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The master ends

  The ancients said: “Those who do not seek for the world are not enough to seek for a moment; those who do not seek the overall situation are not enough to seek a field.”
  In the current highly integrated world, analyzing the current economic pattern and future investment opportunities from a global perspective is an important task for everyone. A “required course” for Chinese investors.
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  As the first Chinese media to introduce overseas well-known investors to the Mainland for roadshows, “Red Weekly” has continued to develop in the field of international reporting since 2004. In recent years, we have had conversations with Warren Buffett’s old partner Charlie Munger, well-known American investor Jim Rogers, “emerging market godfather” Mark Mapos, Wall Street’s “best Chinese fund manager” Li Shanquan and many other overseas investors. Investors from top institutions, their insights have made many domestic investors instilled in their investments.
  In order to provide domestic investors with more valuable overseas capital market information, starting this week, we will build a brand-new investor communication column – “Walking on Wall Street”.
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  Host Lin Weiping On August 23, 2022,
  Eastern Time , Julian Robertson, founder of Tiger Fund Management, known as one of the “Big Three Hedge Funds”, died at his home in New York at the age of 90.
  Robertson is a pioneer in the field of hedge funds, he founded Tiger Fund is one of Wall Street’s first hedge funds. Tiger Fund was established in the early 1980s. By 1998, its assets under management had surged from about $8.8 million to nearly $23 billion, an increase of more than 2,600 times, with a compound annual growth rate of more than 50%. During this period, after excluding various expenses, Tiger Fund created an annual compound rate of return of about 32% for investors.
  If you only look at the transcript, Robertson was the most dazzling and radiant during that period, and neither Peter Lynch nor Buffett can compare with it. However, Tiger Fund faced headwinds during the dotcom bubble, liquidated and closed in 2000, and Robertson’s asset management saga came to an end. He has since turned his time to managing his own assets, “incubating” new hedge fund managers, and philanthropy.
“Southern guy” drifts north to Wall Street

  Robertson was born in the small town of Salisbury, North Carolina, in the southern United States in 1932. In this year, Buffett was born in Omaha, the central United States, at the age of 2. These two figures with far-reaching influence on the investment community, one caught up with the “head” of the big bear market in the US stock market, and the other rode on the “tail” of the big bear market.
  Unlike Buffett, who showed a keen interest in the stock market as a teenager, Robertson was obsessed with baseball and football as a teenager, and was eager to always be No. 1 at his home baseball field, albeit not always. As for his blushing face, he wanted to drive the little friend who won the first place out of the venue.
  Robertson’s family is very wealthy, his parents are local celebrities. Its family education also follows the tradition. Mother Blanche Spencer Robertson teaches the children to respect everyone, not to judge people by money, appearance or mind, but to care for others with heart. His father, Robertson Sr., has twice enlisted in the army. He has a tough personality and likes competition. He cultivated his son’s ability to be “extremely competitive” and learned how to do charity.
  Robertson’s earliest connection to the stock market was when his father taught them how to read the earnings reports of ExxonMobil and ChevronTexaco. That may have been a trigger for his interest in the economy and later on Wall Street.
  During his studies, Robertson required himself to be first in economics courses, and “60 points long live” in other courses. Later, he served in the navy and understood the connotations of “discipline”, “responsibility” and “leadership”, and later used it in the management of the Tiger Fund.
  In 1957, 25-year-old Robertson went to Wall Street with the start-up capital given by his father. Buffett had been in business for over a year at the time. Robertson’s first job on Wall Street was as a sales apprentice at Kidd Beabody.
  At Kidd Beabody, Robertson has been in the business for 22 years. When he started out as a salesman (broker), he thought about how to sell stocks or other securities to clients and how to make money for them. This is different from the general broker’s “one-off” thinking of selling products, and it also guides him to strengthen his learning and investment capabilities. In particular, no matter whether the market goes up or down, he can make money in his own account and the accounts of colleagues and partners who help manage it. Because of this ability, he has built a solid reputation among colleagues and clients.
  Kidd Beabody continued to offer new roles to Robertson’s high-performing firm, and he eventually became the manager of Webster Management, the company’s money-management arm. It’s every wage earner’s dream job, but for Robertson, it’s the more boring it gets. In the treasury management department, he knew how to do marketing and sales, but these were not far from what he knew, and it was far from his long-cherished wish to do something independent to achieve success and success.
  When he felt that his 20-plus years of “working part-time jobs” had come to an end, Robertson had actually accumulated several investment qualities. First, he tried all the investment theories at that time, and knew which ones were good and which were bad. He even studied and participated in the “game” of fixed income and commodities. Second, he has accumulated a wide range of contacts among colleagues and customers, and his personal evaluation is very high. Third, he developed his own methods from Graham and Dodd’s theory of value investing, including interviews with company executives and comprehensive research on the company’s customers and competitors. His criteria for selecting targets are low price, low valuation and value realization potential.
  Robertson, who was tired of working for others, wanted to change careers at the time, hoping to write an excellent American novel, the content of which was “the story of a southerner who drifted to Wall Street to start a business.” For this novel, he applied for a long vacation from Kidd Bibody and left New York with his wife and two sons to go to New Zealand, but when he arrived in beautiful New Zealand, he was no longer interested in writing.
  It seemed destined that he had to go back to Wall Street, he had to go back to the investment territory he was good at, and then cast a legend.
Roaring Age

