The Prudent Investor's Guide to Hedge Funds : Profiting from Uncertainty and Volatility [Hardcover]

James P. Owen (Author)

Book Description

Series: Wiley Investment | Publication Date: December 4, 2000

Hedge funds are typically thought of as highly risky investments. Not so. In fact, some hedge funds are among the most conservative investments you can make. While speculative, high-flying hedge funds make the headlines, others quietly go about the work of crafting unique investment strategies and hedging portfolios against market risk. This much-needed book shows why affluent investors who want to be financially secure through retirement should know about hedge funds. Its blend of facts, practical tips, and personal insights takes the mystery out of this often misunderstood investment vehicle and reveals the critical questions to ask before you invest. James P. Owen (Santa Barbara, CA) has more than 30 years of experience in the investment management industry and is Senior Vice President of Broadmark Asset Management. Previously he was President of JPO Inc. and a partner with NWQ Investment Management Company. He is co-founder of the Investment Management Consultant s Association (IMCA); author of the financial bestseller, The Prudent Investor: The Definitive Guide to Professional Investment Management; and was associate producer of the PBS television series,Beyond Wall Street: The Art of Investing

Editorial Reviews

Review

"Alfred would have loved this book!"— -- Robert L. Burch, III Son-in-law of A.W. Jones, creator of the first hedge fund in 1949

"An excellent primer on hedge fund investing."— -- Robert I. Schulman, President and Chief Operating Officer, Tremont Advisers, Inc.

"As a professional hedge fund investor, I find this book truly insightful. I highly recommend it." — -- Shakil Riaz, Managing Director and CIO Capital Markets Investment Program, Chase Manhattan Bank

"Two thumbs up! If you're thinking about putting money into a hedge fund, this is a must-read book."— -- E. Lee Hennessee, Chairman and Founder, Hennessee Group LLC

From the Inside Flap

The Prudent Investor’s Guide to Hedge Funds

Hedge funds are typically thought of as highly risky investments. Not so. In fact, some hedge funds are among the most conservative investments you can make. While speculative, high-flying hedge funds make the headlines, others quietly go about the work of crafting unique investment strategies and hedging portfolios against market risk.

Investors are often surprised to learn that the very first hedge fund was created more than 50 years ago as a conservative investment approach designed expressly to protect capital from market downturns. From this pioneering concept has grown a $400 billion-plus industry–a relatively little-known corner of the investment world but one that attracts the best and brightest investment talent of our time. Drawn by the chance to invest with top money managers who find opportunity outside the market mainstream, individual and institutional investors alike are increasingly using hedge funds to boost portfolio returns while managing risk.

The Prudent Investor’s Guide to Hedge Funds shows why affluent investors who want to be financially secure through retirement should know about this frequently misunderstood investment vehicle. Written by an industry insider and bestselling financial author, this much-needed book takes the mystery out of hedge funds, answering key questions and delving into the minds of hedge fund managers and investors. Its blend of facts, practical tips, and sometimes startling insights will help you to not only understand the hedge fund phenomenon but also know which critical questions to ask before you invest.

See all Editorial Reviews

Product Details

• Hardcover: 240 pages
• Publisher: Wiley; 1 edition (December 4, 2000)
• Language: English
• ISBN-10: 0471323365
• ISBN-13: 978-0471323365
• Product Dimensions: 9.4 x 6.1 x 0.9 inches
• Shipping Weight: 1.1 pounds (View shipping rates and policies)
• Average Customer Review: 4.1 out of 5 stars  See all reviews (10 customer reviews)
• Amazon Best Sellers Rank: #1,480,669 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

46 of 48 people found the following review helpful:

5.0 out of 5 stars Missing Link Found--Hedge Fund Book Revelationx, November 29, 2000

By 

Kristin M. Fox, Director of Content, HedgeWor... (Chicago, IL United States) - See all my reviews

This review is from: The Prudent Investor's Guide to Hedge Funds : Profiting from Uncertainty and Volatility (Hardcover)

I tend to rate financial books by how many gallons of espresso I need to stay alert enough to finish reading them. However, I read all 288 pages of "The Prudent Investor's Guide to Hedge Funds: Profiting From Uncertainty and Volatility" sans caffeine and in one sitting. My local Starbucks' cash receipts suffered appreciably the day I read this book, and very nearly closed when I read it a second time.

