Hedge Funds and Alternative Investing Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Hedge Funds and Alternative Investing

Public Reply Prvt Reply Mark as Last Read File

Next 10PreviousNext

To: Edward A. Fitzpatrick III who started this subject	3/29/2002 1:46:48 PM
From: Edward A. Fitzpatrick III	Read Replies (1) of 4

I would like to recommend a book. " The Prudent Investor's Guide To Hedge Funds" By James P. Owen is a very good book for the laymen looking at Hedge Funds for the first time. The problem that Hedge Funds have in my mind, is that too many people use the same metrics to measure both traditional managers and alternative managers. This goes on all the time and not just among the "newbies". Many consultants and Financial advisors have no idea how to asess hedge funds. For instance, show me a large Cap growth fund with a 10 yr return of 15%, an annual standard deviation of 18% and a correlation to the S&P 500 of .95, and I will show you an inferior asset to include in an equity portfolio despite the nice return. Even if the fee is low low low, it adds no efficiency to the portfolio. Show me a hedge fund with 10 yr return of only 12% with an annual standard deviation of 8% and a correlation to the S&P 500 of .30 and I will show you an asset worth looking at. Even if the fee is twice that of the the Large Cap growth fund. In my mind the two critical elements are the Sharpe ratio and the correlation coefficient. Any thoughts?

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Next 10PreviousNext