Julian Robertson is a hedge fund manager. He previously led the Tiger Management.
In 1998, Tiger Management had >US$20B in funds. It closed in early 2000, with much reduced funds of ~US$6B.
5 years ago, Robertson complained about irrationality in the market. Yet hedge funds tend to depend, for their existence, on the irrational exuberance of others.
To lead or suggest a comment of US$3,000-5,000 for an ounce of gold suggests that Robertson has bet up big on gold and time is fast running out for him to collect on his own hedge bets.
12 months ago, both Buffett and Soros sought to take significant positions in respect of the declining US$. They were each betting that the US$ had much, much further to fall.
12 months later, neither of their positions have been vindicated, nor have they yet explained their prospective EURO losses (if any).
History is littered with people who have sought to corner the market, or to capture an elusive position to the exclusion of all others. Examples include: 1. the Hunt Brothers in respect of silver; 2. Long-Term Capital Management, in respect of interest rates; 3. Tiger Management's own Jaguar Fund, in respect of the late 1990s (and beyond); 4. Soros (who is now very, very quiet on a number of fronts); 5. KKR in respect of junk bonds, leveraged buyouts, etc; and 6. of course, the myriad of smaller players who are all seemingly hooked in on the exercise as if it is all reflected upon the roll of a loaded dice.
Markets are increasingly more sophtisticated, stable and discerning in terms of levelling out and eradicating manipulative behaviour. The efficiency of the market in determining this, however, is ruthless as it is transparent. That's why predictability in the marketplace remains an exercise fraught more in chance, than in either history (always) repeating itself, or in definitive outcomes (always) becoming a forgone conclusion.
The US economic malaise that is representative of its fiscal and trade deficits is not replicated in terms of its corporate fiscal position which, today, is stronger than it has ever been. The last 4 years has been spent heavily in repairing otherwise imperfect balance sheets and in strengthening the fiscal bottomline. This is not, however, what Europe has done. Hence, the malaise of which Robertson complains about could well find itself breaking out in Europe rather than in the USA.
