What the heck are u doin up this late? Tomorrow's a school day! Ha!
December 3, 2000
So What if Technology Stocks Are Plunging? Bowman Still Finding a Way to Cash In
By DANNY HAKIM
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On average, Bowman Capital is about 45 percent exposed to the market. That means that if it had, say, $1 million in assets, it might buy $725,000 worth of securities and sell short $275,000 of securities, leaving it with a net long exposure of $450,000, or 45 percent of its assets. But by early November, the firm had bought and sold short securities in roughly equal proportions.
What will it take to get Bowman to reverse course and start buying again?
"We need to see an uptick in demand, both in U.S. consumers and in Europe, and that is hard to see coming into the first quarter of the year, which is the seasonally softest quarter. March could be a disaster," Mr. Bowman said, predicting that the first three months of next year will be "an unmitigated disaster."
"On the bullish side, cash levels over all are higher than I can remember across mutual funds and hedge funds, and sentiment is quite negative," he continued. "It won't take much to fuel a rally. That said, it won't be a sustainable rally unless fundamentals improve. We are in an economic slowdown and we don't know where the bottom is."
Bowman's largest positions, according to the firm's regulatory filings at the end of September, are two data storage companies: one that makes software, Veritas, and one that makes hardware, EMC.
"We do like the storage sector and EMC and Veritas are two leaders," he said, adding that the firm had been invested in both companies for about two years. "Business and the technological outlook for both are quite strong."
If anything, size will be Bowman's biggest challenge now.
"A tech fund at $200 million is a much different animal when it reaches $2 billion," said Barry H. Colvin, chief operating officer of Tremont Advisors, a hedge fund industry consulting firm. "They might not be able to short as effectively. They may have once had 50 positions and now they'll have 70 to 100 and now they have to buy bigger companies.
"Any sector manager has some number at which they will be constrained under their current strategy," he added. "I would say that Bowman is at that point. Those types of changes make it harder to make money."
For his part, Mr. Bowman said he believes that his firm will distinguish itself in this year of treacherous markets.
"Most of the guys we're competing with are bull market babies," he said. "That's why we're washing them out and we'll continue to wash them out.
"I'm praying for a market crash," he added. "Find me someone else who's doing that. You make money betting against the crowd."
Mr. Bowman has been known to choreograph push-up contests among his traders — for money, of course — and has a wolverine hide draped across a partition between two desks on his trading floor. And he has hardly surrounded himself with yes men.
"The successful money managers on Wall Street are all megalomaniacs," he said. "What we have here are wolverines. Individuals that will not lose."
Teresa Romanek, 29, interviewed for a secretary's job at Tiger Management when she was in her early 20's. "Teresa walks in, a farm girl from Nebraska, and says she wants to pick stocks," Mr. Bowman recalled. "I have a secretary's job, but she wants to pick stocks."
She became one of Bowman's first partners. Ms. Romanek, for her part, has a unique view of Mr. Bowman's ascent. "I remember when he got his first Ferrari," she said. "He parks it in the fire zone, cruises into the office in Bermuda shorts — no socks, no shoes."
"He's matured since then," she added. "Now he wears shoes."
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