Michael P. Dever | |
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| Born | May 20, 1957 Cleveland, Ohio, US |
| Alma mater | West Chester University |
| Occupation(s) | Trader Businessman |
| Spouse | Kim |
| Children | 3 |
Michael Dever is an American businessman, futures trader, and author. Dever is the founder and CEO of Brandywine Asset Management, Inc., an investment management firm founded in 1982, [1] [2] and he is the author of the [3] [4] investment book "Jackass Investing: Don't do it. Profit from it." [4]
Dever began personal discretionary trading [5] in 1979. [6] [7] [8] [9] He has been a trader and an investor for more than 30 years. [4]
Dever was an early investor with Paul Tudor Jones and John W. Henry. [6]
For over three decades, Dever has managed money for global banks, major corporations, and high-net-worth individuals, who have been attracted to his innovative investment philosophy. [2]
Dever founded Brandywine Asset Management, Inc. in 1982. [1] [2]
He began developing computer studies on commodity price behavior in the 1980s. The basic research and portfolio modeling concepts he uses today were developed through a major research project conducted by Brandywine from 1987 to 1991 using staff researchers and students and faculty from several universities, including the Wharton School of the University of Pennsylvania, Villanova University, and West Chester University. [9] The purpose of these studies was to test all of the ideas that Dever had accumulated to determine if they were statistically valid. [5]
Brandywine implements a multi-strategy approach. [7] Brandywine's philosophy is to create a relatively hedged portfolio, not by buying hedges which cost a premium but by incorporating multiple trading strategies in the portfolio which complement each other. [7] Brandywine follows a methodology based on "return drivers" to trade broadly diversified portfolios in the global currency, interest rate, stock index, metals, energy, and agricultural futures markets. [1] [4] [10] A return driver is the core underlying reason that drives the price of a market. [4] Each strategy must have a high significance of occurring in the future. [1] [11]
Brandywine's trading approach is fundamentally based yet systematically applied. [7]
Brandywine's trading focuses solely on futures because Dever believes that futures offer the broadest diversification with one investment type. [6] In addition, futures are traded with lower transaction costs than stocks, so an investment manager can get much greater diversification with a relatively small number of futures markets than is possible in the stock market. [5]
The offices of Brandywine are located in an award-winning renovated 17th-century grist mill [12] in the Brandywine Valley, outside of Philadelphia, Pennsylvania. The mill renovation project, which includes an actual reconstructed operating mill waterwheel, was designed by Thomas Dever, principal of Dever Architects and brother of Michael. The project was awarded a 1997 Building Excellence Award by the Philadelphia Business Journal. [13]
Dever is an internet entrepreneur. [3] He founded Mind Drivers LLC, a venture development company which operates technology businesses, in 2000. He spent most of the decade of the 2000s founding and operating technology-related businesses. [6]
Dever founded Spree.com, an early e-commerce site, [3] [14] [15] in 1996. He served as president and CEO. [16] Spree.com pioneered the use of viral and affiliate marketing to grow into the world's 7th most-trafficked e-commerce company. [17]
Dever's trading philosophy is based on broad strategy and market diversification. [1] [6] [18]
Dever is a pioneer in risk management and is credited with the development of one of the earliest comprehensive risk management models. In the 1980s, he developed a statistically based money management and risk allocation model. The purpose of the model was to allocate weightings equally to the strategies and markets within a portfolio [5] in order to maintain balance of returns from all strategy-market combinations. [1] The intent of this portfolio allocation model is to ensure that no single market or strategy-market combination dominates the portfolio over an extended period of time. [9] Since that time, elements of this trading model have become popularized as risk parity investing.
True diversification can only be achieved by diversifying across return drivers and trading strategies, not asset classes. Most investors are taught to build a portfolio based on asset classes (such as stocks and bonds) and to hold the positions for the long term. According to Dever, this approach is the equivalent of gambling. [19]
Dever focuses on the permanence of trading strategies and seeks to develop strategies with a strong probability of remaining valid over time (a generation or more). [6] [11] Dever does not have confidence in short term, technically driven strategies because he believes these strategies are not based on sound return drivers and, in most cases, are random. [6]
A trading strategy has two components: a system that exploits a return driver and a market that is best suited to capture the returns promised by the return driver. [19]
Dever's investment process is based on the scientific method [1] [7] [8] and includes the following primary elements: [6] [19]
Dever emphasizes the need to minimize event risk. [1] Diversified portfolios are subject to far lower event risk than conventional portfolios. Leverage can even be added to a diversified portfolio, and the diversified portfolio would still have less event risk and volatility than a conventional portfolio allocated to stocks (60%) and bonds (40%). [20] Dever's philosophy is to incorporate as many diversified return drivers as possible in the portfolio so that they are not all subject to the same external events. [1] But there is always the risk of loss, regardless of the amount of diversification.
Dever believes that drawdowns are the largest impediment to strong, positive returns over time. [20]
Dever is the author of the best-selling [3] [4] investment book "Jackass Investing: Don't do it. Profit from it."
