Finding Alpha

Praise for Finding Alpha "Eric Falkenstein is more than one of the smartest and funniest people in finance. He's been a banker, a key model builder at a major rating agency, and a hedge fund trader. In this tour de force, he outlines the successes and failures of financial theory applications in the real world from the perspective of an aggressive early adopter of the best ideas in finance. To this day, I think Eric's private firm default model is one of the best papers ever published in applied finance, and this wonderful book falls into the same category." —Donald R. van Deventer, PhD, founder and Chief Executive Officer, Kamakura Corporation "People dismissed Columbus when he said the world was round. Thank goodness he persisted. Like Columbus, Falkenstein challenges standard thinking, only this time about risk and reward. As the meltdown of the capital markets has shown, the financial industry clearly missed something with regard to risk management. As an industry, we need to consider alternative theories on risk, and clearly Falkenstein is on to something here. Agree with him or not, Finding Alpha is worth a read." —Kevin M. Blakely, President and CEO,The Risk Management Association "Writing through the lens of an experienced practitioner, Falkenstein digests decades of research in capital markets, financial economics, and investment psychology that have shaped modern investment theory. This text is an excellent companion for portfolio managers, investment students, or anyone seeking to better understand the relationship between risk, returns, and financial reward." —Todd Houge, PhD, CFA, The University of Iowa How do we find alpha whenrisk does not correlate with return? Finding Alpha is a practical guide to achieving alpha when conventional measures of risk rarely correlate with higher returns. Author Eric Falkenstein-a PhD who has also been a risk manager and portfolio manager—tells the story of alpha from its beginnings to its current reversal, where risk is now evidenced by return as opposed to vice versa. Falkenstein begins by walking readers through the Capital Asset Pricing Model (CAPM), as well as other well-documented theories about risk and return, and explores how these theories measure up to current empirical evidence being documented by researchers and academics. He also outlines a novel approach to the issues of how benchmark risk and investor overconfidence affects expected asset returns, how to understand the nature of alpha and risk, and how to use practical applications of alpha-seeking strategies that he developed as a successful hedge fund manager. Finding Alpha concludes by outlining some real-life applications of alpha in finance and explains how the search for alpha affects the day-to-day life of all financial professionals.

An all-inclusive guide to trend following As more and more savvy investors move into the space, trend following has become one of the most popular investment strategies. Written for investors and investment managers, Trend Following with Managed Futures offers an insightful overview of both the basics and theoretical foundations for trend following. The book also includes in-depth coverage of more advanced technical aspects of systematic trend following. The book examines relevant topics such as: Trend following as an alternative asset class Benchmarking and factor decomposition Applications for trend following in an investment portfolio And many more By focusing on the investor perspective, Trend Following with Managed Futures is a groundbreaking and invaluable resource for anyone interested in modern systematic trend following.

Praise for Finding Alpha "Eric Falkenstein is more than one of the smartest and funniest people in finance. He's been a banker, a key model builder at a major rating agency, and a hedge fund trader. In this tour de force, he outlines the successes and failures of financial theory applications in the real world from the perspective of an aggressive early adopter of the best ideas in finance. To this day, I think Eric's private firm default model is one of the best papers ever published in applied finance, and this wonderful book falls into the same category." —Donald R. van Deventer, PhD, founder and Chief Executive Officer, Kamakura Corporation "People dismissed Columbus when he said the world was round. Thank goodness he persisted. Like Columbus, Falkenstein challenges standard thinking, only this time about risk and reward. As the meltdown of the capital markets has shown, the financial industry clearly missed something with regard to risk management. As an industry, we need to consider alternative theories on risk, and clearly Falkenstein is on to something here. Agree with him or not, Finding Alpha is worth a read." —Kevin M. Blakely, President and CEO,The Risk Management Association "Writing through the lens of an experienced practitioner, Falkenstein digests decades of research in capital markets, financial economics, and investment psychology that have shaped modern investment theory. This text is an excellent companion for portfolio managers, investment students, or anyone seeking to better understand the relationship between risk, returns, and financial reward." —Todd Houge, PhD, CFA, The University of Iowa How do we find alpha whenrisk does not correlate with return? Finding Alpha is a practical guide to achieving alpha when conventional measures of risk rarely correlate with higher returns. Author Eric Falkenstein-a PhD who has also been a risk manager and portfolio manager—tells the story of alpha from its beginnings to its current reversal, where risk is now evidenced by return as opposed to vice versa. Falkenstein begins by walking readers through the Capital Asset Pricing Model (CAPM), as well as other well-documented theories about risk and return, and explores how these theories measure up to current empirical evidence being documented by researchers and academics. He also outlines a novel approach to the issues of how benchmark risk and investor overconfidence affects expected asset returns, how to understand the nature of alpha and risk, and how to use practical applications of alpha-seeking strategies that he developed as a successful hedge fund manager. Finding Alpha concludes by outlining some real-life applications of alpha in finance and explains how the search for alpha affects the day-to-day life of all financial professionals.

Hedge Funds: Structure, Strategies, and Performance spans the gamut from theoretical to practical coverage of an intriguing but often complex subject and provides insights into the field from leading experts around the world.

