Running from Leverage
Emma Humbert wrote a review of A Demon of Our Own Design recently on Victor Niederhoffer’s site:
I have a problem with this book, A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation. It irritates me to no end that Richard Bookstaber made his money first at Salomon Brothers and then at a major hedge fund that goes out of its way to block hedge fund regulation of any form. His career and fortune was made working at firms that use a lot of leverage and highly complex investment strategies to make money. And he was in charge of risk. But now that he has become a long/short equity manager, a relatively simple strategy that does not require much leverage, he is saying leverage and complexity are bad things. I find the whole thing a little disingenuous. Which is not to say the author does not make some valid observations.
