Initial Data Collection
“Experts often possess more data than judgment.”
“The goal is to transform data into information, and information into insight.”
In the preceding chapter, we scanned third-party databases to find hedge fund candidates that would fulfill our search criteria. We then reviewed the resulting candidates and discussed which were the most promising. Summary statistics were presented and a series of basic performance and volatility charts were reviewed so that we could prioritize the remaining names on the list.
After careful consideration of the data, I think it is safe to conclude that funds Three and Five exhibited the most attractive risk/return profiles—they were both able to weather the difficult market environment in 2008 (when the S&P 500 declined −37 percent), and each provided the highest annualized returns while doing so with the lowest variation in returns (standard deviation).