Barton Biggs the Hedgehogger Part 1 -- A Review

This long weekend, with the facebook newsfeed rife with exciting activities, I decided to spend some time getting some of my overdue “assigned” reading done. I picked up Hedgehogging by Barton Biggs, a hedge fund industry veteran. Biggs joined Morgan Stanley in the early 70s as a partner responsible for setting up, at the time non-existent, research and investment management departments at the firm. He stayed there for 30 years before leaving to co-found Traxis Partners.

While it isn’t Gatsby, the book is entertaining. Biggs begins the book speaking of his experiences with the Triangle Investment Club, a monthly meeting of 25 hedge fund and aggressive long-only money managers. Using that anecdote as an anchor, he goes on to a series of other stories relating to his conversations with money managers while also sharing his personal journal entries detailing his thoughts as he went about raising money for his hedge fund. Biggs had no reservations about sharing his perspective and those of others in his circle. His outlook on everything from the markets [bullish] to gold [doesn’t like it] were openly shared.

As for drawbacks, I found the book mildly discursive where Biggs went from point to point without any sort of noticeable fluidity. The upside to that is he did cover a lot of ground. To name a few:

• Jewelry as a currency in apocalyptic situations

• The quality and history of the Yale endowment

• His thought on art as an investment

• Private equity as an investment vehicle

• Fibonacci’s numbers and the unlikelihood of using them to track the markets

• Money managers liking golf

The wide array in topics indicate that Biggs really wanted to get out everything in his mind from the past few decades. Although a creative writing major at Yale, this was his first publication. Prior to his career in financial services, he attempted a career writing short stories. So, to finally have a debut book, you can tell the passion to lay it all out there was evident. He is genuine from start to finish.

Although it can easily be argued that he overdid it a little with the anecdotes, it brought charm to the book. Unfortunately, anecdote is the operative term for these stories. There really couldn’t have been considered proper case studies as we really couldn’t get an academic sense of these folks investment styles. He basically started each story describing a manager with several adjectives, including always “attractive” or “handsome,” and ending it giving us a sense that managing money is a really tough job. However, there were useful subjective snippets that we were able to take from these stories.

An odd thing about the book, aside from using too many exclamation marks, is how he ended it. He basically went into this bio about John Maynard Keynes, who he admired as a hedge fund manager. Don’t get me wrong. An incredible figure in our history, but it just came out of nowhere, and the book ended after detailing Keynes life. The last line being “It’s an incredible story!” Yeah, it is. But, so what? What does that have to do with anything?

That being said, considering reading this book has inspired four blog posts, who am I to judge? The following blog entry will not cover the entire book, but a concept from the book that got me thinking. If that isn’t an endorsement to read this book, then I don’t know what is…

Coming Up:
Part 2: The Pulse of the Markets Before the Credit Crisis