Access to premium HD on computers has eluded most for way to long, so as soon as we heard that it was finally possible for anyone to add a CableCARD tuner to just about any Media Center, we just knew we had to try it for ourselves, and more importantly, share with you exactly how to do it. This doesn’t really require any hacking, or anything illegal for that matter — we’re not lawyers — but it isn’t cheap. The internal version of the ATI Digital Cable Tuner pictured above can be found new on eBay for about $195, or new from PC vendors like Cannon PC for just under $300. If that doesn’t seem like a bad deal to you and you already have an HTPC up to the challenge, then you should join us on our journey to HD bliss by clicking through.
How To install a CableCARD tuner on any computer

What you need
It should go without saying that in order for this to work you’ll need a pretty new computer running either Windows Vista Premium (or higher) or Windows 7 as well as an ATI Digital Cable Tuner (DCT). The first requirement you probably already have, but the second can be a bit more difficult. Both the internal and external version of the DCT have the same functionality with the only real difference being where it is mounted. Some prefer the external since it is easier to swap out and doesn’t require opening the case to install, while others will do just about anything to eliminate yet another box with a wall wart from their setup. We will warn you if you’re leaning towards the internal though, it is pretty big and puts off some heat. So to accommodate the internal version you’re going to need a decent size case as well as an internal USB port and free floppy power plug.

**UPDATE**
Microsoft now offers Digital Cable Advisor utility that will enable just about any computer to use a Digital Cable Tuner. If that utility fails then you might still want to use OSFRLoader, otherwise this next section is depreciated.

Prepping the system
We suggest you run through these instructions before calling your cable provider to come out and install the CableCARD, otherwise you might run into problems and then you won’t be ready when they come.

The first step is to get by the requirement that has been holding us back up until now, which is that Windows will only allow you to use a DCT if your BIOS has the required OSFR table. Although unlikely, it is possible that your BIOS has the required table so first thing you want to do is download the OCUR BIOS Check Utility and find out.

Using the utility is really easy. Unzip it and double click on OCURCHECK.bat and you’ll probably see the failure message “The ACPI table ‘OSFR’ is not present” like in the example above. If you are lucky enough to see a successful message, then skip the next section where we explain how to make any BIOS OCUR ready.

How to make any BIOS OCUR ready **this section is depreciated, see the update above**
Recently an ingenious member of The Green Button forum figured out how to make any BIOS appear to be OCUR compliant by modifying an old utility known as VistaLoader. Basically all it does is load Grub4Dos before Windows boots and change the memory where the BIOS information is stored with the “correct” information. The cool thing about this is that it is relatively easy to uninstall and makes no changes to the actual BIOS like a firmware update would — be warned that if you have a Dell, you’ll have to reactivate Windows after installing this utility. It also appears it would be resilient to any types of checks Microsoft or CableLabs might attempt to use to prevent this from working in the future. All you have to do is download the utility from here and unzip it. Then open up a Command Prompt as an Administrator in the directory where you extracted it and execute install sony and reboot. After your system boots back up, rerun OCURCHECK.bat again and now it should display “The PC BIOS is OCUR compliant” like the next image.

Installing the hardware
Now that your BIOS is up to snuff, it’s time to install the tuner. If you have an external tuner, just shut down your PC, plug the power and USB in. If you have an internal you’ll have to open up the case and plug it into a free PCI Express port — which is nothing more than a mount — then plug in the USB and power.

Setup the tuner in Windows
After you boot the computer one of the LEDs on the DCT should be solid green and if you go into device manager you should see a device called ATI TV Wonder OpenCable Receiver listed under Network — notice it’s not listed with the rest of your TV cards.

Now go to My Computer and then Network, and you should see the ATI DCT listed with the rest of the devices on your network — if not, then you probably have a problem with UPNP, and yes UPNP is required to make this work.

Double click on the ATI DCT and your default browser will open displaying the DCT’s configuration web page. On the top right of the screen will be the firmware version, you’ll want to make sure it’s running the latest — at the time of this writing that is 1.19.12 but the latest can usually be found on Windows update.

After you download the firmware updater and run the installer you’ll eventually be presented with the firmware installer UI. It should find the DCT and allow you verify once again that it needs to be updated. If so, hit start and let it run.

After it completes successfully, go back to the configuration web page and check the firmware and finally launch Media Center.

Configuring Media Center
When you launch Windows Media Center for the first time you should be prompted to install the a tuner, if not go to Settings>TV>TV Signal>Set Up TV Signal, and follow the wizard. Along with your other tuners, the ATI DCT should be detected like in the screen shot below — this image is from Windows 7, Vista looks a little different.

