From the Inside Flap
Can anyone win the investing game? Considering the small number of mutual funds that produce market-beating returns, the task may seem nearly impossible. Even so, there remains an elite group of investment professionals who manage to produce market-beating returns, year after year. What is their edge?
Their edge is defined as alpha-which represents the portion of an investment fund's return that is generated solely by the skills of the portfolio manager. Investors, traders, and speculators alike have searched for a dependable source of alpha for as long as there have been financial markets.
How much of this search is art, and how much is science? The answer to this and other questions can be found within this provocative and highly entertaining book. Some of the topics covered in Searching for Alpha include the following:
* The three reasons why the mutual fund industry will always underperform the overall stock market
* The well-known economist who, by comparing the stock market to a "beauty contest," made a fortune as a speculator
* How a highly successful football betting scheme can be utilized to profitably trade stocks
* How to profit from the idiosyncrasies of human behavior
* What the waxing-and-waning tendency of oil wells can tell us about the impact of technology on the investment management industry
* The commonalities between catching monkeys in India and avoiding taxes on investments in the United States
* The profit potential of value stocks for the next decade
Say goodbye to dry investment theory and hello to a rich and wonderful cast of characters. Who can resist the one-armed mechanic who single-handedly changed the business of U.S. oil production, or the pacifist who pioneered the explosives industry? Where else could you find the likes of Beethoven, Dom Perignon, and the mathematician who stopped Napoleon's advancing army dead in its tracks? Searching for Alpha cleverly combines these colorful figures with cutting-edge financial theories, bringing both to life in a refreshingly educational manner.
Jacket Design: Andy Liefer
From the Back Cover
"A provocative, witty, and meaningful book. Searching for Alpha iseminently readable. I highly recommend it!"-Dr. Martin Zweig,Zweig-DiMenna Associates
"Searching for Alpha is right on the mark and essential reading foranyone who wants to go beyond stock-picking and think about how toconstruct a total portfolio to fit their own risk and returnobjectives."-Bluford H. Putnam, President, CDC InvestmentManagement Corp.
"Searching for Alpha is as instructional as it is entertaining. BenWarwick's engaging examination of the modern investment process issuccinct yet thorough, and cleverly interspersed with amusingfacts, anecdotes, and historical insights . . . a charming bookwith lots of insight for both the novice and theprofessional."-Mark Kritzman, Managing Partner, Windham CapitalManagement, author, Puzzles of Finance
"Searching for Alpha is a wild and entertaining read that justhappens to be an investment book. Along the way, you'll read aboutthe Civil War, the origin of professional football, and evenwhaling-and by the time you're through, you'll know more about theinvestment game than you ever imagined."-Jeremy Pink,Editor-in-Chief, worldlyinvestor.com
"An erudite, well-written, and interesting book-with the addedadvantage of being right! The theory is state-of-the-art; thepractice is very much current. Warwick has a special talent forhistorical analogy and storytelling."-Theodore R. Aronson, Partner,Aronson & Partners