Active Investing in the Age of Disruption

The amount of data and research available to investors is overwhelming. Investment professionals are bombarded with hundreds of emails containing news and opinions on a daily basis. Television shows, podcasts, and investment blogs offer a constant stream of analysts, pundits, and executives offering their views on how to outperform the market. All of this information, almost exclusively focusing on the current point in time, is only of value to investors if they understand how, when, and where it will be used. For most non-professional investors, passive alternatives are usually the best option. However, dedicated professionals can benefit immensely from disciplined, effective active management. Active Investing in the Age of Disruption is designed to help investment managers, professional asset allocators, and sophisticated individual investors generate positive alpha. Providing an innovative, adaptive learning approach to active equity investment strategies, this book examines a range of investment methodologies that can be implemented to achieve predefined risk and desired return. Written by the manager of Duke University's Direct Investments portfolio, this book offers insights on the investment process, examines the broader scope of the financial markets, and explains how the stream of data can be used to create superior results. Divided into three parts, the book first analyzes the challenges faced by active investment managers that arose in the last decade and explores how these challenges will affect the next ten years and beyond. Part two contains detailed coverage of the investment tenets and investment process necessary for creating alpha in the public equity markets, including security selection, valuation, and portfolio management. The final part looks at the bigger picture, focusing on goal congruence, fiduciary responsibility, and learning. Beating the market through active equity investing has never been more difficult: central bank intervention, macro-driven financial markets, and accelerating technologies are continuing to disrupt traditional business models across industries. The obstacles in the current environment will likely remain for some time, requiring investment managers to think differently about risks and opportunity. Active Investing in the Age of Disruption is an invaluable resource for refining the investment process and leveraging the alpha potential of different strategies for outperforming the market.