Next up you’ll see the Digital Cable Tuner product activation screen. You’ll need a valid product ID to get past here, but you can try the generic key we found online: 263DJ-2Y9YT-6X9G6-W28DB-697TF. (You won’t need this key if you ran the new Digital Cable Advisor tool)

With any luck it should activate successfully and since you’ll be running through this setup without a CableCARD the first time, you’re going to see the following warning in the screen shot below. Don’t worry, choose “Continue without a CableCARD” and you can still use the tuner as a clear QAM tuner until your CableCARD install. This way you know everything is going to work before the installer arrives.

Now after the wizard is complete you should see your channel lineup and be able to watch clear QAM channels. When the installer comes with the CableCARD, after plugging it in and ensuring the other LED lights up green, go back to the web page to the “Card” tab and click on the “Host ID Screen” link to get the host info — this link is only there if a CableCARD is inserted — this will display the details the installer needs to activate the CableCARD with the cable head-end. After the cable installer says the card is paired, go to the “IP Service” page to see if the “Auth Status” is “CP Auth Received.” You can also get this information from Media Center, but we find it easier to just use the web page and then go back to Media Center and re-run TV Setup when we know the CableCARD is all set. Either way you should probably make the installer wait until after the setup wizard is complete so you can test as many channels as possible. You’d hate to let ‘em go only to find out you have a signal strength issue or aren’t subscribed to all the channels you expect.

When things go wrong
Troubleshooting CableCARD problems is well beyond the scope of this how to. If you can’t even get the DCT installed or activated you’re best best is going to be The Green Button thread where the utility was published. But odds are those steps will go smoothly and you’ll have problems with your provider or the tuner itself. If that is the case, then you’ll want to head over to The Custom Integrators show where they dedicated five episodes (7-11) to CableCARD tuners and how they work. Good luck and be sure to let us know how it goes.

A special thanks to Utah, Dan and Derek for all the help on this post!
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• For a general-purpose system, choose a μATX motherboard, unless you
need the additional expansion slots available on a full ATX model. For a
small system, use a μATX motherboard. For a really small system, use a
Mini-ITX motherboard. (Note that Mini-ITX motherboards often cost significantly
more than μATX models with similar features and quality, so use
Mini-ITX only if you really need it.)
• For an Intel-based system, choose a Socket LGA 1156 or a Socket LGA 1366
motherboard that is compatible with your choice of processor. Avoid
Socket 775 (Socket T) motherboards, which are obsolescent. For an AMDbased
system, choose a Socket AM3 motherboard if it is compatible with
your chosen processor; otherwise, choose a hybrid Socket AM2+/AM3
model. Avoid Socket AM2 and Socket AM2/AM2+ models.
Recommended motherboard brands:
For systems with Intel processors, we recommend Intel (http://www.intel.com),
GIGABYTE (http://www.gigabyte-usa.com), and ASUS (http://usa.asus.com)
motherboards. For AMD processors, we prefer GIGABYTE and ASUS. All three
of these companies offer top-notch motherboards, in everything from basic
vanilla units to feature-laden, high-performance boards. Intel tends to be a
bit “stodgier” than the other two, emphasizing stability over performance and
features, but the differences are small in any case. (If it’s any indication, most of
our own systems use Intel motherboards.)
If cost is a major consideration, we recommend ASRock (http://www.asrock.
com) motherboards. Originally spun off from ASUS in 2002 to compete with
low-end motherboard makers, ASRock has developed a reputation for inexpensive
motherboards with very good quality, stability, and feature sets. Recently,
ASRock has introduced higher-end motherboards as well.

 
Memory
The only real decisions are how much memory to install, what size and type of
modules to use, and what brand to buy. Consider the following factors when
choosing memory modules (DIMMs):
• For budget systems, install no less than 512 MB per core, and at least 1 GB
total. (For a single-core budget system, install 1 GB or more; for a dual-core
system, 1 GB or more; for a triple-core budget system, 1.5 GB or more; and
for a quad-core budget system, 2 GB or more.) For mainstream systems, install
2 GB or 4 GB, with a minimum of 512 MB/thread and 1 GB per core. For
performance systems, workstations, and multimedia/graphics systems, install
4 GB or more, with a minimum of 512 MB/thread and 1 GB per core.
If you’re running a 64-bit operating system, increase these recommended
amounts by 50% to 100%.
• Memory manufacturers such as Crucial (http://www.crucial.com), Kingston
(http://www.kingston.com), Corsair (http://www.corsairmemory.com), and
Mushkin (http://www.mushkin.com) provide online memory configurators
that allow you to enter the brand and model of your motherboard and
return a list of compatible memory modules. Before you buy memory, use
these configurators to make sure the memory you order is compatible
with your particular motherboard.
• For motherboards that use 240-pin DDR2 memory, buy DDR2 memory
modules of at least the speed required by your motherboard/processor
combination. DDR2 memory is available in PC2 3200, PC2 4200, PC2 5300,
PC2 6400, and PC2 8000 variants. Choose the fastest modules that do
not sell at a significant price premium over slower modules. Once again,
choose modules that support fast CAS latency timings only if they cost
little or no more than modules with standard timings.
• For higher performance, install DIMMs in matched pairs or triplets to enable
dual- or triple-channel memory operation 

