Inside the House of Money: Top Hedge Fund Traders on Profiting in the Global Markets (Hardcover)

~ (Author) "The global macro approach to investing attempts to generate outsized positive returns by making leveraged bets on price movements in equity, currency, interest rate, and..." (more)
Key Phrases: global macro managers, macro traders, global macro hedge funds, United States, Goldman Sachs, United Kingdom (more...)

Editorial Reviews

Review

"The managers featured in Drobny's book use various strategies, as evidenced by the panoply of securities mentioned, from African stocks to Icelandic housing bonds. Drobny stresses the importance of diversification in picking global-macro managers, adding, "You can't rely on one man."….Other managers featured in Drobny's book include Peter Thiel, who runs Clarium Capital Management….Christian Siva-Jothy, former head of proprietary trading at Goldman Sachs, and Jim Leitner of Falcon Management. In the book, Leitner offers this advice to managers: "If you read about an oil discovery, start thinking about how to develop it into a trade. The idea is to do as much research as you can just reading and thinking about anything in the world before reaching out to your network."….The key to thriving in global macro? Plenty of smarts for starters. And "humility and flexibility," Drobny says. "You have to be flexible enough to cut your positions when what you firmly believe in is not working for you." This year, global macro managers did great in the January-April period, and didn't do great in May and June, when equities and emerging markets took a big hit…..even for sophisticated players in the global-macro game, it sometimes pays to just sit on the sidelines." (Barron's)

"It's a fantastic book, both in content and execution." (Bloomberg News)

"Steven Drobny has been able to do something that few others have, especially in the media: He got hedge fund managers to share their trade secrets." (InstitutionalInvestor.com)

"...useful for anyone who has entrusted their money to funds operating in the sector...an insight into the way in which some of the best performing global macro managers think about the world they invest in and how they have amassed their fortunes." —Financial Times, (Los Angeles Times, June 4, 2006)

"[Steven Drobny] uses this access to present a series of fascinating interviews with more than a dozen managers representing a broad spectrum of investment thinking." (Financial Times)

"a good start in understanding what the new global micro manager is all about." (Lipper HedgeWorld)

"Couldn't come at a more appropriate time…sheds more light than ever on the minds behind the largest global macro funds…reveals the intricacies of thinking like a hedge fund manager." (Forbes)

"Drobny has a Rolodex that's the Wall Street equivalent of Wilt Chamberlain's little black book…he has used its power to help craft the absorbing Inside the House of Money. Think Market Wizards – only full of guys who aren't either dead or irrelevant." (Trader Monthly)

"For the investor, the trading strategies described in the interviews are chock-a-block with detail, and can serve as a starting point toward navigating hedge funds… more interesting are the stories of how these traders got where they are today… goes a long way toward enlightening those who aspire to enter." (Financial World Magazine)

"...eye opener..." (NYSSA)

"...must read..." (Futures Magazine)

"...engaging..." (Active Trader)

"written an intelligent analysis of the current hedge fund climate" (Pensions World, September 2006)

"Corporate finance managers are taking the message of the book on board." (CFO Europe, September 2006)

Product Description

Inside the House of Money lifts the veil on the typically opaque world of hedge funds, offering a rare glimpse at how today's highest paid money managers approach their craft. Author Steven Drobny demystifies how these star traders make billions for well-heeled investors, revealing their theories, strategies and approaches to markets. Drobny, cofounder of Drobny Global Advisors, an international macroeconomic research and advisory firm, has tapped into his network and beyond in order assemble this collection of thirteen interviews with the industry's best minds. Along the way, you'll get an inside look at firsthand trading experiences through some of the major world financial crises of the last few decades. Whether Russian bonds, Pakistani stocks, Southeast Asian currencies or stakes in African brewing companies, no market or instrument is out of bounds for these elite global macro hedge fund managers. Highly accessible and filled with in-depth expert opinion, Inside the House of Money is a must-read for financial professionals and anyone else interested in understanding the complexities at stake in world financial markets.

"The ruminations of supposedly hush-hush hedge fund operators are richly illuminating." --New York Times

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Product Details

• Hardcover: 384 pages
• Publisher: Wiley; 1 edition (April 21, 2006)
• Language: English
• ISBN-10: 0471794473
• ISBN-13: 978-0471794479
• Product Dimensions: 9.1 x 6.4 x 1.3 inches
• Shipping Weight: 1.3 pounds (View shipping rates and policies)
• Average Customer Review: 4.4 out of 5 stars  See all reviews (58 customer reviews)
• Amazon.com Sales Rank: #154,906 in Books (See Bestsellers in Books)

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Customer Reviews

Most Helpful Customer Reviews

32 of 37 people found the following review helpful:

5.0 out of 5 stars A Global Macro Version of The Market Wizards, July 24, 2006

By	Kevin Kingston (ny) - See all my reviews (REAL NAME)

While working on the book Steven, the author, learned and shares with the reader through a series of interviews, "how the best minds in the business think about risk, portfolio construction, history, politics, central bankers, globalization, trading, competition, investors, hiring, the evolution of the hedge fund business and a variety of other details."