From the Financial Times's global finance correspondent, the incredible true story of the iconoclastic geeks who defied conventional wisdom and endured Wall Street's scorn to launch the index fund revolution, democratizing investing and saving hundreds of billions of dollars in fees that would have otherwise lined fat cats' pockets. Fifty years ago, the Manhattan Project of money management was quietly assembled in the financial industry's backwaters, unified by the heretical idea that even many of the world's finest investors couldn't beat the market in the long run. The motley crew of nerds—including economist wunderkind Gene Fama, humiliated industry executive Jack Bogle, bull-headed and computer-obsessive John McQuown, and avuncular former WWII submariner Nate Most—succeeded beyond their wildest dreams. Passive investing now accounts for more than $20 trillion, equal to the entire gross domestic product of the US, and is today a force reshaping markets, finance and even capitalism itself in myriad subtle but pivotal ways. Yet even some fans of index funds and ETFs are growing perturbed that their swelling heft is destabilizing markets, wrecking the investment industry and leading to an unwelcome concentration of power in fewer and fewer hands. In Trillions, Financial Times journalist Robin Wigglesworth unveils the vivid secret history of an invention Wall Street wishes was never created, bringing to life the characters behind its birth, growth, and evolution into a world-conquering phenomenon. This engrossing narrative is essential reading for anyone who wants to understand modern finance—and one of the most pressing financial uncertainties of our time.

Mpreg Romance Fireman Garrett Livingston could probably have any omega he wants. The problem is he isn’t out of the closet yet. Anyone he beds has to promise to keep his secret. That works out just fine so long as he just wants to sleep around and have fun. But nothing is ever that easy, right? When Garrett meets Chip Sorenson, he falls hard and fast. The problem is, Chip isn’t going to waste his time on an alpha that doesn’t know what he wants. Chip is ready to settle down and have babies. But if Garrett can’t admit to his family and friends who he really is, they have no future. As heartbreaking as it is, Chip breaks things off with Garrett. But just as he thinks maybe he’s ready to move on and start a life with another alpha, he discovers he’s pregnant with Garrett’s baby.

Spectacular photos begin with your Sony Alpha and this book. With its Alpha A300 and A350 cameras, Sony has blurred the distinction between introductory and advanced dSLRs. With the expert advice in this book, you’ll learn to use every menu and control perfectly and gain insight into setting up and capturing shots that will amaze you. Reach beyond the automatic settings and take control of exposure, shutter speed, white balance, and every creative element that makes photography an art. Part I explores using your Sony Alpha A300 or A350 straight out of the box. Starting with an in depth look at the Sony Quick AF Live View System, this part of the book also explores all the external controls, explaining the purpose and function of each button, dial, and switch. Understanding your camera’s menu system is crucial to getting great results with the A300 or the A350, and of course the book will also teach you how to maneuver through all of your camera’s menus. You’ll not only learn how to adjust each setting, but when and why you should make each adjustment. Chapter 3 gives a thorough explanation of basic photography fundamentals, without overwhelming jargon and technical terms. If you are a new photographer you will gain an appreciation of aperture, shutter speed, exposure, ISO and white balance. If you are an experienced photographer you’ll find helpful tips and tricks for adjusting each of these key settings. Interchangeable lenses are one of a dSLR's major strengths, and that is true of both the A300 and A350. With so many lens options, choosing auxiliary lenses for the A300 series can become overwhelming. Chapter 4 helps you eliminate the mystery about which lenses to buy and gives you a full explanation of what to look for when evaluating a new lens. With information on wide-angle, normal, telephoto, and macro lenses, this chapter discusses the full Sony lens lineup and goes on to demystify the option of using Minolta lenses on the Sony Alpha. Understanding light and light modifiers, such as diffusers and reflectors, is absolutely essential to getting great results from a dSLR. In chapter 5, you'll find a complete discussion of lighting basics, including the differences between continuous lighting and electronic flash. The full array of light modifiers is outlined, and the chapter goes on to explain the strengths and weaknesses of the proprietary Sony/Minolta hot shoe design. Naturally, there is also a discussion of which flash units work with the A300 series. Chapter 6 consists of a series of exercises designed to enhance your skills when shooting in a wide variety of photographic situations, including everything from macro photography and black and white to high dynamic range, portrait, and travel photography. Each topic is accompanied by numerous full color examples. DSLR photography entails far more than just the camera and lens. Once you fill your memory card with great images, you will need to download, catalog, store and edit those images. Chapter 7 takes you through a quick, but informative tour of the software and hardware options available to simplify your digital workflow. You will be exposed to the differences between RAW and JPEG images and you'll receive a thorough overview of your RAW processing options. You also learn about sharpening and noise reduction software, as well as the best editing applications.

"In the sanctum of a tiny single-seat biplane, a DSA-1 Smith Miniplane, Antonio Rotondo discovered the miracle of flight. A farmer's son from San Giacomo, Italy, Antonio took his first flight over Nairobi, Kenya, in 1970 at the age of 24. By 1976, he had become a commercial pilot. Then, in the early 1980s, he purchased a single-seat, open-cockpit, home-built Smith biplane, a throwback to leather flying caps, gauntlets, pencil-thin moustaches, and twinkling eyes behind oil-speckled goggles. More than three decades later, Antonio's son, Jonathan, came across one of only three airworthy Smith biplanes and thus began a journey to retrace his father's airborne life. He finds Antonio's first flying instructor, an Australian ex-pat living in Kenya; the soft-spoken Swiss-Canadian who managed to get Antonio's biplane into the air; the free-spirit dreamer who bought it to dogfight with his mates; and the air traffic controller who, as a teenager, bought the plans to build the biplane that Jonathan would fly 35 years later. In this story of a father and son, Jonathan catches fleeting glimpses of his father's life in the air and rediscovers his own passion for flight. All the while he captures "the rush of speed, the exhilaration of the wind's breath rushing through the cockpit and, along the fabric flanks, the surreal sensation of gravity's pull and lift's might."--