   Install CableCard tuner:

• Installing  CableCard tuner
• Ceton’s InfiniTV 4 quad-tuner PC card see www.cetoncorp.com, this remains hard to find
• this gives great experience with CableCARD, in contrast with the first time.
• this setup does not provide 2-way communication, no guide, no on-demand tv
• Microsoft media center makes up for the above.
• InfiniTV 4 occupies a single PCI express slot.
• get and install the CableCard provided by CATV provider(Comcast).
• get the M-Card version, because the S-Card only supports one stream.
• then your HTPC can record 4 simultaneous streams, including encrypted premium channels like HBO, ShowTime.
• plug in the CableCARD, install the drivers, windows media center did most of the work of activating the card, then activate the card by calling Comcast.

Network – Ability to View TV in other rooms

• With a network, and the right equipment, you can watch recorded tv in other rooms.
• Products like InfiniTV must transcribe the cable company’s “conditional access” DRM to windows media DRM
• Programs flagged as “copy freely” can be archived to a server and played back on most any device.
• Programs flagged as “copy once” can be played back only on the device that originally recorded them.
•  However,  you can play “copy once” content on any Windows Media Center Device(Extender for Windows Media Center) connected to that PC via the network.
• unfortunately, the list of Windows Media center has schrunk to just one product: the XBOX 360.
• you cannot stream “copy once” content to othr PCs on your network.
• experience: we were able to stream recorded TV from media center to any PC on our network
• experience: we were only to stream live tv to our xbox 360.

How to Build the Ultimate Gaming PC, Step by Step? Click here

This post below will detail:

• Parts and components needed for HTPC at the center of the home theator
• How to capture and record four different HDTV streams using a single cable card device

• What the best networking products and techniques are and how they can be used to serve TV, movies, and music within your home network.
• Set up system to watch 3d programming and blue ray movies in the most cenematic style possible.
• how  to best use windows built in media center packge to access netflx, hulu, and blu-ray content.
• from maximumpc.com

Video Card

• GeForce GT 240 is one of the few GPU’s that Oficially support Blu-ray 3D.
• Zotac GT 240  has the distinction of being fanless, which is perfect for our pc
• have to run the zotac card in an x8 PCI-E 2.0 slot, as the passive heatsinks for the cpu and the gpu could not co-exist.
• because the x8 PCI-E 2.0 is the equivalent of x16 PCI-E 1.0, and because unlikely to run out of bandwith, we ran it in the 2nd slot.

Hard Drive

• It is quiet and cool, uses less power than high RPM drives, we chose a Western Digital Caviar Green 2TB Green drive to provide storage

Power Supply

• there are external power-brick drives that are silent, but limited to 200 watts
• chose standard atx psu.
• fortunately, fan noise not an issue with SilverStones  NightJar ST40.
• used Grandia’s 3 12cm fans to keep the psu cool.
• NightJar capable of 400 watts, its pricey but it makes our 3D HTPC ultra quiet
• NightJar is rated by Silverstone to run a GeForce GTX 470

MotherBoard/Ram

• used MicroATX  – give a wealth of options for add in cards w/o sacrificing any features
• MSI’s 890-GX offers support for 140 watt chips(including hexa-cores), USB 3, SATA 6
• also two physical x16 PCI-E 2.0 slots, Single x1 PCI-E 1.0 and a legacy PCI slot.
• Ram is 4gb OCZ DDR3/1333, will be more than enough

OS

• 64 bit Windows 7 Ultimate, but professional is really enough.
• Window 7 Media Center is really feature rich.

Chassis

Silverstone’s Grandia GD05 has three nearly silent 12 cm fans and can accomodate an 11 inch Radion HD 5970

TV tuner

• got Comcast multi-stream CableCARD
• plugged above into Ceton’s  InfiniTV 4 Digital Cable Tuner
• able to record 4 different channels at the same time

Sound Card 

• AuzenTech X-Fi Home Theator
• delivers best in class audio, and high definition blu-ray soundtacks

CPU and Cooler

• sub -2GHx don’t have the spunk
• AMD’s Athlin II X64 640e seems tpo be made for htpc use.
• this processor rated at 45 watts, which makes it cool running
• paired with a silverstone NT01-E cooler, which can run in passive mode with up to 65-watt processors.
• since our Anthlon II is 45 watts, we have plenty of overhead.

