Posted by Davy Bui on February 4th, 2010 in Book Reviews
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AUTHOR: Ronald Orol
RATING: 6 of 10

Highlights:

• A strong introduction and overview to activist investing for the uninitiated.
• Good coverage of the various methods activist investors use to agitate for change at target corporations.
• Touches on some history and important milestones, like the junk bond explosion of the 1980′s and the corporate scandals in the early 2000′s.

Weak Points

• Too basic for experienced investors.
• No actionable items for readers after digesting the book.

My rating for Orol’s book may be unfair to some extent but with a title like Extreme Value Hedging, I was disappointed by the lack of investment insights to be gleaned from the book. For anyone familiar with Carl Icahn, Eddie Lampert or Bill Ackman, this book is too elementary to be of much interest.

Seeing that one would not become an activist investor after reading a book, the main benefit of such a book would be to shed light on some of the lesser known players in this space — ValueAct Capital, Jana Partners, etc.  While these firms and others are given cursory mention, one is left with little sense of those firms’ strategies, track record, etc.

The better book for that would be The Vulture Investors by Hillary Rosenberg, which is organized by investor and is both more interesting and useful than this one. By contrast, Orol’s book is organized like an academic textbook to activist investing and like many things academia, lacks practical context.