by Maneet Ahuja
John Wiley & Sons
Hedge Funds have been making news.
In a public dust-up on CNBC in January, legendary billionaire investors Carl Icahn and William Ack-man, founder of Pershing Square Capital, brawled over whether global multi-level marketing and nutritional supplement provider Herba life International is a phony pyramid scheme (Ackman's view) or a sound, albeit undervalued company (Icahn's view).
Next came the legal battle between David Einhorn of Green light Capital and Apple Inc. regarding how the technology company should handle its $120 billion cash hoard. According to The Los Angeles Times, the dissident shareholder won a victory in February when a judge "agreed with Einhorn's argument that Apple had illegally included the proposed change with other reforms in a single measure."
Einhorn later dropped the lawsuit, according to The Wall Street Journal, arguing that the legal push for retuning shareholder capital had "served its purpose."
For those trying to follow the esoteric machinations of these financial gunslingers, there may be no better code-cracking manual than Maneet Ahuja's The Alpha Masters. Not yet 30 years old, Ahuja, who is a wunclerkind producer at CNBC's "Squawk Box," serves up a highly readable study of nine men and one woman who, in good times and bad over the past two or three decades, have proven themselves to be the very definition of "smart money."
Here is James Chanos, clubbed "the cynical sleuth." Chanos made his name as a financial detective and world-class short-seller a decade ago by refusing to be mesmerized by hype spewed by energy company Enron Corp. He saw that top executives were unloading their stock holdings and that the skipper, Jeffrey Skilling, was abandoning ship. As Enron's corruption became evident, Chanos's skepticism proved both justified and profitable.
The iconic short-seller recalls being influenced by a 1998 Business Week survey of chief financial officers at S&P 500 companies. Queried on whether they'd ever been asked to materially falsify financial results by their superior, 55 percent said they had been asked but never did, while 12 percent admitted that they were asked and had agreed to it. "What that told me," Chanos...