A perfect weekend read is The Alpha Hedge Fund Hall of Fame . The website honors fourteen of the best ever hedge fund managers who "had an outsize impact on the hedge fund industry, enjoyed spectacular long-term success and displayed tremendous originality."
What accounts for your success?
Louis Bacon: Hard work, patience, knowing when to hold ’em, fold ’em or go all in. We have a rigorous risk framework, and although I do not micromanage every position, my portfolio managers understand the risk format prior to joining the firm.
What’s your take on the next generation of managers?
Paul Tudor Jones: I see the younger generation hampered by the need to understand and rationalize why something should go up or down. Usually, by the time that becomes self-evident, the move is already over. ... We learned just to go with the chart. Why work when Mr. Market can do it for you? .....explosion of information on the Internet, creates the illusion that there is an explanation for everything and that the primary task is simply to find that explanation. As a result, technical analysis is at the bottom of the study list for many of the younger generation, particularly since the skill often requires them to close their eyes and trust the price action. The pain of gain is just too overwhelming for all of us to bear!
How do you choose a hedge fund ?
David Swensen (manages the $22.5 billion Yale university fund): At Yale the most important shift in vetting hedge fund managers over the past 15 or 20 years has been an increasing focus on the character and quality of the investment principals.
Years ago, I would have talked about this investment characteristic or that objective factor. Now we focus overwhelmingly on assessing the managers running the business. The fundamental question is, Are these people you want to be partners with? I think it really comes down to individual characteristics.”