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Hedge Hunters: Hedge Fund Masters on the Rewards, the Risk, and the Reckoning, Katherine Burton

Hedge Hunters: Hedge Fund Masters on the Rewards, the Risk, and the Reckoning
by Katherine Burton,  published 2007

If you can pick anyone in this world to write the book “Hedge Hunters,” then Katherine Burton is definitely the most logical choice.  Burton, who has covered the hedge fund industry for Bloomberg since 1993, is the perfect candidate for writing this book – a compilation of 18 different profiles of over two dozen individuals who have pioneered the hedge fund industry, and many of whom are still going strong today.  Managers featured range from original pioneers such as Michael Steinhardt and Julian Robertson, famed short-seller Jim Chanos (who is most famous for exposing the fraud and for shorting Enron common stock before it collapsed), energy specialist T. Boone Pickens, and fund of funds manager Mark Yusko.

True to her journalistic style, Burton digs pretty deep in each of her profiles – weaving in childhood stories, how the managers ended up in the hedge fund business, and what gives them their “edge” in money management.  For example, the profile of T. Boone Pickens includes his background as a Phillips Petroleum geologist in the early 1950s, along with his subsequent evolution into a “corporate raider” of a series of well-known oil companies during the 1980s.  The successes – as well as the setbacks – are all discussed.  There is no stone of interest that is left unturned, such as Pickens' 90% loss in his first year (1999) of running BP Capital.

This book serves as a great introduction to the hedge fund industry as we know it today.  While seasoned investors can pick up some “tidbits” of trading or investing wisdom here and there, readers should keep in mind that the author's intent is not to write an investment or trading book.  However, for those who would like to learn more about the hedge fund industry and some of its characters, or for those who would like to start their own hedge funds or go work for one (clue: it is much more difficult today than it ever was, despite the proliferation of the hedge fund industry over the last five years), this book is a great addition to your bookshelf.

That being said, this book is still not as “complete” as I would like – given the exclusion of many of the world's biggest hedge fund operations and figures, such as the hedge fund arms of JP Morgan and Goldman Sachs Asset Management, quant pioneer Jim Simons, famed Enron trader John Arnold, or other newer managers who deal with more newer or more “exotic” asset classes, such as weather derivatives or carbon futures.  But then, how interesting would the hedge fund industry be if we could simply learn everything about it by picking up a book?


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