SuperCa$h: The New Hedge Fund Capitalism
By James Altucher
John Wiley & Sons, Inc.
211 pages, $49.95
REVIEWED BY LESLIE N. MASONSON
SuperCash is Altucher’s last book of a trilogy, where he endeavors to point out the gaps and holes in capitalism. Previously, he penned Trade Like a Hedge Fund and Trade Like Warren Buffett. The premise of his latest book is that hedge fund managers need to convert cash assets into supercash, thereby achieving maximum rather than ordinary returns. He contends that hedge fund managers can no longer find stocks that triple in a day, so they must be on the lookout for other opportunities to maximize return.
To achieve these returns, Altucher, a partner in a hedge fund, proposes that hedge fund managers concentrate on a handful of more recently available alternative investments including asset-based lending, Pipes (Private Investments in Public Equities), closed-end fund arbitrage, unique IPOs, art work, music and rare coins.
It is certainly a disparate group of alternatives. I’m not sure that hedge fund managers would find sufficient profits or adequate liquidity or even have the skill to invest in art, music or rare coins. Those areas seem a bit farfetched, and especially difficult to make supercash on.
More practically, Altucher details five money-making strategies: closed-end fund arbitrage, short-selling, QQQQ trading, December retail stock timing and fading the unemployment data. Readers will be able to use these strategies with minimal difficulty.
Altucher warns investors to be aware of hedge fund scams. He then provides steps for due diligence to find the best of the bunch and includes sample background reports on hedge fund principals. This is timely in light of recent hedge fund blow-ups and the failure of many large institutional investors in these cases. Additionally, the author offers a list of books and blogs written by hedge fund managers that readers may find useful.
Altucher provides an unusual perspective into the hedge fund industry. His writing style is direct and entertaining. However, I’m neither convinced of how realistic some of the alternative investments are in providing supercash opportunities, nor sure how many hedge fund managers are actually using these vehicles and making supercash. Nevertheless, investors considering investing in hedge funds can benefit from Altucher’s insights.
Leslie N. Masonson is president of Cash Management Resources and the author of All About Market Timing and Day Trading on the Edge. E-mail: lesmason@frontiernet.net.
