Customer Reviews

Hedge Funds: Courtesans of Capitalism

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Of course, there are many books on hedge funds (HF), though nobody challenged irresponsible behavior of governing authorities and HF managers better than the author of this well researched content. 2008-09 Wall Street turmoil almost brought U.S. financial system down. It happened 10 years after this book was published... The main point Peter Temple was making in the book - too often governing authorities "turn a blind eye to their activities" and this enables hedge funds to brake currencies, bankrupt economies and destabilize the financial system. LTCM case showed how well connected HF managers are as was historically the case with the professionals in comparison.

I like that author introduce the Sharpe ratio with concrete numbers, not abstract formula:
"Let's say for the sake of argument that we have two funds: one with an annual return of 24% and a volatility of 20%, and one with a return of 16% and a volatility of 10%. The rate of return on three-month Treasury bills is 4%.
The Sharpe ratio for the first fund is (24 - 4) / 20 = 20 / 20 = 1.0.
The Sharpe ratio for the second fund is (16 - 4) / 10 = 12 / 10 = 1.2"
Based on these Sharpe ratio calculations which fund is more promising for investor? Find the answer on pp. 16-17 and enjoy the wonderful reading.

Very well written are all personal accounts of hedge funds managers and investors. My favorite is Alfred Winslow Jones' journey in creating his own successful fund and at the same time developing the sound principles of "hedge" against a drop in the market.

After 2008-09 financial crisis the book content has even larger meaning and lessons to investors. It just proves the correct analysis of Peter Temple. Author deserves our gratitude and accolades. Thank you.

There are much better books that providing an introduction to Hedge Funds. I would suggest either "The Prudent Investor's Guide to Hedge Funds: Profiting from Uncertainty and Volatility" by James P. Owen or "Investing in Hedge Funds" by Joseph Nicholas. If you are interested in learning more about the leading hedge fund personalities and organizations I would suggest the book "The New Investment Superstars: 13 Great Investors and Their Strategies for Superior Returns" by Lois Peltz.