Michael Dever is an American businessman, futures trader, entrepreneur, and author. Dever is the founder and CEO of Brandywine Asset Management, Inc., an investment management firm founded in 1982, and he is the author of the best-selling investment book "Jackass Investing: Don't do it. Profit from it."
Business life
Dever began personal discretionary trading in 1979. He has been a trader and an investor for more than 30 years.
Dever was an early investor with Paul Tudor Jones and John W. Henry.
For over three decades, Dever has managed money for global banks, major corporations, and high-net-worth individuals, who have been attracted to his innovative investment philosophy.
Brandywine Asset Management, Inc. Dever founded Brandywine Asset Management, Inc. in 1982.
He began developing computer studies on commodity price behavior in the 1980s. The basic research and portfolio modeling concepts he uses today were developed through a major research project conducted by Brandywine from 1987 to 1991 using staff researchers and students and faculty from several universities, including the Wharton School of the University of Pennsylvania, Villanova University, and West Chester University. The purpose of these studies was to test all of the ideas that Dever had accumulated to determine if they were statistically valid.
Brandywine implements a multi-strategy approach. Brandywine's philosophy is to create a relatively hedged portfolio, not by buying hedges which cost a premium but by incorporating multiple trading strategies in the portfolio which complement each other. Brandywine follows a methodology based on "return drivers" to trade broadly diversified portfolios in the global currency, interest rate, stock index, metals, energy, and agricultural futures markets. A return driver is the core underlying reason that drives the price of a market. Each strategy must have a high significance of occurring in the future.
Brandywine's trading approach is fundamentally based yet systematically applied.
Brandywine's trading focuses solely on futures because Dever believes that futures offer the broadest diversification with one investment type. In addition, futures are traded with lower transaction costs than stocks, so an investment manager can get much greater diversification with a relatively small number of futures markets than is possible in the stock market.
The offices of Brandywine are located in an award-winning renovated 17th century grist mill in the Brandywine Valley, outside of Philadelphia, Pennsylvania. The mill renovation project, which includes an actual reconstructed operating mill waterwheel, was designed by Thomas Dever, principal of Dever Architects and brother of Michael. The project was awarded a 1997 Building Excellence Award by the Philadelphia Business Journal.
Venture Development
Dever is an internet entrepreneur. He founded Mind Drivers LLC, a venture development company which operates technology businesses, in 2000. He spent most of the decade of the 2000s founding and operating technology-related businesses.
Dever founded Spree.com, an early e-commerce site, in 1996. He served as president and CEO. Spree.com pioneered the use of viral and affiliate marketing to grow into the world's 7th most-trafficked e-commerce company.
Trading Philosophy
Dever's trading philosophy is based on broad strategy and market diversification.
Dever is a pioneer in risk management and is credited with the development of one of the earliest comprehensive risk management models. In the 1980s, he developed a statistically based money management and risk allocation model. The purpose of the model was to allocate weightings equally to the strategies and markets within a portfolio in order to maintain balance of returns from all strategy-market combinations. The intent of this portfolio allocation model is to ensure that no single market or strategy-market combination dominates the portfolio over an extended period of time. Since that time, elements of this trading model have become popularized as risk parity investing.
True diversification can only be achieved by diversifying across return drivers and trading strategies, not asset classes. Most investors are taught to build a portfolio based on asset classes (such as stocks and bonds) and to hold the positions for the long term. According to Dever, this approach is the equivalent of gambling.