  In May 1980, the 48-year-old Robertson founded the hedge fund, Tiger Fund, with about $8.8 million under management, using a stock long-short strategy. The reason why it is called “Tiger Fund” is because Robertson and his partner couldn’t think of a favorite name. As a result, Robertson’s 7-year-old son Spencer proposed to be called “Tiger” because Spencer found out that his father was at the fund. When you can’t say someone’s name, you call them “tiger”. This suggestion was finally adopted.

  Compared with the fund’s good name, Robertson was disappointed by his ability to raise funds. Because, given his previous connections and reputation, raising $100 million seemed like a no-brainer. But Wall Street is realistic. When the new fund has no performance and strong marketing capabilities, clients will not easily take out their money.
  From Robertson’s own point of view, although the size of the fund is not large, it is a brand new beginning after all. Since Wall Street likes performance, he must create performance. Moreover, in the hedge fund industry, returns are directly proportional to performance (1% management fee + 20% performance compensation), doing well is high reward, screwing up is not rewarding. Robertson likes this model very much.
  The so-called hedge fund is measured by the absolute value of the rate of return, whether the market rises or falls, there is the possibility of making a profit. Compared with traditional long-only funds, hedge funds give fund managers a wider range of strategies and investment tools to operate funds. Among them, one of the most common strategies is long-short hedging (the stock long-short strategy is that a hedge fund manager buys some stock assets and sells another part of the stock assets to achieve the purpose of controlling risks).
  Benefiting from the accumulation of the previous 20 years, Robertson achieved a good start. In the case of the bear market of US stocks that year, Robertson achieved a substantial increase in the performance of the fund. By the end of 1980, Tiger’s return after fees was a staggering 54.9%. In 1981, the Tiger Fund returned 19.4% after deductions. In the past two years, Tiger Fund either outperformed the index by about double, or maintained double-digit growth in the decline of the index, so the performance shocked Wall Street.
  From 1982 to 1984, Tiger Fund continued to achieve high performance growth, and investors from all walks of life came.
  With the growth of assets under management, Tiger Fund Management has gradually expanded from less than 20 people to nearly 50 people. From a strategic point of view, Robertson has introduced a global macro investment strategy to the company, which is to look for profit opportunities in countries and regions around the world.
  By 1987, Robertson realized that a stock market crash might be brewing. In his letter to investors in March of that year, he said that Tiger Fund was ready for a market consolidation, because when the market consolidated, Tiger Fund would stand out.
  By August 1987, as the market turned, Robertson wrote to investors: “The tiger is roaring, not a little tiger’s roar, but a firm and powerful roar.” At that time, the Tiger Fund’s yield was 23 %above.
  But wait until October 19, when the Dow fell 22.6%, and U.S. stocks collapsed. Wait until the next trading day, when U.S. stocks plunged 30%. Faced with this decline, Wall Street panicked. The Tiger Fund was not spared either. By the end of the stock market crash, the Tiger Fund’s net worth had retreated 30% from the end of September.
Why did tigers go from roaring to “sick cats”?