Optical Drive

• for blu-ray 3D, need min read speed of 2x.
• Samsung SH-BOH3, it even burns DVD at 16x

 XFX Radeon hd 5770 -  XFX ATI Radeon HD 5770 single-slot graphics card

The radeon 5770 has not been updated past AMD’s original DX11 architecture.

This card fully  supports AMD’s Eyefinity feature, four total video video attachments.

• a pair of dual link DVI ports
• DisplayPort connector
• HDMI port
• this one is dual slot design
• the XFX ATI Radeon HD 5770 single-slot graphics card has all of the features that ensure reliability over the life of the card—including a reduced risk of exploding capacitors—a longer life expectancy, and better overclocking performance.
• Dual slot is priced about 130, the single slot is priced more.
• need a 450w PSU
• fully supports HDMI multichannel-audio pass-through
• lifetime warranty
• http://www.xfxforce.com/
• xfx hd 6850 better, but more expensive 

a1747c Computer specs

Figure 1: The P5LP-LE (Leonite2) motherboard

Show all | Hide all
Motherboard description
Manufacturer’s motherboard name: ASUS P5LP-LE
HP/Compaq name: Leonite2-GL8E
Form Factor
Micro-ATX: 24.4 cm (9.6 inches) x 24.4 cm (9.6 inches)
Chipset
Northbridge: Intel 945G
Southbridge: ICH7DH
Front-side bus speed
533 MHz, 800 MHz, 1066 MHz (processor dependent)
Processor upgrade information
Socket type: 775
Motherboard supports the following processor upgrades:
Core 2 Duo E6x00 (Conroe) up to E6700
Core 2 Duo E4x00 (Conroe) up to E4400
Pentium E2000 series (Conroe) up to E2160
Pentium 4 6×1 series (Cedar Mill) up to 661 (3.6 GHz)
Celeron (Conroe) up to 440
Celeron D 3xx series (Cedar Mill) up to 365 (3.6 GHz)
Memory upgrade information
Dual channel memory architecture
Four 240-pin DDR2 DIMM sockets
Supported DIMM types:
PC2-3200 (400 MHz)
PC2-4200 (533 MHz)
PC2-5300 (667 MHz)
non-ECC memory only, unbuffered
Maximum HP/Compaq approved memory is 4 GB*
32 bit PCs cannot address a full 4.0 GB of memory.
Video
Integrated graphics using Intel GMA 950
*Integrated video is not available if a graphics card is installed.
Integrated graphics using Intel GMA 950
Up to 256MB (with 512MB or more PC memory)
Also supports PCI Express x16 graphics cards*
Audio
Integrated Realtek ALC888S Audio
*Integrated audio is not available if a sound card is installed.
High Definition 7.1 channel audio
Audio CODEC: Realtek ALC888S
Network
LAN: 10-Base-T
Interface: Integrated into motherboard
Technology: Intel 82562V
Data transfer speeds: up to 10/100Mb/s
Transmission standards:10-Base-T Ethernet
Expansion Slots
One PCI Express x16
One PCI Express x1
Two PCI
I/O Ports
Back I/O ports
Figure 2: Back I/O panel

1 – PS/2 mouse (green)
2 – Coaxial SPDIF Out
3 – Coaxial SPDIF In
4 – Video Graphics Adapter
5 – IEEE 1394a
6 – RJ-45 Network (LAN)
7 – Audio: Center/Subwoofer (yellow orange)
8 – Audio: Rear Speaker Out (black)
9 – Audio: Line In (light blue)
10 – Audio: Line Out (lime)
11 – Audio: Microphone (pink)
12 – Side Speaker Out (gray)
13 – USB 2.0: 4
14 – PS/2 keyboard (purple)
Internal Connectors
One 24-pin ATX power connector
One 4-pin ATX power connector
One PATA connector
Four SATA connectors
One floppy drive connector
Two 12v fan connector for CPU fan and PC fan
One 9-pin header for power button, reset button, power LED, and HDD LED
One SPDIF-Audio output connector
One line input connector (interrupts line input on back panel, Vista capable, requires matching front audio jack module)
One 9-pin audio header for headphone-out and microphone-in (yellow, Vista capable, requires matching front audio jack module)
Two USB 2.0 connectors supporting 4 additional USB 2.0 ports. NOTE: Some USB ports may not be available externally for customer use. For more information, see model specifications.
One IEEE 1394a header
One Intel high-definition Audio/Modem Link (not used by HP)
One jumper for resetting BIOS settings
One jumper to disable BIOS password checking
Motherboard layout
Figure 3: layout

Clearing the BIOS settings
CAUTION:  Do not change any jumper setting while the computer is on. Damage to the motherboard can result.

