Quality of leverage versus the quantity of leverage.
In their research, they dive into a few questions, including:
- Why is the leverage being used?
- Under what terms and conditions is the borrowing being done?
- How is the leverage quantity being computed?
They examine how often times investors don't examine the above questions and in their commentary dive into one of the hottest topics from the financial crisis.
D.E. Shaw & Co was founded by David E. Shaw in 1988 and focuses on intertwining technology with finance. It is a hedge fund, private equity firm, and technology development shop all rolled into one. In particular, they focus on quantitative strategies and statistical arbitrage. Notable former D.E. Shaw employees include Jeff Bezos (who founded Amazon.com) and Lawrence Summers, who left the firm to serve on President Obama’s economic team
Enviado: 2/5/2010 12:24