Robertson, called by some as the “Father of Hedge Funds”, launched his firm Tiger Management in 1980 with $8 million and turned it into over $22 billion in the late 1990s. The 89-year-old billionaire was in the US Navy before working as a stockbroker for Kidder, Peabody & Co., when he and his family moved to New York.
Robertson had the best hedge fund record among his peers throughout the 1980s and 1990s. It is said that he generated a compound rate of return of 32% for his investors. During his active professional years, Robertson was considered to be the “Wizard of Wall Street”. His hedge fund, Tiger Management, became the world’s largest fund over the years.
Besides his investment record, Robertson also mentored a group of young hedge fund managers who were later known as the “Tiger Cubs.” A number of these hedge fund managers became extremely successful in their own right, including John Griffin of Blue Ridge Capital, Lee Ainslie of Maverick Capital, Andreas Halvorsen of Viking Global, and Steve Mandel of Lone Pine Capital.
Robertson used a long and short investment strategy where he “shorted” assets he believed were going to perform badly over a specific period. “For my shorts, I look for a bad management team, and a wildly overvalued company in an industry that is declining or misunderstood,” he said.
For longer term investments, he trusted his research and took an extended view on whether his choice of investment was right. “Our mandate is to find the 200 best companies in the world and invest in them, and find the 200 worst companies in the world and go short on them. If the 200 best don’t do better than the 200 worst, you should probably be in another business,” he said.
Robertson built his fund on a strategy of investing on global macro principles where he decided on the investments that would be made by the fund based on the overall direction of the economy of a country. This type of investing initially worked well for him. When he found an opportunity he believed in, he would invest heavily in it to maximise the benefit.
Let’s look at some tips that Robertson has shared in various interviews over the years on what helped him attain extraordinary success.
1. Be patient and disciplined
Robertson says research and critical analysis are very important for the success of an investment portfolio. Being patient, disciplined and yet aggressive is a rare combination of qualities that a number of investing greats have had. “Smart idea, grounded on exhaustive research, followed by a big bet. Hear a story, analyze and buy aggressively if it feels right,” he once said in an interview to a financial website.
2. Invest where competition is weak
Investors should look to invest…