The Prisoner’s (Hedge Fund) Dilemma

CO2

SAC Manager Arrested for Insider Trading at Hedge Fund. If you speak to most hedge fund managers, they will tell you what they create is efficient markets. The payoffs hedge fund employees are real, but the business has the feel of a game. by Gary Cohen.

Hedge 90

Art of Managing-Hedging Your Bets Might Be Harmful to Your Firm’s Health

Management Excellence

The essence of strategy is choosing what not to do, yet as Lafley, Martin and Riel describe, the notion of giving up options or closing off familiar paths is uncomfortable for us. It’s our drive to eliminate this discomfort by keeping our options open and flexible that might just be limiting our success or even setting the stage for failure.

Hedge 59

UNDERSTANDING IS A POOR SUBSTITUTE FOR CONVEXITY (ANTIFRAGILITY): A Conversation with Nassim Nicholas Taleb

First Friday Book Synopsis

Here is another in the CONVERSATIONS AT EDGE series, in this instance a conversation with Nassim Nicholas Taleb. “The point we will be making here is that logically, neither trial and error nor “chance” and serendipity can be behind the gains in technology and empirical science attributed to them. By definition chance cannot lead to [.].

Hedge 79

Self Made Nothing!

Dave Bratcher

You Can’t Get to the Top Without Assistance – One of the other problems with the ladder was being able to climb with the hedge trimmers in my hand. Have you ever been scared while climbing a ladder?

Hedge 206

An Oxymoron: $1-to-2 Billion Penalty With No Wrongdoing

Coaching Tip

Hedge-fund group SAC Capital Advisors LP and federal prosecutors have agreed in principle on a penalty exceeding $1 billion in a potential criminal settlement that would be the largest ever for an insider-trading case, according to people familiar with the matter.

Hedge 97

The Differences Between A Coach And A Mentor

Eric Jacobson

Author Kristi Hedges , in her book, The Power of Presence , provides these explanations of the roles of a coach and of a mentor and how they differ from each other: The Coach shows empathy through a mixture of tough love and strong support.

Mentor 108

Activist Hedge Funds Aren’t Good for Companies or Investors, So Why Do They Exist?

Harvard Business Review

Activist hedge funds have become capital market and financial media darlings. companies for an eight-year period (2005–2013). Total shareholder return is what the activist hedge funds claim to enhance. before paying the hedge fund 2% per year plus 20% of that 12.4%

TSR 10

Activist Hedge Funds Often See Their Gains Wiped Out by Costs

Harvard Business Review

Because of the high cost of mounting a proxy fight, the average hedge fund makes less money on its activist investments than on its nonactivist portfolio, Nickolay Gantchev of the University of North Carolina discovered in a study of 1,164 campaigns by 171 hedge funds.

Hedge 12

What You Can Learn From Black Swans, Forecasting, and Idolatry

The Idolbuster

In a similar way, I think that people in the business world should know better than to blindly follow forecasts or other business means of predicting the future, which is exactly what Professor and former hedge fund manager Nassim Nicholas Taleb argues in his book The Black Swan. Chapter 9 Paint Your Environment Part 9.

Hedge 39

Bill Ackman Is Just Doing God's Work

Harvard Business Review

Everybody has been piling on to hedge fund manager Bill Ackman lately. That''s what activist hedge fund managers like Ackman do. It also doesn''t follow from Bebchuk, Brav, and Jiang''s evidence that more hedge fund activism would necessarily be a good thing.

Hedge 18

Why You're More Deferential to Peers than the Boss (in Your Emails)

Harvard Business Review

In emails, employees tend to show much more deference — using hedges and disclaimers such as "This may be a bad idea, but." — to people at their own level than to higher-ranking employees, according to a study that included an analysis of hundreds of corporate emails.

Hedge 12

The Five Traps of High-Stakes Decision Making

Harvard Business Review

Southwest’s decision in 2007 to hedge against increases in the price of jet fuel proved remarkably prescient. At some point most executive teams will make a bet-the-company decision. Sometimes they’ll make the right one and will be handsomely rewarded.

Hedge 16

Nate Silver on Finding a Mentor, Teaching Yourself Statistics, and Not Settling in Your Career

Harvard Business Review

There are some issues where you just don’t have a good answer and you have to hedge your risks as a business and not pretend that you’re more certain than you really are. Perhaps no one has done more for the cause of data-driven decision-making in the minds of the public than Nate Silver. His book, The Signal and the Noise , explains the power of statistical modeling to improve our predictions about everything from the weather to sports to the stock market.

Hedge 17

Five Challenges China Must Meet by 2034

Harvard Business Review

In one area, however, deep uncertainties exist which must cause even the most pro-China investors to want to hedge their bets.

"Feminine" Values Can Give Tomorrow's Leaders an Edge

Harvard Business Review

Only a few days before, hedge fund billionaire Paul Tudor-Jones created a stir by remarking at a conference that women will never rival men as traders because babies are a "focus killer".