  In his conclusion, Robertson reflected on a few points: Tiger Fund has too many small-cap stocks in its portfolio; Tiger Fund made the same mistake as Quantum Fund, believing that the stock market crash would start in Japan; Tiger Fund is relatively over-leveraged. After reflection, Tiger Fund reduced its leverage from about 300% at its peak to 162%, adjusted its long-short portfolio to 115% long + 50% short, and the overall risk position exposure was lower than 70%, which is lower than most pure stocks A position for a long strategy.
  But Robertson still firmly believes that the Japanese market is seriously overvalued and will collapse in the future. This is also true. By 1990, the Japanese stock market collapsed and fell into a bear market that lasted for more than 10 years.
  The 1987 stock market crash devastated Tiger Fund, with fewer than 20 people in charge of day-to-day operations. Robertson said in his letter to investors at the end of the year that since 1980, Tiger Fund’s net worth has doubled by seven times, and the retracement for the whole year of 1987 was controlled at around 10%.
  From 1988 to 1996, Robertson insisted on finding value investing opportunities in U.S. manufacturing, while shorting the Japanese stock market. Among them, he achieved great success in shorting copper. From the summer of 1994 to May 1996, Tiger Fund made a profit of US$300 million because of shorting copper. This generous sum made Robertson a world-class great fund manager.
  After 1996, the expansion of Tiger Fund accelerated. In 1996, the company managed assets of nearly 8 billion US dollars, an increase of nearly 8 times compared to the beginning of 1990. By 1999, the company had grown to nearly $23 billion under management.
  An article in an American business journal pointed out that there was a consensus on Wall Street: in the late 1980s and early 1990s, no one was better at money management than Robertson and his Tiger Fund. He’s better than Soros and better than Steinhardt when it comes to hedge funds. No one can match him when it comes to mutual funds, not even the legendary Peter Lynch. He’s even better than Warren Buffett.
  However, short-term miracles often turn out to be short-lived. That’s the case with Robertson and Tiger Fund.
  When U.S. Internet stocks entered a carnival in 1999, Robertson’s long-short strategy failed. He believed that the Internet stock bubble would inevitably collapse, and he missed the bull market in Internet stocks. He believed that there were long-term opportunities for value stocks but there was no market response. In short, the market is fighting against Robertson, and the performance of Tiger Fund fell by more than 20% that year.
  Also at a difficult time in 1999, Robertson had hoped to sell Tiger Fund, but failed. On March 30, 2000, Robertson stated in his letter to investors that since August 1998, Tiger Fund has encountered great harm and blows, and the large number of redemptions by investors has made Tiger Fund inevitable. By the time it closed, investors had redeemed more than $7.7 billion from the fund in 19 months, more than a third of the fund’s assets.
  In the spring of 2000, the Tiger Fund officially ended. Not long after this, the Internet stock bubble burst. For example, Amazon’s market value once fell by 90%, and Nasdaq once lost 80% of its market value.
  Berkshire Hathaway’s stock fell more than 30% in a year during that wave of dotcom stocks, but Berkshire Hathaway resisted investor redemption pressure.
forever 101

  Founded Tiger Fund at the age of 48 and closed it at the age of 68. Robertson has used his brilliant 20 years to prove his investment ideas and life value. Despite his retirement from investment circles, Robertson’s office at 101 Park Avenue in New York, where he worked, did not stop there.
  Although some media said at the time of Tiger Fund’s liquidation, there can never be a single force in the hedge fund industry that can be as powerful as Robertson.
  This, Robertson may not agree. Because after the liquidation of Tiger Fund, he transformed the office at 101 Park Avenue into the “incubator” of hedge fund managers – the Hedge Fund Hotel. Former Tiger fund employees say it allows Robertson to spread costs and absorb ideas, while also investing in these new generation of fund managers.
  Perhaps the same is true. Although Robertson has “retired” for many years, his personal wealth has continued to grow. For example, his personal wealth was about 4.3 billion US dollars in 2019, 4.5 billion US dollars in 2021, and 4.8 billion US dollars this year (Forbes Rich List) . At the same time, Robertson has dozens of top global hedge funds, such as Tiger Legatus and Tiger Global; as well as several generations of outstanding fund managers, such as Chase Coleman (Chase Coleman) and Philip Lafont ( Philippe Laffont), etc., many of whom got their seed capital from Robertson.
  Robertson said in his early years, “I have invested with many fund managers. If our long-term investors need a new fund manager, I am confident that I can introduce them. Frankly, my current mode of operation is: I manage my I don’t need to manage other people’s funds. So, when I’m in New Zealand, I don’t have a conflict of interest: should I have a good holiday here, or should I be in New York Helping clients manage their money?”
  Robertson’s relationship with his followers isn’t because he’s the godfather of hedge funds, though he enjoys sharing his views on entrepreneurship, markets, and value investing. Another important connection point is that Robertson has a life-level connection with these followers, such as philanthropy. He cooperated with former colleagues and subordinates to carry out many charitable activities.
  Robertson, like his mother, has devoted much of his energy to philanthropy since Tiger Fund closed. He gave about $2 billion over his lifetime, in areas ranging from education to medical research, according to Robertson’s spokesman Fraser Seitel.
  A reporter once asked why there are so many excellent fund managers out of Tiger Fund? Robertson replied, “We have so many great people in the industry, and we have a new crop of people who are starting to gain a foothold in the market and have a great track record. Combined, this is our A saga.”
  To the outside world, the saga of 101 Park Avenue has passed, but to the creators and followers of the Tiger Fund, the saga has never passed.
  Now, Julian Robertson’s life has come to an end. His mother died in 1993, and Salisbury’s obituary at the time said: “Our city has lost an angel.” His father died in 1995, and the obituary said “a great loss to Salisbury.” The death of Robertson is not only a major loss for Salisbury, but a major loss for the global hedge fund industry. There is one less Robertson in the world, and one more legendary fund manager in heaven. (The individual stocks mentioned in this article are only for analysis, not for investment advice.