The book provides an inside look at the thoughts and actions of many great financial minds. For example did you know that Maynard Keynes (the father of modern macroeconomic theory) was completely wiped out by a margin call during the commodity slump of 1929 or that George Soros's Quantum Fund averaged over 30% for it's 31 ½ years existence and that $100,000 invested in the fund at inception was worth $420 million 31 ½ years later.

Jim Leitner of Falcon Management who claims to have taken $2 billion out of the market so far in his career says he "reads a tremendous amount of books and papers" and feels, "developing a network by going out and meeting groups of intelligent people is very important". He also recommends reading the Economist. Jim says, "The Economist had something on Nigeria, stating the average beer consumption had dropped from 34 liters to 3 and then rebounded to 4. That signaled to me that there must be a trade there. There is something going on when beer consumption drops 90% in a hot country and then starts to rebound. We started buying Guinness of Nigeria and its gone straight up over the last 3 years".

Peter Thiel, the former CEO and co-founder of PayPal who runs Clarium Capital Management was given this advice from a major venture capital partner when asking about the industry, "The best way to get into venture capital is to make at least $20 million by starting a company and selling it. Take that money and invest in other companies as a VC." He would give the same advice today.

Then there is Jim Rogers, the co-founder of the Quantum fund in 1969, and author of, Investment Biker, Adventures in Capitalism and Hot Commodities, who lives in a Victorian mansion overlooking the Hudson River on the Upper West Side of NY that he bought for $105,000 and is worth $15 million today. He's so hot on commodities he says, "one day lumberjacks and farmers may be on the cover of Fortune magazine" and thinks in the next decade, "oil will be at $150 a barrel and they will be drilling for it on the white house lawn and cotton will be $4 and they will be planting it in central park".

He is so bearish on the dollar he believes it can fall to half the value of the Euro. He says, "the pound sterling was once the worlds reserve currency and it went down 80% from top to bottom. The dollar went up 400% against it."

For market enthusiasts this book is tons of fun and you sure as hell pick up real insight as to the thoughts of some brilliant traders. I may pull more of my favorite parts that I'd like to remember and post them on my blog.

By Kevin Kingston, author of: A 20,000% Gain in Real Estate: A True Story About the Ups and Downs From Wall Street to Real Estate Leading to Phenomenal Returns

My Blog: The Real Estate Investors Blog

13 of 14 people found the following review helpful:

5.0 out of 5 stars Bulldozers vs Tricycles, May 1, 2006

By	Anonymous (Greenwich, CT United States) - See all my reviews

Finally a book worthy of replacing my tattered, well worn copies of Market Wizards. As a hedge fund manager and avid reader of trading books I am pleased to say that Steve Drobny's "Inside the House of Money" is now required reading alongside the legendary "Reminiscences of a Stock Operator". I suspect many aspiring traders will read the interviews over and over discovering additional glimpses of wisdom with each passing read. While many of the managers stand diametrically opposed in terms of trading methodologies and markets, it is evident that they share a great commonality in the their ability to generate innovative ideas and weigh scenarios which often go unnoticed. Rather than picking up nickels in front of bulldozers these traders are scooping up 100 dollar bills in front of slow moving tricycles. Brilliant.

10 of 11 people found the following review helpful:

5.0 out of 5 stars Meet the Greatest Minds from the Hedge Fund World ..., April 6, 2007

By	Sachin Gaikwad "{ www.SachinOnline.com }" (Silicon Valley, USA) - See all my reviews (REAL NAME)

One of the things money can't always buy is access to the great minds. Lets say you want have an 1 on 1 with Jim Rogers(the co-pioneer of the Hedge Funds concept). Will you be able to do it? Maybe ... maybe not. And if we expand the problem to 10+ top Hedge Fund minds ... the problem becomes even more challenging. However, instead if we find someone who has access to all these folks and can proxy for you? Won't that be neat? That is exactly what Steven Drobny has done in this book. He has been able to rein in some of the greatest & successful minds in the Hedge Funds arena and ask them interesting & revealing questions relating to their trading strategy, best trades, worst trades and the other lessons they learnt from their failures/successes.

As expected, this book is written in Q&A format. The author has done an excellent job of organizing and laying out the book which moves in gradual progression. The responses from the folks are equally simple and straight forward without the use of complicated financial language(except the overuse of long/short gamma/alpha) or financial models. In my opinion, the most interesting and revealing question/responses were the one relating to the biggest mistakes and the lessons learned from them. I would highly recommend reading the responses from the various folks on this particular question. It will be worth a lot.

Some of the key insights/views I found interesting ...

* Just being right does not matter. Being right at the right time does.
* Be fluid in your decisions. As fact changes, change your views too.
* If you make agressive bets, then make sure that you defend your investment with good hedging strategy.
* Cut your losses. Ride your winners.

It definitely is a must read ...

-Sachin