If one looks around, there are a tons of innovations happening in the financial sector. From the instruments side, the world has graduated from simple plain vanilla options to exotic derivatives, CDO’s on CDO , an alphabet soup of all mortgage derivative products. Ideally all these should help in better management in risk, right ? There are more players in the markets, different types of players, hedgers, arbitrageurs, speculators, market makers, hedge fund managers, prop desk traders etc.

This is the second post on this book which will try to summarize the chapters on Hedge funds from this book. Brave new world of Hedge Funds Hedge funds exploded in to the financial world in the recent years. There are various types of hedge funds, classic one being top down. A few nice take aways from this chapter is the discussion of tulip mania where the author reasons that the existence and flourishing of futures market was the reason for speculative mania.

I was rereading Paul Graham’s article and these words made a lot of sense AGAIN. One of the best tricks I learned during our startup was a rule for deciding who to hire. Could you describe the person as an animal? It might be hard to translate that into another language, but I think everyone in the US knows what it means. It means someone who takes their work a little too seriously; someone who does what they do so well that they pass right through professional and cross over into obsessive.

If you ever want to analyze data using charts , and , excel -data interaction becomes overwhelming, then one needs to write one’s own charting infra..I was in a similar position where excel based charts were not enough for my analysis. There was simply too much data to look at and hence ended up writing my own diagnostic tool using rails-postgres . Gruff a charting library for rails proved to be INVALUABLE.

Q) What were the recent changes to the Dow Composition ? Deletions : Kodak, International Paper, and AT&T Addition : Pfizer, AIG, and Verizon.