Searching for ALPHA: The Quest for Exceptional Investment Performance

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John Wiley & Sons, May 22, 2000 - Business & Economics - 202 pages
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Can anyone win the investing game? Considering the small number of mutual funds that produce market-beating returns, the task may seem nearly impossible. Even so, there remains an elite group of investment professionals who manage to produce market-beating returns, year after year. What is their edge?

Their edge is defined as alpha-which represents the portion of an investment fund's return that is generated solely by the skills of the portfolio manager. Investors, traders, and speculators alike have searched for a dependable source of alpha for as long as there have been financial markets.

How much of this search is art, and how much is science? The answer to this and other questions can be found within this provocative and highly entertaining book. Some of the topics covered in Searching for Alpha include the following:
* The three reasons why the mutual fund industry will always underperform the overall stock market
* The well-known economist who, by comparing the stock market to a "beauty contest," made a fortune as a speculator
* How a highly successful football betting scheme can be utilized to profitably trade stocks
* How to profit from the idiosyncrasies of human behavior
* What the waxing-and-waning tendency of oil wells can tell us about the impact of technology on the investment management industry
* The commonalities between catching monkeys in India and avoiding taxes on investments in the United States
* The profit potential of value stocks for the next decade

Say goodbye to dry investment theory and hello to a rich and wonderful cast of characters. Who can resist the one-armed mechanic who single-handedly changed the business of U.S. oil production, or the pacifist who pioneered the explosives industry? Where else could you find the likes of Beethoven, Dom Perignon, and the mathematician who stopped Napoleon's advancing army dead in its tracks? Searching for Alpha cleverly combines these colorful figures with cutting-edge financial theories, bringing both to life in a refreshingly educational manner.
www.SearchingForAlpha.com
Jacket Design: Andy Liefer
  

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Contents

The Revolution of IndexBased Investing
17
Can Anyone Outperform the Market?
29
The Case of the Tempted Money Manager
43
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About the author (2000)

BEN WARWICK is a principal of The Bornhoft Group, a registered investment adviser that specializes in alternative investments, and Warwick Capital Management, a quantitative trading firm. He is also the Market View columnist for worldlyinvestor.com, a leading financial Web site. Mr. Warwick has authored three previous books on finance and investing. He received a Bachelor of Science in Chemical Engineering from the University of Florida and an MBA from the University of North Carolina. He lives in Denver, Colorado. www.SearchhingForAlpha.com.

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