This motherboard has jumper to clear the Real Time Clock (RTC) RAM in CMOS. In the default (normal) position the jumper is on pins 2-3.
Figure 4: Jumper location

Clearing CMOS
To clear CMOS, follow these steps:
To clear CMOS settings, temporarily set jumper CLRTC to pins 1-2.

Wait 5-10 seconds and then return the jumper to pins 2-3.
When you startup the PC you will need to enter BIOS setup to reset any custom BIOS settings.
Clearing the BIOS password
The BIOS password is used to protect BIOS settings from unwanted changes. If the BIOS password has been forgotten, disable password checking to enter setup and change or erase the password.
To erase the BIOS password follow these steps:
Turn OFF the computer and unplug the power cord.
Locate the jumper labeled CLPWD. The jumper is found at the top edge of the motherboard, near the DIMM sockets. In the default (normal) position the jumper is on pins 2-3.

Move the jumper on jumper CLPWD to pins 1-2 to clear password.

Plug the power cord and turn ON the computer.
Hold down the F10 key during the startup process and enter BIOS setup to change or clear the password.
After changing or clearing the BIOS passwords, remember to reset the jumper to pins 2-3.

Dimential fund advisors invest invest in value and small cap stocks. These can be bought only from advisors, under stock Ticker DGEIX. Do it yourself can use the following tickers to match the us/foreign developed/emerging markets as they exist today:
Fundemental Rated powershares FTSI RAFI Portfolios:
2 for the US: PRF, PRFZ (covering large and small cap stocks)
2 for the foreign developed markets: PXF, PDN (Also covering large and small cap stocks)
1 for the emerging markets PXH

Low Beta Stocks
the Classic is Berkshare Hathaway – BRKB
There is no single low beta fund, but we can buy low beta global sector funds.
iShares Global Consumer Staples – KXI
iShares Global Health Care – IXJ
iShares Global Utilities – JXI

How much low beta stocks?
Lets say: 50% US
40% Foreign Developed
10 % Emerging
all with a small and value company tilt,
then reserving 5-10 % of the equity total for low beta stocks should give us slightly higher risk adjusted returns.

Bonds:
To Lower Portfolio Volitility use short duration, high quality bonds.

iShares barclays: SHY – 1-3 ear treasury bond ETF with 0.13 % expense ratio

Inflation Protected bonds payout are adjusted according to the consumer price index.

iShares Barklays TIPs fund: TIP , good especially for tax defered accounts.

Total Bond Market Index Fund:  least overpriced on many 401-k plans. good for tax defered accounts.

Risk Balanced Portfolio

Idea one is to use bonds to put a lid on volitility and get return from stocks.

Idea two is to get return from bonds from fixed income securities in its own right.

This brings up 4 types of bonds and expose to four risk factors:

1. Maturity risk (treasury bonds)

2. Credit risk(corporate bonds)

3. Inflation risk(inflation indexed bonds)

4. Currency risk(unhedged foreigh soverign bonds).

Risk Balanced portfolio

Short term bonds – 35%

US Aggregate Bond Index 35%

Short Term Foreign Bonds 15%

inflation Protected Bonds  15%

the above is short in maturity and high in credit quality, as the other alternative above, but is more diversified and has higher projected returns.

With the above we could adjust the 60/40 mix to 55/45. Not really reccomending this particular portfolio but this is one implementation of this dream of a more efficient portfolio.

A Better 60/40?

US Small/Value tilt  25%

Low beta 3%

Foreign Small/Value 23%

Emerging Market 4%

US bond index 16%

Foreign Bonds 6%

Inflation Protected bonds 7%

Corporate bonds 16%

130/30 funds – all bad, casually looked at CSM from credit suisse – a MAYBE

Commodities

Commodities are useful part of portfolio.

Index Funds:
1.  PowerShares DB Commodity Index Tracking fund – DBC  – This tracks the Deutsche Bank Commodity index. – fact it Outweighs the energy segment at 55%. Its perfomance relies heavily on the price of oil.  It gives a k1 for tax purposes. Better in IRA or other tax qualified.

2.  iPath Dow Jones – AIG Commody Index Total Return ETN – DJP 0.75

Expense Ratio, paces the Dow Jones-UBS Commodity Index, which Tracks 19 Different commodities and caps the weighting  to each sector, so it is more diversified. it  Generates 1099 income rather than 1099 income. This is ETN and introduces counterparty risk.