Hedge 16

Overcome the Complexity Within You

Harvard Business Review

Complexifiers like to hedge their bets and not commit to a definitive course of action, particularly since some new information might surface that will change the plan.

Hedge 16

Parting Ways with Public Trading

Harvard Business Review

It is far more likely that the hard work of restructuring will be the task of private equity firms, leveraged buyout firms or hedge funds, all of whom have a financial motivation to make whatever disengagement decisions are necessary to profit from the eventual re-sale of a healthier company.

How to Brand a "Useless" Degree

Harvard Business Review

For some, the path forward is clear: the math experts will be snapped up by hedge funds, the software engineers will have their pick of start-ups, and elite investment banks and consultancies will duke it out for the top MBAs.

Hedge 16

Who Should Actually Have Say on Pay?

Harvard Business Review

At 74% of the 1,471 companies that have voted so far in 2013, according to Equilar''s say-on-pay tracker , the "yes" percentage exceeded 90%. Only 31 companies (2%) have gotten sub-50% no-confidence votes in 2013. What''s more, the asset management industry — in particular the alternative-asset subset of hedge funds and private equity — has exported many of its pay practices into the corporate sector. It''s say-on-pay season at American corporations.

Hedge 12

What Smart Boards Do When Investors Knock

Harvard Business Review

Law firm Wachtell Lipton identified 27 activist-investor initiatives in 2000, but more than 200 in 2013. The firm also estimated that more than a hundred hedge funds have now migrated into the activist camp. Even Microsoft is soon to have a hedge-fund activist, ValueAct Capital Management’s president G. Bulls in a china shop—or catalysts for change? The divides created when activist investors muscle their way onto boards as varied as those of Hewlett-Packard, J.

Hedge 12

The Hidden Danger of Being Risk-Averse

Harvard Business Review

Incidentally, Iksil was head of the Chief Investment Office, the purpose of which is to protect the bank by hedging some of its other riskier bets. People are generally not all that happy about risk.

How Samsung's Galaxy S4 Should Have Launched

Harvard Business Review

Despite this grand vision, Samsung is hedging its bets just in case the breaking away move does not pan out by keeping its key branding elements (especially the design and naming) more or less intact. Success begets not only further success but also harder-to-meet market expectations.

Hedge 16

Let's Be Realistic About Measuring Impact

Harvard Business Review

Robin Hood, on the other hand, is a grant-making foundation created by hedge fund managers with a penchant for hard numbers. "Measure impact" has become a mantra for creating social change.

Why Social Mobility Is Crucial to America's Economy

Harvard Business Review

The grandeur of wealth — whether it's a landed estate or an exclusive hedge fund — has always been seductive. Something extraordinary happened to the American economy in the 1780s and '90s.

Hedge 16

Corporate Strategy Is a Fool's Errand

Harvard Business Review

Fund managers, equity analysts, hedge fund managers, and so on can analyze the numbers perfectly well and listen to the PowerPoint presentation of the CEO on his or her road show.

P&L 16

To Become More Adaptable, Take a Lesson from Biology

Harvard Business Review

Adaptable systems make multiple copies of everything and modify the copies to hedge against uncertainty. Remember when Apple's stock traded at $7 a share? I do, because that's when I sold my shares.

Women Need to Realize Work Isn't School

Harvard Business Review

I ( Whitney ) went from studying music to equity research to co-founding a hedge fund and couldn't be happier now writing, speaking and advising on innovation. Academic institutions are churning out ever-more female graduates.

Hedge 16

SAC and the Strange Focus on Insider Trading

Harvard Business Review

Five years after a financial crisis that, as best anybody can tell, had almost nothing to do with insider trading by hedge funds, the two biggest post-crisis criminal crackdowns on the financial sector in the U.S. insider trading by hedge funds. against SAC founder and chief Steve Cohen, but on Thursday he charged the hedge fund itself with "insider trading that was substantial, pervasive, and on a scale without known precedent on the hedge fund industry.".

Hedge 12

Case Study: The Ex-CEO Contemplates a Coup

Harvard Business Review

He makes his own decisions," I hedged. It''s after midnight, and Myra Wanandi is writing in her journal in the Jakarta home she shares with her husband: I''m tired, but I have to concentrate. My father is relying on me for one of the most important decisions of his life.

Morning Advantage: Welcome to the New Videogame Gold Rush

Harvard Business Review

Developers, no surprise, are flocking to mobile gaming as well, but as a few experts say in the piece, they may want to hedge their expectations a bit: it’s a crowded field out there, and the Big Three are still kings. This Hedge-Fund Manager’s Buys A LOT of Art (n + 1 “For the last decade, three companies (Nintendo, Sony, and Microsoft) have ruled the gaming console business with an iron fist. But that’s all about to end,” writes Andrew Groen at Wired.

