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tions (electronic, voice, and data), and health care (pharmaceuticals, medical devices, biotechnology, health-care information technology). Henry has stayed within managed futures and has not ventured into the stock arena for investors. But within the managed futures area, he moves where the sector and market opportunities are.

Sussman's core competency remains market neutral. But within the category he opportunistically moves to and from convertible arbitrage, merger/event arbitrage (the simultaneous purchase of stock in a company being acquired and the short sale of the acquiring company, thus making a directional bet that the deal will go through), statistical arbitrage, volatility arbitrage, and other strategies when he feels the environment changing. Sussman is currently focusing on statistical arbitrage and feels that adding a few more managers with different approaches in this area may help capacity grow.

Only a few of the managers are still doing what they did originally. They stuck to their knitting because that's what worked. An example is value stock picker Cumberland. Kingdon is primarily a global stock picker, although small interest rate, metal, and currency exposure exists.

We've seen a few of the managers gravitate back to their core competencies. For example, Tepper had moved into other areas from his core competency, distressed and junk bonds, but has decided to go back to basics and stick to his core. Cooperman also gravitated back to his core competency—developed country equity stocks (primarily U.S. and Western Europe).

FUNDAMENTAL RESEARCH/QUALITATITIVE VERSUS QUANTITATIVE

Except for Henry, a technical long-term trend follower, the managers highly value fundamental research. Henry relies exclusively on long-term trend-following computerized trading. His philosophy is based on the premise that market prices, rather than market fundamentals, are the key aggregation of information needed to make investment decisions.

Within the general context, the others value fundamental information but significant differences exist. Ainslie, Cooperman, Cumberland, Kovner, and Och are very much at the fundamental end of the spectrum. Och says computers at Och-Ziff are used only to analyze and model; they are tools. The decision making is done by people.

For Kingdon, his edge is doing solid fundamental research, yet