ELements Rogers international Commidity ETN – ticker RJI, 0.75 expense ratio.  this avoices K1. This gives the broadist exposure to 35 different commodities according to their importance to international commerce.

3. DFA Commodity Strategy Portfolio – Ticker DCMSX. – only fo those who use advisors that can buy this DFA.

4. Others:

a)Pimco PCRAX is one of serveral classes from pimco. This also tracks dow jones ubs commodity index, and puts the collateral into a pimco actively managed commodity fund.

b) can get above cheaper by buying Harbor Commodity real return fund – HACMX, which has the same manager.

Real Estate  == REITS

Two types of reats – Equity and mortgage reits

Mortgage reits are better thought of as credit(bond like) instruments. they are more like long term bonds, pay slightly more interest, and  that get repaid as soon as interest rates are falling.

Below we deal with equity reits. These have features: a)equity structure, real assets that should rise with inflation, cash flow like a bond, returns are leveraged, like a stock or bond, lose value when interest rates rise, gain when they fall(other things being equal). Leveraged – managers borrow 40 to 50 percent to buy real estate.

examples – vanguard real estate index VGSIX – really wend down in 2008, but were better over years 2000 – 2010

Reats have 2 hedges against inflation. Rent and property.  Good income, and with inflation hedge.  buy a reit index fund.

Can’t beat vanguards MSCI Reit index etf VNQ and the international reit vnqi.

Hedge Funds

Authors of the book only own this hedge fund – Rangely Capital

“Classic Hedge Funds” meet Mutual Funds.

10 Hedge Fund Strategies –

1. Long/Short

2. Market Neutral

3. Dedicated Short Bias, they maintain a net short position. Resky long term bet against the stock market.

4. Global Macro == 35000 view of the market,  soros british sterling deval, and carry trade.

5. Managed Futures == trend following, up or down

Arbitrage Plays

6.  Convertible Arbitrage – Convertible Bonds , conventional bonds with out of the money stock. If the company’s stock price rises above the preset price. it becomes a stock. Interest is below the going rate for the bond.

Can buy a basket of convertible bonds in a mutual fund from vanguard, VCVSX.  When the company issues a convertable bond, the hedge fund buys the bond and then shorts the stock of the company. If the stock falls in price,  the hedge fund makes money from the short position, still getting coupon. Also bond prices usually fall less than stock because bond holders are in better position in case of bankruptcy.  If the stock rises in price, the short position is self hedged by the stock option. THe manager can cover his bases further by using futures contracts to hedge the interest rate risk and credit default swaps to hedge the default rate. WHat is left is a pure play of the value of the sum of the parts(bond plus stock option) and the price he played for the convertible bond, which came out as a discount because of the relative illuiquidity.

Above is not fail safe. the value of the bond could fall quicker than the stock. Or the price of the bond could have been bid up to high in the 1st place. If the manager does a lot of these trades, diversification pushes the odds in his favor.

7. Fixed Income arbitrage

Long term Capital Management exploded in 1998. Ran by John Meriwether and Nobel winners Myron Scholes, and Robert Merton, threatened to take down the global economy. They did this big time. The generic manager can buy lower credit bonds and then short treasuries of the same maturation and pocket the difference. – eventually rates converge to a syzygy ( a harmonious alignment). if the corporate is downgraded money could be lost.  this is big money needed to reap small profits(picking up nickels in front of a steam roller).

8. Event Driven. Make money on anounced mergers, DIstressed securities,…  dangerouus for individual, but merger has little upside once they are announced, but ususally don’t go all the way to the buyout price becuase on doubt, but most go through. so lose money on one of many successes.

DIstressed securities are usually bonds that have been downgraded from investment grade to junk, many pention funds MUST sell at that point.

9. Emerging Markets. Not really arbitrage, but need to put somewhere.

Why is emerging market hedge fund different from emerging market regular fund. well – they can buy bonds, commodities, currencies, real estate,stocks, illiquid holdings, what ever in the emerging markets.

10. Multi-strategy.

Employ some combination of the above.

Chapter 11: One fund solutions

Hedge Fund Mutual Funds

There are two paths that the mutual funds follow:

1. Hedge funds Replicants – equal top down approach.

Mathmatically replicate the hedfund Indexs

2.  Bottom up approach.  Persueing the actual hedge fund approach, wrapped up in a mutial fund.

Naming Names:

Hedge fund replicants:

using other mfs, stocks, bonds, currencies, math wizards William Fung, David Hsieh, Harry Kat, Helder Paloaro, Andrew Low, jasmina hasanhodzic.

