Julian Robertson's Interview With The Financial Times ~ market folly

Monday, October 19, 2009

Julian Robertson's Interview With The Financial Times

On his recent media escapade, Tiger Management founder and hedge fund legend Julian Robertson stopped off to chat with the Financial Times about many topics. He has been out talking a lot about his curve caps play lately where he essentially is buying puts on long-term treasuries as he expects prices to fall and yields to rise. Julian again touched on this position in this interview but we want to turn the focus to other topics that he hasn't previously discussed in his other recent media appearances. Here are some notable excerpts from the Tiger Management founder and hedge fund legend's interview with the FT:

"FT: Does this conservative bent mean you’re very interested in gold right now?

JR: I’m interested in gold but not for the reason that a lot of other people are interested. First let me say, I don’t believe in gold – no one has ever, since it was ever discovered, really ever used up any gold. So all of it is here, there’s no supply and demand situation; you can’t eat it. So I think it’s a psychological store of value and I think that probably a psychiatrist is better able to analyse gold than I am. But we do have here the world’s, I think, leading authority on gold – as a matter of fact, he’s giving a talk downstairs now – and I think that’s why we seated him was because I knew he was the world’s best in this.

FT: So who is your Babe Ruth of gold?

JR: You can check him out but he’s a terrific man, and probably has as good a record as anybody in the world over the last five years. And one of the other things about gold – not just the gold bugs who, generally speaking, are some of the craziest people on the face of the globe, but people like me who suddenly get worried and people like you who are concerned about inflation and you say, show me how do I get into gold? And our man will say, Julian, you don’t get into gold now; the price of mining gold, the cost of mining gold is going down very fast and it’s very possible that the companies can make a fortune on the planning price of gold, simply because the costs are going down. So the point is, to buy gold stocks instead of gold."

You can watch the rest of Julian's interview in this 3-part video series starting with part 1 here. At the end, they also played a game of 'long/short' where Julian identified some of his favorite plays at the moment.

He said he was bullish on the following: Google, Gold Stocks, Visa, Apple, Goldman Sachs, and the Australian Dollar.

And he was bearish on the following: The US Dollar and Copper.

Thanks to the FT for another great interview. We think another key point he touches on is the notion of focusing on avoiding big losses rather than gunning for big gains. That's what can truly set a fund manager apart from others an where the true talent shines. Generating returns in a market rally is one thing, but protecting from drawdowns is an entirely different beast. We also found it curious that Robertson avoided the question as to who his 'Babe Ruth of Gold' was. Anybody out there have any ideas as to which manager he might be talking about? Robertson has seeded a bunch of managers, so we can certainly narrow down the list but just found it peculiar he wouldn't outright mention the manager's name.

Lastly, we found it intriguing that Robertson finds gold stocks more appealing than gold itself. Many other prominent hedge fund managers we cover have entered gold plays over the course of the past year so it's always good to find someone who has a bit of a different opinion regarding the precious metal. For more recent insight from hedge fund legend Julian Robertson, make sure to check out his Bloomberg interview, as well as our detailed post on his curve caps play which he has been talking about a lot recently. If you're not familiar with Robertson, then read up on him here.

Source: FT interview

blog comments powered by Disqus