Beating the Indexes: Investing in Convertible Bonds to Improve Performance and Reduce Risk

Product Author Bios

BILL FEINGOLD (Dobbs Ferry, NY) is Managing Director of convertible securities trading with BTIG LLC. He has previously managed convertible securities at Goldman Sachs; served as senior partner and co-manager of the FrontPoint Convertible Arbitrage Fund; and co-managed the Clinton Riverside Convertible Fund, which achieved some of the top performance in its strategy under his leadership. Feingold also created the Advanced Trading Center at Schaeffer's Investment Research for clients seeking to expand their investment toolkits.

You can beat the market by avoiding risk-averse, career-protecting investment managers and index-based strategies that are perfectly satisfied with mediocrity. Fact is, as indexing and quasi-indexing have become more prevalent, the dangers of these strategies have become more pronounced: a bias toward overvalued, overgrown, large-cap stocks likely to hit long periods of underperformance. But there’s good news: If you’re willing to invest a bit more of your own time, you have a much better chance of beating the pros than they want you to think. In Beating the Indexes, leading trader and Minyanville columnist Bill Feingold shows you how to systematically exploit the biases and mediocrity of index investors, and continuously make winning investments. Writing for individual investors as well as professional advisors and money managers, Feingold introduces a more profitable set of investing strategies based on convertible bonds and related alternative investments. In this surprisingly readable (even fun to read) book, each chapter exposes one index investing myth – and presents a powerful strategy for beating investors who still buy into it. If you’re tired of minimal returns that disappear with the slightest market volatility, this is the book you’ve been searching for.

Table of Contents

Foreword     xv
Preface     xix
Introduction     1

Part I: Our Flawed Institutions
Chapter 1  Indexing and Its Discontents     7
Chapter 2  The Individual’s Edge     25
Chapter 3  Delusions and Illusions: Chasing Performance in Our Lost Decade     43
Chapter 4  A Change is Gonna Come     51

Part II: Convertibles, a Better Solution
Chapter 5  The Very Basics     61
Chapter 6  Reminiscences of a Convertible Operator     69
Chapter 7  A Quick Review and Quiz     121
Chapter 8  Enough Already…How Do Convertibles Actually Work?     145
Chapter 9  What to Look for in a Convertible     177
Chapter 10  Convertibles For…     201
                  I. Individual Investors     201
                 II. Financial Advisors     213
                III. Nontraditional Institutional Investors     217
                 IV. Corporate Financial Officers     231
                  V. Students     249
Chapter 11  Introduction to Advanced Topics     257
Suggestions for Further Reading     285
Glossary     287
Index     291