Replication Hedge Funds:
a)ING Alternative Bets — IABAX is a straight fFund research Index (HFRI), which is an equally weighted composite of more than 2000 hedge funds. It uses derivatives in various  liquid financial markets such as equities, fidex income, currencies, and commodies to track the index.

b) Natixis ASC Global Alternatives (GAFAX) – brain child of Andres Low, head of engineering at MIT. This one brings active risk management – manages volitility to an 8 % target. – adding either cash or leverage to keep at this level. makes long investments in 26 futures, and forward positions, to capture the hedge fund betas from the Lipper TAS database of 3000 hedge funds.

General:  Most funds have different share classes available:
Front end, level, back-end,no-loads. There are investor and institutional classes. go to morningstar for detailed information. Advistors can sometimes get you into institutional share at less than normal initial purchase, (or not). many fund have short term redemption fees. Some have 12-b1 fees(marketing). Fees will really be high because the research and mgmt costs are high. Sometimes the actual hedge fund manages the mutual fund also.

b) Multi-Strategy funds,  – the 1st two rely on the replication approach:

IQ Alpha Hedge Strategy – IQHIX -This is amazing fund, maybe what we are looking for.  this uses etf to replicate each of the 6 hedge fund strategies – long/short, macro, market nuetral,event-driven, emerging market, fixed income arbitrage, plus about 25% leverage. Correlation has been 0.7 since late 2007 regrding s&P 500.

IQ Hedge multi-strategy tracker. QIA, same strategy as above but without leverage. This is an ETF, anyone can buy without paying a sales load, operates with low expenses.

MultiStrategy funds not tied to an index:

These funds operate on their own, not tied to indices,

a) iShares Diversified Alternatives Trust. – ALT,  does fixed income arbitrage, managed futures, and global macro hedge fund strategies. it buys futres contracts, does not buy etfs.

b) Natisix ASG Diversifying strategies ticker– DSFAX, this uses a half-dozen strategies, including macroeconomic, fixed income, and trend models, and probably overweights what is working well.  When the funds Correlation rises above 0.25, they short the stock market component until the correlation falls back. This is significantly lower than correlation to the market than that of the hedge funds above. volitility is managed to 12 %.

This fund manages two characteristics that are important to investors, Correlation to the market, and volitility. This is not just plain index fund, and it has a pressure valve that lets off steam if things get too hot.

All the above are availabele with one fund solutions that let you add the hedge fund.

ONE MORE AVENUE, Roll your Own Hedge Fund.

(note see book by ben & phil called yes you can supercharge your portfolio, then see updates to the recommended stocks in this chapter).

See location  2164 at end of chapter 11 in kindle reader.

Chapter 12. Hedge Funds Pigs in Mutual Fund Blankets. Several selections and some picks afterwards.

Long/Short Funds. These have not done much different from regular mutual funds. They rely on individual picks, market timing. This area has the most funds, with around 50 right now.

TFS Market Neutal ticker TFSMX acts like a long/short fund even tough it calls itself
market Neutral, thats why it is in long/short category.
It has a correlation of 0.48 with the s&P 500 from 2007 to 2010.
if it were really market neutral that correlation would be closer to 0.
this fund has offbeat strategy of investing heavily in closed-end funds, insider buying,
and market order imbalances. This is closed to new investors right now,
but advisors with current clients can get new ones in.

Roveco Long/Short Equity ticker BPLEX has managed to do 20% better than the S&P 500 at roughly the same level of risk.
(currently closed to new investors). They go long or short
based on valuation, business fundementals, the momentum of fundementals.
Recent outstanding performance is du to loading up on unloved financial stocks in 2009.
that 20% is unlikely to continue.
Wasatch-1st Source Long/Short ticker FMSLX brings a stock picking approach to
mid and large cap universe using fundemental and technical analysis to identifiy companies are over or under valued.

Highland Long Short Equity Ticker HEOAX. has a broad mandate. They are active stock Pickers, go long & short, like
everyone else, but they have been better lately.

Highland Long/Short Equity HEOAX has a broad mandate
They are active stock pickers, looking to buy under valued
and short over values, they have done it better than others
lately.

QUaker Akros ABsolute Return AARFX has only
12 million in assets, which is usually too small,since the
threshold for a self sustaining fund is 50 million.
On the other hand, it is easy to buy, – no transaction fund
at many brokerages, it has a 4 star on morning star, generates higher
taxable income than most so it is good for ira. Owner appears to
be a value investor who makes his long and short calls based
on company fundementals.

Market Neutral Equity FundsThese evenly balance their long and short holdings.
These should have a zero correlation with stock market and a beta of zero. These funds should have
a small positive return and a small standard deviation.
These are mostly benchmarked to the 3 month treasury bills.
that is about as conservative as you can get.

