This book takes a different tact in providing insight into the analysis of hedge funds. The analysis of hedge funds is evolving as inflows to the funds have increased. Many published materials of late have focused on the applications of the long established Modern Portfolio Theory (MPT). MPT has been at the forefront of financial analysis primarily for traditional asset classes. But current research and findings have demonstrated that MPT and traditional analysis have large gaps and have been ineffective in the analysis of hedge funds, and new approaches using PMPT (Post-MPT), behavioral finance and other methods have proven more useful. This book incorporates quantitative and qualitative methods into its methodology. The qualitative framework examines areas typically overlooked in traditional analysis, while the quantitative measures examine methods more suited to non-normal results that are the trademark of hedge fund investing. Additionally, Stavetski goes further by presenting specific cases to demonstrate the shortcomings of MPT, the red flags raised and how PMPT and behavioral analysis may have provided early warning signs to investors. The goal is to provide readers with reliable non-traditional tools for these non-traditional assets.
Book Details:
- Author: E. J. Stavetski
- ISBN: 9780470197592
- Year Published: 2009
- Pages: 272
- BISAC: BUS036000, BUSINESS & ECONOMICS/Investments & Securities / General
About the Book and Topic:
This book takes a different tact in providing insight into the analysis of hedge funds. The analysis of hedge funds is evolving as inflows to the funds have increased. Many published materials of late have focused on the applications of the long established Modern Portfolio Theory (MPT). MPT has been at the forefront of financial analysis primarily for traditional asset classes. But current research and findings have demonstrated that MPT and traditional analysis have large gaps and have been ineffective in the analysis of hedge funds, and new approaches using PMPT (Post-MPT), behavioral finance and other methods have proven more useful. This book incorporates quantitative and qualitative methods into its methodology. The qualitative framework examines areas typically overlooked in traditional analysis, while the quantitative measures examine methods more suited to non-normal results that are the trademark of hedge fund investing. Additionally, Stavetski goes further by presenting specific cases to demonstrate the shortcomings of MPT, the red flags raised and how PMPT and behavioral analysis may have provided early warning signs to investors. The goal is to provide readers with reliable non-traditional tools for these non-traditional assets.
Hedge funds are one of the fastest growing sectors in the investment world. Approximately 6500 hedge funds hold just under $1 trillion in assets (and the mutual fund industry has just over $10 trillion under management). With assets growing at a fast clip of nearly 30% annually, more and more institutional funds and high net worth funds are finding their way to hedge funds.
HEDGE FUND ASSETS CONTINUE TO GROW AT A STRONG RATE. With just under $1 trillion in assets and growing at a rate of 30% annually, hedge funds are taking an increasingly bigger portion of investment dollars (there are just over $10 trillion invested in mutual funds). Institutional and high net worth dollars are typically spread among more than one hedge fund so that managing all the managers, including analyzing performance and identifying potential problems, is paramount to avoid disasters such as seen with cases like Amaranth (which lost $6 billion in one week). COVERS A WIDE RANGE OF TOPICS FOR THE INVESTOR AND INVESTMENT MANAGER. Presents the quantitative and qualitative measures that professionals need to monitor and analyze their hedge fund performance. Discusses topics such as Modern Portfolio Theory (MPT) and Post Modern Portfolio Theory (PMPT), choosing managers, watching performance, researching alternate asset classes, and other important investor issues. The author also includes an appendix showing detailed case studies of hedge funds, and gives readers a roadmap to monitor their investments. KNOWLEDGEABLE AUTHOR WITH SOLID PLATFORM. Stavetski is a board member of the CFA Institute and a frequent speaker at industry conferences and affiliate seminars, with at least one speaking engagement a month. The book will be promoted through Stavetskis columns on TheStreet.com (with a link to Amazon.com for purchasing here) and Real Money, and publications like FAJ and CFA should review the book. Also, CMG Investment Advisors, where Stavetski is Chief Investment Advisor, will promote the book to their 3,000+ clients via email blast and on their website homepage. In addition, the book will be promoted via email blast to John Mauldins list.
About the Author
Edward J. Stavetski (Wayne, PA) is Chief Investment Strategist and Compliance Officer of CMG Investment Advisors, LLC, and investment advisory firm serving institutional and high net worth clients in the alternative investment space. Mr. Stavetski founded Pembroke Capital Management, where he was the Chairman of the Investment Policy Committee and Chief Investment Officer. Prior to his position with Pembroke, he was the Director of Equity Research and a Portfolio Manager for small cap value mutual funds at Pitcairn Trust Company and Chief Investment Officer at PNC Advisors. Mr. Stavetski is an active member of the CFA Institute and serves as a board member and past President of the local chapter of The Financial Analysts of Philadelphia, Inc. He serves as Chairman of the Professional Development Committee for the CFA Institute. He also helps develop educational content for the program. Mr. Stavetski is a regular contributor to TheStreet.com, Investopedia, and Real Money. He received his Bachelor of Arts in Chemistry and Engineering from West Virginia University, and holds NASD Series 7; 63; 3; and 65 licenses.