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We all have our ups and downs. There are no absolute ways to do things.
Whatever and however we do things, there are going to be moments when it
works, and moments when it doesn't. That is why it is so important to
know why we want to be in trading, and why we want to do things the way
we go about to do them. It is only then that when things go bad that we
then know what to do and remain in control.
After Richard Dennis earlier, Victor Niederhoffer and John Meriwhether
lately, now Julian Robertson, as the following story shows, even the
monuments of the trading world are subject to this rule.
Good reading,
Gwenn
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From: "GWENAEL GAUTIER, CAISSE DES DEPOTS ET" <GGAUTIER@xxxxxxxxxxxxx>
Subject: (BN ) Tiger Investors Say Firm to Announce Close by Friday
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Tiger Investors Say Firm to Announce Close by Friday (Update5)
3/30/0 0:0 (New York)
Tiger Investors Say Firm to Announce Close by Friday (Update5)
(Adds Robertson's rank among wealthiest in U.S. in last
section, changes dateline.)
New York, March 30 (Bloomberg) -- Julian Robertson, for more
than two decades one of the most successful stock pickers on Wall
Street, will shut down his Tiger Management LLC hedge fund group
after its assets dropped by $16 billion in the past 18 months.
Tiger will announce before Friday its plans to close down
the firm, said investors in the fund who asked not to be named.
``Tiger doesn't comment on rumors,'' said the fund's spokesman.
The decision to close what grew to be the world's second
largest hedge fund blemishes a remarkable run for Robertson. His
returns averaged 26 percent a year between 1980, when he founded
the firm with $8 million, and 1999, making Tiger among the best
performing hedge funds.
``He's one of the greatest investors in history,'' said Alex
Shogren, chief executive of HedgeFund.net, a Web site for hedge
fund investors and managers. ``It's too bad it had to end on a
bad run, but his style of investing hasn't worked out lately.''
Robertson, 67, saw his assets under management dwindle to $6
billion from $22 billion in August 1998 as many of the cheap
stocks he bought, such as US Airways Group Inc. and Carnival
Corp., tumbled. Investors responded by withdrawing $5 billion
from the firm since the fourth quarter of 1998.
One reason Tiger may have closed now was that the firm
wasn't generating cash to pay employees. That's because the firm
won't collect fees until it recoups its accumulated losses over
the past two years. With the firm's investments down 4 percent in
1998, 19 percent in 1999 and a 13 percent this year, Robertson
would have to earn 48 percent before collecting fees.
Value Investor
Robertson made his reputation as a ``value investor,''
betting on stocks that traded at low prices relative to their
earnings. His largest holding was US Airways, which fetched less
than 10 times annual earnings per share when he began buying
shares in 1996, or half the average multiple for the stocks in
the Standard & Poor's 500 Index at the time. That investment
swelled to amount to almost one quarter of the airline. In the
last 12 months US Airways tumbled 48.8 percent.
Until recently, Tiger was the second largest hedge fund in
the world, behind George Soros' Soros Fund Management. After
deftly avoiding big losses when Russia defaulted in mid-1998,
things started to go wrong in September of that year as Robertson
started losing money, first on a wrong-way bet against the yen.
Loses in 1999 came mostly from bad stock picks.
``This is a performance business, and we don't deserve to
have anyone's money if we don't perform,'' said Phil Duff, the
chief operating officer, in an interview in February. He didn't
return phone calls today.
In February, Robertson and other employees accounted for a
little more than 25 percent of assets in the hedge fund, a
partnership for wealthy individuals and institutions.
The firm has 37 analysts who focus on 10 industry groups,
currencies and bonds, and commodities. Paying those people and
some new hires who had been guaranteed salaries became more
difficult as performance lagged.
Some of the firm's new employees include Tom Kurlak, a
former Merrill Lynch & Co. semiconductor analyst, and Paul
Brooke, a health care analyst who came from Morgan Stanley Dean
Witter & Co.
North Carolina Roots
Some of Tiger's investment team might join Maverick Capital,
the hedge fund run by Lee Ainslie, a former Tiger managing
director, said hedge fund investors.
Robertson hails from Salisbury, North Carolina, where he
grew up the son of a textile executive. He has described himself
as a late bloomer, with less-than-stellar grades in high school
and college at the University of North Carolina at Chapel Hill.
Robertson is worth $1.7 billion, ranked No. 139 in the U.S.,
according to Forbes magazine.
In 1957, when he was 25, Robertson joined Kidder, Peabody &
Co. as a sales trainee. By the time he was 42, Robertson had
become one of the firm's top brokers and been named head of
Webster Management, the firm's money management group.
Four years later, feeling constrained by his job, Robertson
left Kidder, taking his wife and family to New Zealand, where he
planned to write a novel.
Robertson came to hate the solitary life of a writer,
however, so he stuck the manuscript in a drawer, and returned
about a year later to the U.S. to start Tiger.
--Katherine Burton in the New York newsroom (212) 318-2335/tm/ajk
Story illustration: To graph shares of U.S. Airways, see:
{U US <Equity> GP}
Company news:
3085Z US <Equity>
U US <Equity>
Category news:
NI HEDGE
NI FIN
NI SCR
NI TRN
NI USINVEST
NI AIR
NI FND
NI BNK
Regional news:
NI NY
NI US
NI JAPAN
NI EUROP
NI UK
NI ASIA
NI ASIAX
NI KOREA
-0- (BN ) Mar/30/2000 0:00
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