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valuations and technicals are also important. And while fundamental research is critical at Galleon, Rajaratnam says trading is as important. The firm actively trades around its core positions. A dual focus exists with equal weighting. Tepper is also a trader, trading around his positions.

While qualitative research is very important to Singer, Stark, and Griffin, quantitative skills are important as well. Singer says they have quant cleverness skills but are not a quant shop. They also know the companies, and are close to the companies. They combine quantitative and qualitative.

For Sussman, the percentage allocation is driven by opportunity. The computers spit out expected return and expected risk of each investment owned. Opportunities are analyzed and simulations done. But overlay of judgment is very important.

Stark says he fits between center and the pure black box (undefined computerized approach) end of the continuum. Models indicate where they should be, and they adjust qualitatively. They are quantitatively driven but not purely. Human inputs are used to adjust hedges and analysis. Portfolio optimization is an amalgam of qualitative and quantitative analyses. They screen strategies on a global basis for risk and expected return. In convertible arbitrage, they look at theoretical mispricing, then at creditworthiness of the convertible, and then at fundamentals of the underlying equity. Overall portfolio analysis is applied for strategy and geographic diversification, as well as balancing the risk of the position.

BOTTOM-UP VERSUS TOP-DOWN

Cooperman follows a bottom-up approach to stock selection. In determining a company's private value, he looks at over 100 different economic, monetary, and valuation data points. Ainslie, Och, Cumberland, and Rajaratnam also take a bottom-up approach—visiting companies, talking to management, analyzing cash flow. Stark describes his approach as bottom-up as well, based on credit research and knowledge of the markets. Sussman also describes his approach as bottom-up because his people are intimately familiar with specific markets and opportunities that arise. Decision making is done trade by trade.

In contrast, Kovner is top-down oriented. He makes an overall