market folly

Tiger Management founder Julian Robertson made his rare yearly media appearance today on Bloomberg Surveillance.  Here are the highlights of the interview with the hedge fund titan:


Julian Robertson's Interview

On the hedge fund industry's overall performance:   "Hedge funds do better than the markets in bad markets because they are hedge funds. And the, the ideal for hedge fund is a vigorous active market that doesn't move a whole lot. There they can make it in both the long and short basis….In '07, hedge funds, I know ours, just blew it out….It was just unbelievable. And then in '08, we lost, you know much of that."

This isn't the first time he's touched on this as we've highlighted Robertson's thoughts on why hedge funds were underperforming.


On whether he sees the hedge fund industry as a group of top performers and everyone else or whether he bundles performance together:   "I don't think you can bundle everyone together. But I do think one of the things that's affected hedge fund performance over the last, well, really since it started really getting big around the '80s, is the increase in size of hedge funds. It was so much easier to compete with Bank Trust departments, with individual investors, with mutual funds than it is with other hedge funds. And I think the success of hedge funds in general has probably hurt the performance of individual hedge funds…Because the competition is tougher."

Robertson also noted that he's not constructive on Apple (AAPL) anymore and he likes Google (GOOG) more.  For more from the Tiger man, we've posted up notes from Robertson's talk at the Virginia Investment Symposium.


Nehal Chopra of Tiger Ratan Capital

One of the managers Robertson has seeded also joined the interview, Nehal Chopra of Tiger Ratan Capital.  While everyone will be focused on Robertson's soundbites, Chopra actually offered more points on investment process.

She focuses on change-driven opportunities.  She looks at corporate change, CEO change, transformational measures, bankruptcy emergences, and spin-offs.

Chopra's 3 things she looks at when looking for investments: a great management team (really in-depth look at the person's ability to drive results), a good business that is very cheap, and all of it is focused on change.

She says "it's a very targeted process that's repeatable ... change creates confusion.  Confusion creates dislocation of value."

Robertson again touched on how he focuses on competitiveness when looking for new managers to seed and noted Chopra has that.


Embedded below is the video of Julian Robertson's interview with Bloomberg Surveillance: