Wave Theory For Alternative Investments: Riding The Wave with Hedge Funds, Commodities, and Venture Capital Hardcover – December 30, 2010

I am a rising junior at the University of Pennsylvania’s Wharton Business School studying Finance. During the summer leading into the most crucial year of my studies, I wanted to prepare myself for my higher level finance courses by developing some groundwork on the various asset classes. I am interested in getting into the field of wealth management; since junior year is the time when most students secure internships with big companies, I wanted to get ahead and make sure I had some knowledge of the asset classes going into the recruitment process as well. I very easily could have surfed the web for more information, but when it came to alternatives, I found a lot of the information to be inconsistent and cursory. Equities and fixed income are one thing, but there seems to be a lot of scattered data on these “alternative” assets.After some brief research, I came across this book, “Wave Theory for Alternative Investments,” and decided I would give it a try. Stephen Todd Walker looked like he had an impressive background on the subject and I figured it would be worth a shot.After making my way through the book, I was impressed by the quality of its content. It lacked the dryness of a textbook, but was much more comprehensive than your run-of-the-mill “Idiot’s Guide” to investments. Walker’s “Wave Theory” helps contextualize how these markets move, and the presentation of his history and analysis of venture capital, commodities, precious metals, and hedge funds made it easy for an amateur like myself to fully understand how these asset classes came about, what they are, and how they can be used in a well-diversified portfolio. I would have appreciated it if Walker also addressed real estate, but I can imagine that would have taken this 500 page book a bit too far in the length category, so I cannot really complain.I would absolutely recommend this book to any finance student. Walker has thoroughly convinced me that the alternative asset classes will play a significant role in the investment landscape moving forward. If you have some time off during your summer or winter breaks, pick this book up in your free time and take a step ahead toward landing that big Wall Street internship.5/5 stars for exceptional content quality, very reasonable price, and timely delivery.

Wave Theory for Alternative InvestmentsRiding the Wave with Hedge Funds, Commodities and Venture CapitalBy: Stephen Todd WalkerMcGraw Hill Publishers 2011Reviewed By: Dr. Joseph S. MarescaThe book discusses the long history of venture capital with numerousexamples and impressive statistical data. BAIN and a number of otherLBOs did well during tough periods. Diversification is known to lowerrisk or the standard deviation. A number of top billionaires sufferedlosses of from 8-10% from 8-29- 08 to 10-01-08. These were about myown losses during that infamous period.The author discusses a wave theory which says that securities movein waves. Numerous graphs are shown to demonstrate this concept.The Large - cap growth and core funds did the best from 1989-2010.Industrial metals were on the top of commodity returns.My investment in the Southern Copper Corp grew 67% fromAugust, 2008 to date with the reinvestment of dividends.The author lists a number of investment rules. I concur with this list. i.e.o Have patience over the long term.o Follow the smart money and institutional investors for clues.o Review the market direction.o Abandon emotion. This is very critical .o Trust your instincts. ( meaning that you should get out if you are uncomfortable)o Greed is bad. ( waiting too long to take profits can be disastrous)o Diversify.o Performance matters. Look at the 10K filings with the SEC.o Do your own due diligence research.o History repeats itself. i.e. recessions and even depressionso Look before you leap.o Knowledge= Powero Buy at the beginning of a market rally.Examples of top entrepreneurial companies are Zippo Manufacturing,Kraft Cheese, Eli Lilly and others. 5 important venture capitaldeals are listed; namely, Twitter, Avid, Tengion Inc. , Grouponand Energy Recovery Inc. (ERI)The book lists important questions every entrepreneur should askprior to investing. Some of these questions are as follows:o Review the competitive advantage.o Look at the future.o Examine the track record of the venture.o Study the company management.o Review the target market of customers.o Analyze revenues, expenses, cash flow and earnings.o Examine the uniqueness of the product or process.The book contrasts gold with the return on stocks over the past30 years. Gold returned 4%; whereas, stocks returned 10.6%.Some top performing hedge funds are listed. ( over 60% returns)i.e. Mulvaney Global Markets Fund Ltd., JWH Global Analyticsand Dighton Aggressive SP.Some of my own top performing investments over the pastseveral years are:o ITC Holdings up 30%o Lazard World Dividend and Income Fund up 49%o Netscout Systems up 96%o Netgear up 121%o Petsmart up 90%Overall, the acquisition of this book would be very helpful inperforming your own due diligence on investments.Always take a look at company earnings, cash flow, revenues,expenses, the competitive environment, past performance,data from the SEC Edgar System and reports of investmentanalysts prior to making any significant investment decisions.The book is priced reasonably for the considerable value ofthe information contained. A wide constituency of readerscould benefit from this book including students offinance/economics, investors, fund managers, governmentpolicy makers, foreign investors and many others.Steven Todd Walker has had a distinguished career managing theportfolios of high-profile companies and investors. He was namedone of Barron's "Top 1000" advisers in 2009 and 2010. Now, he isManaging Director of Investments at Oppenheimer & Co.He worked for Alex Brown and took Starbucks and Microsoft public.[...]

The division of the book into venture capital, commodities, precious metals, and hedge funds sections made it very easy for me to find information on the specific topics for which I wanted to know more. Furthermore, the charts and graphs provided throughout the book were helpful sources of data and provided explicit evidence for information disclosed in the book.

For anyone who wants to learn more about Venture Capital, Hedge Funds and other alternatives, I highly recommend Wave Theory. This book is a perfect investment if you are interested in getting a historical background on alternatives from the perspective of someone who's actually been in the industry. It's also interesting to look at the patterns in alternatives that the author has discovered.. Best of all is the book itself. I go to Wharton and I've never read a book like this. It's a great read and well worth it.