Names

DWS Disciplined market neutral – DDMIX

This fund (ddmix)  ranks Russel  1000 by price, earnings, groth, and market sentiment. Makes offsetting trades to maintain a market neutral posture while controlling for the impact of diffent market sectors(transportation, utilities, financial,…

JPMorgan Reearch Market Neutral JMNAX, is quantitavely managed to be market, industry, capitakization, and style neutral,

Highbridge Statistical Market Neutral Slect – HSKAX - long & short against mid and lage cap equities, to deliver market neutral returns,

Managers AMG global alternatives — MGAAX  long/short againg global marktes stock, bond, currrency

Hussman Strategic growth HSGFX

ProShares RAFI Long?Short RALS – this has no track record, it goes long the 20 % of us stocks that are cheapest in valuation, and shorrt 20 % that appear to be the most over valued. In effect betting on Value over growth

Dedicated short Bias funds
Betting against the market rain or shine!

3 Funds  BEARX,  Grizzly SHort (Ticker?), and Comstock Capital Value (DRCVX)

these have not done well,

GLOBAL MACRO

These do basicly anything they like, anywhere.
1. Powershares DB G10 Currency Harvest. Ticker  (DBV) passively executes the carry trade. It goes long and short 3 month currency futures to capturs the spread amont hte different developed markets.

2. Market Field MFLDX – Equities and long exposure. Does not hedge as much as others, down in 2008, really up 31 % in 2009.

3. Eaton Vance Global Macro Absolute return. (EAGMX). Employs the macro  toolkit in the bond market, with reasonable expenses and good performance. This fund is good for IRA. THis fund is close but Eaton Vance also has EGRAX which is similar.

4. Mars Hill Global Relative Value - is an ETF ticker GRV, does not track any index. THis is long and short a particular countires ETFs.   More like a long/short except in different countries.

5. IQ Hedge Macro Tracker – MCRO – Targets the Dow Jones Credit Suisse Global Macro an emeging markets indices weighted 50/50. They track the past hedge fund performance?

MANAGED FUTURES  – Managed Futures were up between 12/18 % in 2008 when commodities and stocks fell 37 %. This category has been up more than 10%  during the worse 5 quarters since 1985.  That plus their low correlation to stocks, bond, and commodoties, puts this one your short list!!

1) Direxion Commodity Trends Strategy – DXCTX - tracks the performance of Standard and poors DIversified trends Commodoity trends indicator. This offeres exposure to 16 commodity markets in 6 sectors and holds them long or short accoring to price trends in relation to 7 month moving average, rebalanced monthly.

2) Elements S&P CTI – ticker LSC is an ETC, If you are looking for managed futures that track the S&P iversified Trends commodity index, you get it cheaper by using the Elements &P CTI Exchange traded note(LSC) with it 0.75 percent expense ratio. good for taxable account. Downside is counterpart risk with its isuer Swedish Export Credit Corp.

3) Rydex CTI Managed futures Strategy, ticker RYMTX tracks the &P Diversified Trands Indicator is just like the Commody trend indicator used in the above 2, but half the index is weighted to financial futures, primarily currencies from developed markets and emerging markets, as well as US TBonds, T-Notes. It is more expensive than those offerings but is more diversified.

4) Arrow managed futures trend fund MFTFX, Tracks Trader Vic’s index to capture price trends in commodities, currencies, interest rates,

5) Mutiual Hedge Frontier Legens  MHFAX, approach is to do due dilligence and select 5 diversified fund advisors to run the money.

6) ASG Managed funds strategy AMFAXm build its own trend following formuls, to capture managed futures beta,

7. AQR Managed Futures – uses propritorey  trend following.

Event Driven -

FixeD Income Arbitrage

1)Forward long/short Crdit Analysis FLSRX invst munis, shorts treasury’s

2) WAARX,

ALSO  INDEX COMPARES SOMTIEMES IS djcs FIXED INCOME ARBITRAGE INDEX.

Merger Abitrage

arbfx – LOOKS FOR MERGER ARBITRAGE

merger fund , ticker MERFX, looks for merger arbitrage

Gabelli ABC fund – ticker GABCX, good with lowest espense in the group.

IQ Merger arbitrage etf ticker MNA,  buys into all announced mergers,  low volume , low assets, uses index and hated ultra indexs to short,

Emerging Markets

MCRO – sort of combo of global macro and emerging markets,   – THere are no mutual funds that execute emerging markets, so they may be same as vanguar VWO, iSHares EEM,  or they could be using soverigh debt PCY of jpmorgan USE emergin bond EMB

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Adding Alternative Investments to your portfolio.