I would love to learn a little more about a day (week, month) in the life of the above. Has anyone written a book detailing the specifics on how how EACH of these type of managers actually operate day-to-day (fiction if based on reality or non-fiction)?
Day traders seem to be "in the moment", hoping their minute or hourly investment changes will come out ahead each day? But do Mutual Fund and Private Investment Managers also make daily changes based upon the current market conditions? Or do they make investment change decisions weekly, or over even longer periods even if there is immediate news that is very likely to substantially change the gain/loss of any one investment? An example I would be interested in how each of above would react, if at all, would be to HP's latest news (in the case of MF Managers, mainly large cap funds). Would any of the above at least consider selling HP knowing that the stock will likely plunge, at least temporarily, but also given the likelihood that HP's philosophy change could easily be negative over the long term?
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Mutual fund stock managers do not make changes nearly as rapidly, and the most extreme example for a stock mutual fund would be something like CGM Focus, which has as much as a 400% turnover in a year. Mutual fund managers can't be daytraders. I'm not saying mutual fund managers should be daytraders, but I am under the belief in the case of some alternative funds that they are not active enough - Rydex Managed Futures (which goes long/short a set of commodities and currencies) changes once a month. In this market, once a month isn't enough. A value fund that believes the HP drop is overdone may buy or add more if they actually still have cash on the sidelines after the recent redemptions - or they may sell if they believe the HP news is a lasting negative. Many, many believed that HP was a great value when it dropped into the 30's. Well...
http://www.zerohedge.com/news/here-who-getting-creamed-todays-hewlett-packard-bloodbath-and-why-it-just-not-paulsons-year
Hedge funds, with their 2/20 fees (2% management and 20% of the profits), can trade much more rapidly and have the ability to take on more advanced strategies than most mutual funds (although some strategies, such as "Event-Driven" are now appearing in mutual fund form.)
The main "roundabout" way to invest with a hedge fund manager in the US is Greenlight RE (GLRE), a reinsurance company whose "float" is invested with famed hedge fund manager David Einhorn's Greenlight Capital. The other roundabout investment in the same manner would be Fairfax Financial Holdings (FRFHF.PK), a Canadian insurance company, the float of which is invested by famed value investor Prem Watsa, who bet against the subprime crisis in 2008. http://en.wikipedia.org/wiki/Fairfax_Financial
Some foreign stock markets have publicly listed hedge funds; I believe Canada used to have a public energy fund run by legendary energy investor T Boone Pickens, but I don't see it anymore. As I've mentioned before, there's quite a bit in London, including publicly traded hedge fund feeder funds (versus the roundabout way of investing in Greenlight through something like Greenlight RE.) I do own London fund holdings - there are pink sheet versions on some of these London funds in the US, but they rarely ever trade. Cambria Global Tactical ETF managers Meb Faber and Eric Richardson talk about these public hedge funds in greater detail in their book, "The Ivy Portfolio".
I don't like Jim Cramer, but his first book, "Confessions of a Street Addict", has a large portion devoted to some (more of a broad view) of the day-to-day activities and stories of running his hedge fund. If you want to read a hedge fund tale that's not heavily technical, it's a fun read. Cramer's discussion of his tactics (including fomenting a negative or positive view in the market on a stock to suit his needs, because the SEC doesn't care; spreading rumors, etc - the best quote: "When you're in hedge fund mode, do not do anything remotely truthful.") while at his hedge fund also got him in hot water on a segment on thestreet.com. You can find it on Youtube; I didn't want to link it here because the clip pops up in the thread.
Speaking of David Einhorn, his book, "Fooling Some of the People All of the Time" is a fantastic read about his case against Allied Capital, a short position that turned into a larger battle between him and the company.