Hedge 12

Four Keys to Thinking About the Future

Harvard Business Review

Also see psychologist Maria Konnikova’s 2013 Mastermind: How to Think Like Sherlock Holmes. Of course, the wisest among us will always hedge our forecasts with qualifiers such as “will likely” or “is apt to.” A publishing company has discovered that one of its well-known authors has plagiarized. The publisher has pulled the title. But does the publisher’s responsibility end there? Does one disclose the transgression to the public?

Morning Advantage: It's Not Who You Know

Harvard Business Review

Rawley explains in this Columbia Ideas at Work piece: “If you’re coming from a New York bank and starting up a new hedge fund, even if you are well connected in New York, you’re competing with people who are also well connected. There are a lot of hedge funds chasing dollars in New York, but very few in Missouri.”.

Hedge 12

Leadership Lesson from an Off-Road Champion Driver

CO2

He is a Minnesota hedge fund manager and an off-road racer who won the 2013 Dakar Challenge by posting the fastest adjusted time combined from two major desert races—the Tecate SCORE Baja 500 and the Eldorado HDRA Reno 500. by Gary Cohen.

Hedge 130

Do Commodities Speculators Make Things Cost More?

Harvard Business Review

Markets that existed mainly for the convenience of industry have become dominated by exchange-traded funds, hedge funds, and investment banks. Commodities-trading rules and customs that date back to the pre-financial era may not fit the more aggressive tactics of hedge funds and investment banks. Commodities trading, Adam Smith wrote in 1776 , was a boon to efficiency and a foe to famine.

Ain't Too Proud to Beg: Pricing Lessons from the Rolling Stones

Harvard Business Review

Earlier this month the Rolling Stones kicked off a brief 2013 tour celebrating their 50th anniversary. Guitarist Keith Richards could casually drop in an interview that this may very well likely be the band''s last tour (the "hedge" in the wording is intentional).

The Danger of Turning Cynical About Silicon Valley

Harvard Business Review

Tech-world denizen Jesper Andersen tweeted a similar sentiment: “Change ‘startup’ to ‘hedge fund,’ ‘ecstasy’ to ‘cocaine’, and ‘douche-bag’ to ‘douche bag’ and you too can see SF is just another Wall St.” Silicon Valley is losing its luster, at least among elite opinion-makers.

CRM 12

To Diversify Your Network, Follow the 2+1 Rule

Harvard Business Review

You want it to be diversified, and you want to keep adding to it, or it won’t be an adequate hedge,” she counsels. Aimee, a senior executive at a global financial services firm, had carefully cultivated her network of sponsors and supporters over 15 years, but recently, she watched helplessly as waves of market dislocation, structural reorganizations, and headcount reductions battered the industry and shredded her connections.

Hedge 12

What Markets Do and Don’t Get About Innovation

Harvard Business Review

In 2007, Clayton Christensen co-founded Rose Park Advisors, a hedge fund devoted to investing in disruptive companies. The idea was to transform his theory of disruptive innovation into an investment thesis. Disruptive innovation can take several forms, and the market understands some types better than others. But do markets really follow the logic of an academic theory?

If Crowdfunding is the New Day Trading, Look Out

Harvard Business Review

Now startups and hedge funds alike can advertise the fact that they’re raising money, and some day soon you or I might join wealthier citizens in investing in them. Paul Volcker famously said the only financial innovation to improve society in recent memory was the ATM. Not everyone agrees.

Fortune Favors the Prepared, and Hiring Managers Favor the Fortunate

Harvard Business Review

Almost as soon as Ron Johnson was fired by JC Penney, blame for the retailer’s annus horribilis shifted to board member and billionaire hedge-fund manager Bill Ackman, who had lured Johnson to Penney from Apple in 2011. Do You Feel Lucky, Punk? When they’re hiring, companies are looking to find out what candidates have really done — not what they’ve participated in or watched, but what they’ve done.

Look Who's Distracted Now

Harvard Business Review

When acclaimed hedge fund manager Paul Tudor Jones revealed his opinion that women become much less effective as stock traders or investors once they have children, he was, in a sense, suggesting that the distraction of motherhood—a distinctly feminine condition—exceeds that of other attention-siphoning activities.

Every Leader Needs a Challenger in Chief

Harvard Business Review

Stuart Roden, Co Fund Manager of Lansdowne Partners’ flagship fund, one of the world’s largest hedge funds, tells me he sees one of his primary roles as being the person who challenges his staff to consider how they could be wrong, and then assess how this might impact on their decision-making. We are drawn to those who echo what it is we already believe.

Every Leader Needs a Challenger in Chief

Harvard Business Review

Stuart Roden, Co Fund Manager of Lansdowne Partners'' flagship fund, one of the world''s largest hedge funds, tells me he sees one of his primary roles as being the person who challenges his staff to consider how they could be wrong, and then assess how this might impact on their decision-making. We are drawn to those who echo what it is we already believe. We get a dopamine rush when we are presented with confirming data similar to what we get when we eat chocolate or fall in love.