"Jackass Investing" is a book that challenges conventional investment wisdom [2] and presents an entirely new system of thought. [10] The book describes 20 common investment myths [4] and explains why each is a myth and not a fact. [10]
The definition of "Jackass Investing" is taking unnecessary risk. [20]
The book was published in 2011, but Dever initially developed the idea for the book in 1999. [2] He decided to write "Jackass Investing" to systematically refute major investment myths by presenting the truth. He believes that most investment professionals preach similar "myths" that prohibit investors from creating truly diversified portfolios.[ citation needed ]
Passive management is an investing strategy that tracks a market-weighted index or portfolio. Passive management is most common on the equity market, where index funds track a stock market index, but it is becoming more common in other investment types, including bonds, commodities and hedge funds.
A hedge is an investment position intended to offset potential losses or gains that may be incurred by a companion investment. A hedge can be constructed from many types of financial instruments, including stocks, exchange-traded funds, insurance, forward contracts, swaps, options, gambles, many types of over-the-counter and derivative products, and futures contracts.
Long/short equity is an investment strategy generally associated with hedge funds. It involves buying equities that are expected to increase in value and selling short equities that are expected to decrease in value. This is different from the risk reversal strategies where investors will simultaneously buy a call option and sell a put option to simulate being long in a stock.
Financial risk management is the practice of protecting economic value in a firm by managing exposure to financial risk - principally operational risk, credit risk and market risk, with more specific variants as listed aside. As for risk management more generally, financial risk management requires identifying the sources of risk, measuring these, and crafting plans to mitigate them. See Finance § Risk management for an overview.
A "fund of funds" (FOF) is an investment strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities. This type of investing is often referred to as multi-manager investment. A fund of funds may be "fettered", meaning that it invests only in funds managed by the same investment company, or "unfettered", meaning that it can invest in external funds run by other managers.
Jack Schwager is a trader and author. His books include Market Wizards (1989), The New Market Wizards (1992), Stock Market Wizards (2001) and Unknown Market Wizards: The best traders you've never heard of (2020). He is a well-known author, fund manager and an industry expert in futures and hedge funds. He's published a number of books, such as Market Wizards.
Global macro is an investment strategy that leverages macroeconomic and geopolitical data to analyze and predict moves in financial markets. Large-scale or "macro" political and economic events can disproportionately impact certain sectors, such as the energy, commodity, and currency markets, over others. The strategy typically employs forecasts and analysis of interest rate trends, international trade and payments, political changes, government policies, international relations, and other broad systemic factors.
Commodities Corporation was a financial services company, based in Princeton, New Jersey, that traded actively across various commodities. The firm was noted as one of the leading commodity and futures trading firms. CC is credited for launching the careers of many notable hedge fund investors and for its influence on global macro investing.
Lawrence D. Hite is a hedge fund manager who, along with Ed Seykota, is one of the forefathers of system trading. He is the author of the book, The Rule: How I Beat the Odds in the Markets and in Life—and How You Can Too, which was named a Wall Street Journal, LA Times, and Porchlight Books bestseller.
The following outline is provided as an overview of and topical guide to finance:
Trend following or trend trading is a trading strategy according to which one should buy an asset when its price trend goes up, and sell when its trend goes down, expecting price movements to continue.
Amaranth Advisors LLC was an American multi-strategy hedge fund founded by Nicholas M. Maounis and headquartered in Greenwich, Connecticut. At its peak, the firm had up to $9.2 billion in assets under management before collapsing in September 2006, after losing in excess of $6 billion on natural gas futures. Amaranth Advisors collapse is one of the biggest hedge fund collapses in history and at the time (2006) largest known trading losses.
François-Serge Lhabitant is with a European family office where he directly oversees a multi-billion portfolio allocated primarily to hedge funds, private and public markets, and risk-controlled strategies. His portfolio has received several awards for its performance and risk-adjusted performance.
Brevan Howard is a European hedge fund management company based in Jersey with its funds domiciled in the Cayman Islands. Brevan Howard was founded in 2002 by Alan Howard, alongside four other co-founders including Chris Rokos, and is widely considered to be one of the top global macro hedge funds.
Roy Gary Niederhoffer is an American hedge fund manager. He graduated from Harvard College magna cum laude in 1987, with a BA in computational neuroscience.
Peter F. Borish is chairman and CEO of Computer Trading Corporation (CTC), an investment and advisory firm. Borish sits on the board of CIBC Bank USA. He is also a partner in Adam Hoffman's natural gas options trading team at Torsion Technologies, LLC. and a Partner of Quantrarian Asset Management
A managed futures account (MFA) or managed futures fund (MFF) is a type of alternative investment in the US in which trading in the futures markets is managed by another person or entity, rather than the fund's owner. Managed futures accounts include, but are not limited to, commodity pools. These funds are operated by commodity trading advisors (CTAs) or commodity pool operators (CPOs), who are generally regulated in the United States by the Commodity Futures Trading Commission and the National Futures Association. As of June 2016, the assets under management held by managed futures accounts totaled $340 billion.
Brandywine Asset Management, Inc. is an American investment management firm founded and managed by Michael Dever. The firm is registered as a commodity trading advisor.
Jackass Investing: Don't do it. Profit from it. is a book written by Michael Dever published by Ignite LLC in 2011. Dever is the founder and CEO of Brandywine Asset Management, Inc., an investment management firm founded in 1982.
Quality Capital Management Ltd is a UK-based hedge fund specialising in managed futures. The company was founded by Aref Karim in 1995 and its headquarters is in Weybridge, Elmbridge, Surrey, England.
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