Author James P. Owen proves he knows the difference between a hedge fund and a hedgehog right from the start as he neatly slices through the popular myth of the "loosely regulated high-flying hedge fund." He writes in the preface:

"Hedge funds are not a kind of investment, but rather a mechanism for making investments in the same sense that mutual funds are a mechanism. As in the case of mutual funds, the vehicle called a hedge fund is not inherently speculative or conservative, large or small, aggressive or passive. It is simply a framework, a legal structure, through which a pool of money can be marshaled and then invested in an almost endless assortment of ways."

Following this simple and sensible explanation of hedge funds, Mr. Owen, a 30-year veteran of the traditional investment world and a hedge fund investor, takes the reader on an alternative investment adventure. Written primarily for high-net-worth investors who are entering the hedge fund arena for the first time, the book deftly moves through an explanation of traditional investment methods, their advantages and shortcomings and then delves into how hedge funds can enhance a portfolio, whether you're looking for wealth appreciation or preservation.

Divided sensibly into three sections, Mr. Owen takes the reader on a guided tour of hedge fund investing. He begins with an explanation of the traditional world of investing and then compares and contrasts it with the world of hedge funds. He also takes the time to discuss the difference between institutional and individual investing and what each can expect from its respective portfolio, as well as the possibilities for capital appreciation and preservation.

The second and third segments of the book are devoted entirely to hedge fund strategies and a thorough discussion of hedge fund performance and investing. There is no mystery in hedge funds for Mr. Owen. He writes: "...in my judgment hedge funds do not constitute an asset class. They are nontraditional investment strategies with risk/return profiles ranging from church-mouse conservative to junkyard-dog aggressive."

A little further on, he writes: "Hedge funds can be a sound addition to a portfolio because they contribute a distinct set of characteristics-a different rhythm-to the asset mix. With their focus on absolute returns and unique, proprietary strategies, hedge funds provide something that is not offered by traditional stocks and bonds, by investments in real estate, or by holdings in a family business."

Although written primarily for conservative, high-net-worth investors interested in preserving capital, "The Prudent Investor's Guide to Hedge Funds" is a must-read for anyone involved in the industry. In plainspoken terms, Mr. Owen strips away the fear and loathing many investors have about hedge funds and offers managers and service providers with a better understanding of what investors want.

Ultimately, what may make this the best book ever written about hedge funds is Mr. Owen's easy-to-read style and when he uses a term, he clearly and immediately defines it. There is no "speaking in tongues" in "The Prudent Investor's Guide to Hedge Funds," nor is there a preachy tone. It's quite simply a very good book that finally provides a clear explanation of the hedge fund phylum.

Mr. Owen is senior vice president of Broadmark Asset Management. Previously he was president of JPO Inc. and a partner with NWQ Investment Management Company. He is co-founder of the Investment Management Consultants Association; author of the financial bestseller, The Prudent Investor: The Definitive Guide to Professional Investment Management; and was associate producer of the PBS television series, Beyond Wall Street: The Art of Investing.

10 of 11 people found the following review helpful:

2.0 out of 5 stars superficial......., April 4, 2003

By A Customer

This review is from: The Prudent Investor's Guide to Hedge Funds : Profiting from Uncertainty and Volatility (Hardcover)

Way too superficial for the institutional investors... Although probably a nice start for privates it does not provide any indepth insight into the strategies employed by hedge fund managers or the risks involved.... For the professional investor I would recommend "Absolute Returns" from Ineichen, which covers the entire spectrum, from indepth analysis of the strategies employed to an extensive overview of market risk factors....

8 of 9 people found the following review helpful:

5.0 out of 5 stars Bridge the Gap Between Traditional Investing and Hedge Funds, December 25, 2000

By 

Robert Levitt, CFP, CFA Levitt Capital Mana... (Boca Raton, FL USA) - See all my reviews

This review is from: The Prudent Investor's Guide to Hedge Funds : Profiting from Uncertainty and Volatility (Hardcover)

This outstanding book is perfect for bringing the comfort level of investors up in the seemingly arcane world of hedge funds. We recommend hedge funds to most of our high net worth clients and often we send a copy of this book to help them understand that "hedge funds" doesn't necessarily mean high risk. As we use them,they actually lower the risk of traditional investing. For those accumulating capital, traditional investing works well. But for those who want to preserve and live off it, the traditional markets can often be a very scary place.

Highly recommended.