Download here ([PDF]) The Little Book of Hedge Funds EPUB by Anthony Scaramucci Read online: Language: English. In the Little Book Big Profits series, the brightest icons in the financial world write on topics that range from tried-and-true investment strate- gies to tomorrow's. Editorial Reviews. Review. Most of the books I've read on investing are about as appealing as chewing on a cinder block. Fortunately, Anthony Scaramucci has.

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The Little Book of Hedge Funds thats big on explanationseven the casual investor can use An accessible overview of hedge funds, from their historicalorigin. The Little Book of Hedge Funds that's big on explanations even the casual An accessible overview of hedge funds, from their historical origin. Get Free Read & Download Files The Little Book Of Hedge Funds PDF. THE LITTLE BOOK OF HEDGE FUNDS. Download: The Little Book Of Hedge Funds.

The Little Book of Hedge Funds

Hedge funds, which are investment pools open to high-asset individuals and institutions, have been exempt from many of the reporting and regulatory requirements that govern investment pools open to other investors. Hedge fund firms have been free to pursue any investment strategy they choose, including investing in complex financial instruments, such as derivatives and mortgage-backed securities.

They have also faced few restrictions on short selling, leverage, or concentrated positions. As a result, they are able to move nimbly to take advantage of profit-making opportunities as these arise.

However, without more information on their operations, it is difficult for policymakers and regulators to assess the potential risk hedge funds pose to the stability of the U. Despite the difficulty, RAND researchers have tackled this issue: They examined whether hedge funds contributed to the global financial crisis and whether their operations could destabilize the U. To help overcome the scarcity of data, the researchers conducted interviews with 45 hedge fund managers and lawyers, investors, regulators, staff of industry associations, congressional staff, researchers, and policy analysts.

They also synthesized the research on this issue and consulted available data, provided largely by a leading firm that compiles self-reported statistics on hedge fund operations and performance. They found that hedge funds did not play a pivotal role in the financial crisis but have the potential to contribute to systemic risk in several ways. Recent regulations effectively address some, but not all, of these risks.

The researchers found that, although hedge funds worsened the financial crisis in certain ways, they did not play a pivotal role compared with other agents, such as credit-rating agencies, mortgage lenders, and issuers of credit default swaps: There is little evidence that they contributed to the mortgage bubble.

In contrast to banks, which invested heavily in subprime mortgages, hedge funds invested on both sides of the market. By short selling subprime mortgages and banks that were heavily exposed to subprime debt, hedge funds called attention to the growing bubble. Although it appears that hedge funds contributed to downward price pressure and withdrew liquidity in some markets, it is hard to assess whether the effects were substantial.

What is more, investor inflows into hedge funds that invest primarily in mortgage-related securities suggest that hedge funds also injected liquidity into some markets. There is little evidence that short selling, or shorting, of financial stocks basically, betting that the price will go down played a major role in the crisis.

The banks' financial problems were much more directly related to their exposure to toxic mortgage assets and the market's response to that vulnerability. Assets Managed by Hedge Funds Are a Fraction of Those Managed by Mutual Funds or Banks However, the behavior of hedge funds destabilized financial markets in one important way: They withdrew tens of billions of dollars from prime brokers — divisions of banks that provide services and extend credit to hedge funds — and their parent investment banks out of fear that their assets could be frozen if the banks declared bankruptcy an event that occurred in September with Lehman Brothers Holdings.

Even though there were valid reasons for these withdrawals, they were essentially a run on the bank, like the actions of individual depositors during the Great Depression. Although hedge funds did not play a major role in the financial crisis, the researchers concluded that they can pose systemic risk to the financial system — that is, they can cause the initial failure of one or more financial firms or a segment of the financial system, disrupting a core function of the financial system — for several reasons: Lack of information.

Because regulators have only fragmentary data on hedge fund positions, leverage, and asset values, they may not be able to determine whether systemic risk is accumulating. Even the prime brokers with which hedge funds do business are not able to see a hedge fund's entire book.

The speed at which hedge fund portfolios change adds to the difficulty of assessing their risk. Lack of appropriate margin in derivatives trading. Increased lending discipline by banks following the LTCM debacle appears to have led to more-sensible margin requirements, but, absent regulation, the possibility remains that counterparties would once again relax these requirements.

Runs on prime brokers. Prime brokers are vulnerable to massive withdrawals by their hedge fund customers in some circumstances — and this is true even if banks have strong balance sheets. It is in the public interest to reduce incentives for hedge funds to withdraw their assets at the first hint of trouble. Short selling.

Some academic researchers and industry participants remain concerned about opportunistic short selling, which can result in an unjustified fall in stock prices or a decline in the real value of a firm — a decline that could be so rapid that the firm has little opportunity to dispel rumors about its financial health or for investors to provide additional capital before the firm collapses. Poor incentives for managing risk.

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Researchers point to the failure of Bear Stearns as a lesson in the dangers of embedding hedge funds within larger financial institutions that are directly or indirectly subsidized by tax-payers. Such relationships can lead to the establishment of funds with risk-management strategies that would not survive absent the subsidy.

High leverage and poor liquidity. Although high leverage is not currently a problem in the hedge fund industry, it could become a threat in the future.

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Book details Author: Anthony Scaramucci Pages: Anglais ISBN Description this book "The Little Book of Hedge Funds" that s big on explanations even the casual investor can use.

An accessible overview of hedge funds, from their historical origin, to their perceived effect on the global economy, to why individual investors should understand how they work, "The Little Book of Hedge Funds" is essential reading for anyone seeking the tools and information needed to invest in this lucrative yet mysterious world.

Authored by wealth management expert Anthony Scaramucci, and providing a comprehensive overview of this shadowy corner of high finance, the book is written in a straightforward and entertaining style. Packed with introspective commentary, highly applicable advice, and engaging anecdotes, this little book: Written to provide novice investors, experienced financiers, and financial institutions with the tools and information needed to invest in hedge funds, this book is a must read for anyone with outstanding questions about this key part of the twenty-first century economy.

If you want to download this book, click link in the last page 6. You just clipped your first slide! Clipping is a handy way to collect important slides you want to go back to later.

Now customize the name of a clipboard to store your clips. Visibility Others can see my Clipboard.Researchers point to the failure of Bear Stearns as a lesson in the dangers of embedding hedge funds within larger financial institutions that are directly or indirectly subsidized by tax-payers. The smaller investor cannot play this game successfully. Due Diligence Questionnaire Notes Acknowledgments A "hard" hurdle is calculated only on returns above the hurdle rate.

The price discrepancy can occur due to mispricing of securities compared to related securities, the underlying security or the market overall. WordPress Shortcode. Sometimes hedge fund strategies are described as " absolute return " and are classified as either " market neutral " or "directional". There are numerous comedy analogies throughout the book, and Ifound this one particularly amusing: "Mutual funds are RodneyDangerfield, while hedge funds are Jon Stewart. As a result, they are able to move nimbly to take advantage of profit-making opportunities as these arise.

The SEC seems concerned about conflicts of interest such as mutual funds owning hedge funds and possible fraud and the increasing availability of hedge funds to retail investors.