Must have happened when the Dow was over 100 today. Looks like people are just getting out no matter what. Pain and fear..
Here's the farewell letter from Julian Robertson, the founder and manager of the Tiger funds that just closed. I think that though a lot of people (and stocks) got carried away, anyone who thinks that enthusiasm for tech stocks is destined for collapse is kidding himself. It's not a craze, it's the future.
In a letter to investors, which was posted on HedgeFund.net, Tiger founder Julian Robertson said the enthusiasm for tech stocks that hammered his funds' performance is "destined for collapse." (A Tiger spokesman didn't immediately return a phone call.)
"The current technology, Internet and telecom craze, fueled by the performance desires of investors, money managers and even financial buyers, is unwittingly creating a Ponzi pyramid destined for collapse," Robertson wrote in the letter that was on one hand defiant, and on the other wistful. "The tragedy is, however, that the only way to generate short-term performance in the current environment is to buy these stocks. That makes the process self-perpetuating until the pyramid eventually collapses under its own excess."
Yet over the long haul, "value investing remains the best course. There is just too much reward in certain mundane, Old Economy stocks to ignore," he wrote.
"The difficulty is predicting when this change will occur and in this regard I have no advantage," he added. So Robertson officially announced that he is closing Tiger.
"I have decided to return all capital to our investors, effectively bringing down the curtain on the Tiger funds," the letter says. "We have already largely liquefied the portfolio and plan to return assets as outlined in the attached plan."
The plan couldn't be immediately obtained.
Tiger was undone by Robertson's desire to stick with value stocks, such as US Airways (U:NYSE - news - boards), Niagara Mohawk (NWK:NYSE - news - boards) and Carnival (CCL:NYSE - news - boards), all of which badly underperformed the hot tech stocks. Tiger's lackluster performance, which started a couple of years ago, led investors to pull out billions of dollars.
But Robertson pointed out that during the firm's first 18 years, the compound rate of return to partners was 31.7%. "No one had a better record," he bragged. Tiger was founded in May 1980.
"For every minute of it, the good times and the bad, the victories and the defeats, I speak for myself and a multitude of Tigers past and present who thank you from the bottom of our hearts," Robertson said. |
