Book Review: Hedgehogging, by Barton Biggs

If you’re interested in learning more about the day-to-day operations of a hedge fund, then you should read Hedgehogging by Barton Biggs. This relatively recent book (published in 2008) was written by a 30-year finance veteran from Morgan Stanley who then quit to start his own hedge fund. Despite the glorious ideas that most people have about running their own fund, Biggs talks plainly about the challenges and drawbacks of trying to do so. He talks about things you’d expect, like raising funds and going on road shows, but also touches on more serious issues, such as the psychological impact and wear-and-tear that a fund manager faces. He recounts the stories of several personal friends, going through their background, performance, and offers helpful advice from their experiences. A few of the stories are so outlandish as to even be unbelievable (e.g. Chapter 20, see below), but he recognizes that ahead of time, and says so in the chapter opening. Suffice to say, the characters in this book are not lacking in personality.

In general, Hedgehogging is very well written, and offers a ton of insight into the usually secretive world of hedge funds. Biggs has a very informal tone at times, yet his intelligence always shines through. The book is written less in a nonfiction tone, but instead is quite personal and helpful. A possible, but quite understandable, drawback is the fact that most of the names of the characters and funds mentioned have been changed. The lessons some of the interviewees teach are worth more than the cost of this book totally.

Here is a list of the table of contents, taken from

  1. The Triangle Investment Club Dinner: Hacking Through the Hedgehog Jungle
  2. The New Hedgehogs May Have Been Golden Boys, but They Still Bleed Red
  3. Short Selling Oil: The Crude Joke Was On Us
  4. Short Selling Is Not For Sissies
  5. The Odyssey of Starting a Hedge Fund: A Desperate, Frantic Adventure
  6. The Roadshow Grind: Blood, Sweat, Toil, and Tears
  7. The Run-Up and Haunted by Remembrances and Doubt
  8. Hedgehogs Come in All Shapes and Sizes
  9. The Violence of Secular Market Cycles
  10. The Battle for investment Survival: Only Egotists or Fools Try to Pick Tops and Bottoms
  11. From One Generation to Another: Bismarck and the Yale Endowment
  12. Nature’s Mysticism and Groupthink Stinks
  13. The Internet Bubble: I’d Still Rather Have Air-Conditioning
  14. Great Investment Managers Are Intense, Disciplined Maniacs
  15. You’re Only as Beloved as Your Most Recent Performance
  16. Once You Have a Fortune, Can You Hang On To It?
  17. Three Investment Religions: Growth, Value, and Agnostic
  18. The Trouble with Being Big
  19. Bubbles and the True Believer
  20. Divine Intervention or Inside Information? A Tale That Will Make You Blood Run Cold
  21. John Maynard Keynes: Economist, Hedge-Fund Manager, and Fascinating Character
  22. Conclusion and Recommended Reading

If you love learning more about the hedge fund world, either to start your own someday, or simply pick up a little investing advice, Hedgehogging is a great resource. I recommend you check it out!