Efficiently Inefficient: How Smart Money Invests And Market Prices Are Determined Download Free (EPUB, PDF)
Efficiently Inefficient describes the key trading strategies used by hedge funds and demystifies the secret world of active investing. Leading financial economist Lasse Heje Pedersen combines the latest research with real-world examples and interviews with top hedge fund managers to show how certain trading strategies make money--and why they sometimes don't. Pedersen views markets as neither perfectly efficient nor completely inefficient. Rather, they are inefficient enough that money managers can be compensated for their costs through the profits of their trading strategies and efficient enough that the profits after costs do not encourage additional active investing. Understanding how to trade in this efficiently inefficient market provides a new, engaging way to learn finance. Pedersen analyzes how the market price of stocks and bonds can differ from the model price, leading to new perspectives on the relationship between trading results and finance theory. He explores several different areas in depth--fundamental tools for investment management, equity strategies, macro strategies, and arbitrage strategies--and he looks at such diverse topics as portfolio choice, risk management, equity valuation, and yield curve logic. The book's strategies are illuminated further by interviews with leading hedge fund managers: Lee Ainslie, Cliff Asness, Jim Chanos, Ken Griffin, David Harding, John Paulson, Myron Scholes, and George Soros. Efficiently Inefficient effectively demonstrates how financial markets really work.Free problem sets are available online at http://www.lhpedersen.com
Hardcover: 368 pages
Publisher: Princeton University Press (April 13, 2015)
Language: English
ISBN-10: 0691166196
ISBN-13: 978-0691166193
Product Dimensions: 9.5 x 6.4 x 1.1 inches
Shipping Weight: 1.7 pounds (View shipping rates and policies)
Average Customer Review: 4.7 out of 5 stars See all reviews (20 customer reviews)
Best Sellers Rank: #55,687 in Books (See Top 100 in Books) #41 in Books > Business & Money > Investing > Analysis & Strategy #93 in Books > Business & Money > Economics > Theory #340 in Books > Business & Money > Finance
Efficiently Inefficient breaks down the primary ways by which hedge funds (and conventional money managers) attempt to generate positive returns for their investors. It provides an overview of the hedge fund industry by going into the mechanics of the industry and then follows with detailed descriptions of the different strategies employed. Immediately after the Table of Contents, the author provides the gist of the book in three simple tables. These tables provide a very efficient overview of the main topics in each section of the book.In a nutshell the book could be outlined as:Part IThis section has five chapters which provide an overview of the theoretical aspects of investing. It covers an overview of the hedge fund industry in chapter one followed by a brief explanations of the “greek” alphabet of performance measurement in chapter two. The remaining chapters discuss issues in back-testing, perspectives on risk management followed by discussion of trading costs and leverage.Part IIPart II of the book discusses the three primary equity strategies which the author has broken down as Discretionary Equity Trading, Dedicated Short Bias and Quantitative Equity Investing. This book outlines the theoretical principles of each of these primary strategies and ends each respective chapter with an interview with a respected practitioner of the strategy. Discretionary Equity investing is what would probably be familiar to most investors. It is the Graham & Dodd realm of investing. The next chapter on Dedicated Short bias gets into the thesis, details and complications of short selling and ends with an interview with noted short seller James Chanos. The final chapter in this section gets into Quantitative Equity investing.
This text is an unusual hybrid of a description of hedge fund investment styles, investor interviews and a finance textbook. The book’s promise is to be a mix of Antti Ilmanen’s Expected Returns (an AQR colleague) and Jack Swager’s “wizard-series”. Efficiently Inefficient doesn’t fully live up to this standard but I still like it.This hybrid approach isn’t surprising given the author’s parallel and impressive career path. Pedersen is a finance professor at both NYU and Copenhagen Business School and has written several important papers earning him the title of best European economist under 40. Further he’s on the editorial board of The Journal of Finance and a research associate at NBER. For most of us this would be more than enough but this is only half the story. The author is also a principal on AQR’s asset management team and as such an important part of one of the world’s largest hedge funds. This has no doubt given him easier access to the many investors to interview in this book. At least Pedersen has turned 43 by now so even he can’t have it all…The introductory section on the nuts and bolts of hedge funds (called Active Investment in the typical modest hedge fund style) discusses topics like risk management, back testing, trading, performance measurement etc. I found the notion of several different types of liquidity premiums very interesting and now and then the author presented a nugget I hadn’t thought of but mostly this section gives the foundation for the rest of the book by describing the general character of “smart money” and the activities that hedge funds perform.
Efficiently Inefficient: How Smart Money Invests and Market Prices Are Determined Money: Saving Money: The Top 100 Best Ways To Make Money & Save Money: 2 books in 1: Making Money & Saving Money (Personal Finance, Making Money, Save Money, Wealth Building, Money) Talking Prices: Symbolic Meanings of Prices on the Market for Contemporary Art (Princeton Studies in Cultural Sociology) The Only Guide to a Winning Investment Strategy You'll Ever Need: The Way Smart Money Invests Today Coin World 2014 Guide to U.S. Coins: Prices & Value Trends (Coin World Guide to Us Coins, Prices & Value Trends) Smart Investor: Warren Buffett Way: How to know the stock market has bottomed? (Market Crash, Intelligent Investor, Stock Market, Financial Freedom, Stock Valuation, Wealth Creation Book 1) Thrift: Making Massive Money from items at Thrift Store Prices by Selling them for Huge Retail Profits (Thrifting on Scale, Dominating the Flipping Market ... Op Shopping, Scaling for Thrifting) Reinventing American Health Care: How the Affordable Care Act will Improve our Terribly Complex, Blatantly Unjust, Outrageously Expensive, Grossly Inefficient, Error Prone System Personal Finance: Budgeting and Saving Money (FREE Bonuses Included) (Finance, Personal Finance, Budget, Budgeting, Budgeting Money, Save Money, Saving Money, Money) Smart Money Smart Kids: Raising the Next Generation to Win with Money Money: Saving Money: Success: Get More Money & Success In Your Life Now!: 3 in 1 Box Set: Money Making Strategies, Saving Money Strategies & World's Best ... Tips for Personal Finance & Life Success) Lean Connections: Making Information Flow Efficiently and Effectively Experience Antique Booth Success: A Step-by-Step Guide on How to Run an Antique Booth Efficiently Project Manager Training System: 7 Skills to Efficiently Manage Projects On Time (Made for Success series) Stock Market: Beginner's Guide to Stock Trading: Everything a Beginner Should Know About the Stock Market and Stock Trading (Stock Market, Stock Trading, Stocks) A Smart Girl's Guide: Money (Revised): How to Make It, Save It, and Spend It (Smart Girl's Guides) The Theory of Interest as Determined by Impatience to Spend Income and Opportunity to Invest It Great Legal Marketing: How Smart Lawyers Think, Behave and Market to Get More Clients, Make More Money, and Still Get Home in Time for Dinner Money: How to earn money with : Earn $5000 per Week Part Time using the power of Arbitrage with Liquidation Products on (How to make money ... on , How to make money with ) Money Management Tips: Control Money Don't Let It Control You (Budgeting your money, How to save money tips, Get out of debt fast, Live cheap, Debt free, Spend less)
