tailieunhanh - Hedges on Hedge Funds Chapter 10

CHAPTER 10 Long-Short Strategies in the Technology Sector. This chapter examines how investors can take advantage of the opportunity to profit from hedge fund investing in the technology sector. Over the years, technology-focused hedge funds have turned in outstanding performance numbers while minimizing risk in the most volatile segment of the market. | 10 H0 Long-Short Strategies in the Technology Sector This chapter examines how investors can take advantage of the opportunity to profit from hedge fund investing in the technology sector. Over the years technology-focused hedge funds have turned in outstanding performance numbers while minimizing risk in the most volatile segment of the market. Investors new to technology-based hedge funds have their pick of directional or opportunistic funds. In other words the specific investments and trading strategies are highly dependent on specific market conditions and opportunities. The advantages of taking a long-short or hedged approach to investing in the highly dynamic volatile technology sector are compelling. See Table . It is important to recognize the pervasiveness of information technology IT in daily life. Without our vast array of connected electronic devices many aspects of the global economy and daily life would be inconceivable. The awareness of this reality was a significant driver of the technology bubble of the late 1990s. The Nasdaq composite index the barometer of tech stocks enjoyed an unparalleled run until March 2000 that created more new wealth than at any time in history. Then just as quickly as they had gone up the bottom fell out from under technology stocks. The highs and lows experienced by the tech market during this period in history are dramatic. 143 144 HEDGES ON HEDGE FUNDS TABLE Why Invest in a Technology Hedge Fund Information Technology Drivers Technology is key to sustain productivity increases globally. The Internet is changing the face of communications as well as business commerce worldwide. Continued convergence of technologies will accelerate the pace of economic growth and social change. Virtuous circle of innovation should drive new technological breakthroughs. Medical Technology Drivers Aging populations in developed countries demand top flight healthcare. Industry consolidation improves efficiency and profitability. .