money if not in Hedge Hunt, this is not case, this not nearly the case for we know that some situations when money is involved can agitate the high art within and then the sparks goes up.

The inexurstible hunt for funds of all kinds has be seen by many as a case of ego, especially the case of Hedge Hunters whose exuding charismatic myth. But the public can now analyse that behavior as a mere side effect of those many years of hardwork, of delicate calculations, of foresight and of ruthlessness. As such ego in business of Hege Fund is as equal to needed confidence as confidence is equal to the coronation of market information, financial research and risk management. The varying nature of Hedge funds is easily tied to these discipline. The other discipline within the industry where success is due in part to the character of the managers in the main event, in part to the training of the managers and schools of training, but at large, Hedge Fund management is all about the ability to dig deeper in course of financial event in order to understand the risks involved and how to management risk through strategic study and forecast. Safe implementation of any startegy is a very necessary tool.

commentary

From the days of Benjamin Graham 'intellingent investor' and with Dodd 'Security Analysis', the world of Value business and Hedge Fund has not been the same. Taking risk in any business which is a form security Analysis need people who are willing to toe a certain line in business. Then faith in the analysis we obtain from company's profile and faith in the conclusion we draw becomes a derivitive of one's own experience in the business. For this, we may notice a shift of function in the table of Hedge Fund managers from the role of an analyst for analysis sake to the role of managers who are not only part of the business they represent, but have the working knowledge of the companies in question and how to expedite the fund in thier charge. This simple fact was not treated in the book, as such a lot of gap exist such that a second book in intently necessary to explain the evolution of Hedge Fund market from the eyes of these lives and also in terms of value. Not only in terms of value added measures but on what these managers have done by their own experience and training. How unique training proves a unique perspective in the trade industry become self expiated by the author and the book.

The book did not highlight the impact of Banking industry in the Hedge Fund as perhaps noted by the eyes of these managers and Hunters. The book suggested an expansion of the Hedge Fund industry has taken place, but this is almost explosion of Hedge Fund managers since the days of the so-called masters. For instance we know that in the 1980's, institutional investors, mutual funds, pension funds, etc around the world have become very evident in countries GDP. Since the days of China and other emerging socialist economies like India entering the common market, there has been new faces in Funds business and newer faces as the world catches up to China. From mutual funds and Hedge Funds of many countries in the world at slightly over 700 billion in the 80's to 5 trillions in 2000's. We are nolonger dealing with an industry of very select champions rather a world of stories of successful hedgefund managers.

Katharine Burton seem to play too close to the success stories of well established Hedge Hunters but may neglected the younger upstarts who would been the connecting thread between the passing and the present; which is really the future. From the lense and lenses of these masters whose stories become human in the book, we can say that the book met its primary target only to the degree that it should be accepted as a book of stories with no psychological relevance beyond the pathos of these persona non grata in Hedge Fund. But this misgives on the great 'potentials' of the book, that as much as people are interested on the binding intellectual tie of these success stories and thier human department, they are happier, perhaps with the guiding geniuses of these people; that is the infectious psychology torching the industry, the people who make the industry and the industry torching their inner psychology. When this is truly harnessed, the broader picture emergers and only then, emulation, as a possesive pronoun in world money and Hedge Fund becomes a 'different matter'.