Tuesday, May 01, 2007

Book Review: Running Money

One of my summer goals is to read a massive amount of investment and personal finance books. I plan on giving a quick overview and detailed recommendation on each book I read this summer. The first book I read was Running Money by Andy Kessler.

Kessler documented his five years running a Silicon Valley hedge fund detailing his struggles raising money, dealing with high-flying technology boom, and surviving during the market downturns. Kessler's hedge fund sought tech stocks with valuable intellectual property and demonstrated the potential to double or triple in the near future. The fund, in fact, was a primarily long-only fund that usually kept its holdings for more than a year.

Personal Takeaways:
One particular aspect of the book that I liked was how Kessler articulated hedge fund price manipulation during conference calls. He pointed that funds with a strong short position often ask management utterly ridiculous questions to simply drive down the after-hours prices down half of a percentage point. I also liked the simplicity of his fund. The fund was run above an art studio and employed only one additional employee. Unlike the sexy funds run by Soros and others, Kessler was able to yield an average run of 50% without massive overhead.

I really liked several parts of the book including the series of chapters documenting the accumulation of capital and his personal take on achieving money in any type of market, but many parts of the book ran on offering only tidbits of concrete content spanning across several chapters. In short, I think this book is ideal for the long-term investor really interested in Silicon Valley. Personally, I enjoy short-term investing and doing so across all of the different industries not specializing on an isolated market segment. Go ahead and read the spark notes on this bad boy, they should give you the whole story in a couple pages.

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