The Words of the Tiger â€“ Julian Robertson Speaks
November 19, 2010
Julian H. Robertson, Jr., Catawba College trustee, Salisbury native, philanthropist, and chairman and chief executive officer of Tiger Management, L.L.C., came back to his hometown on Thursday, Nov. 18. During his visit, he stopped at Catawba College to have a conversation with Catawba College and Livingstone College business students and their faculty, along with several dozen members of the Rowan-Salisbury community.
From initial capital of eight million dollars, Robertson built Tiger Management into the world's largest hedge fund with capital of more than $23 billion. Robertson also trained and developed a generation of "Tiger Cubs," a group of analysts and portfolio managers who have become some of today's most successful hedge fund managers. Today, he maintains Tiger to manage his own investments and to seed independent hedge funds run by high-achieving, young managers.
In 1997, Robertson gave $18 million to his hometown of Salisbury, creating the Blanche and Julian Robertson Family Foundation. Its mission is to make grants to nonprofit organizations within Salisbury and Rowan County. Over its 13 years of operation, the Foundation has approved over $23 million in grants.
From the stage in Hedrick Little Theatre of the Robertson College-Community Center on campus, Robertson talked to those in the audience, noting that philanthropy is "really a very rewarding thing" and creates "an interesting problem of figuring out places to put your money." He also answered questions asked by students. Following are some examples of that exchange:
Q - What led you to create Tiger Management?
A – "I had been in the investment business a long time. I wasn't satisfied with what I was accomplishing. I thought the hedge system was the way to go. I went out on my own at a pretty senior age to found Tiger Management."
Q – What's your biggest fear?
A – "I've had some serious reversals lately. My wife died last summer and that dwarfs my fears. I worry about the situation our country it getting into now. We aren't willing to sacrifice like we did in years gone by. Some of the tactics such as printing money to pay our bills is not the way to go."
Q – Some say there is a lack of capital in the market. What is the best way to get liquidity back in the market?
A – "I don't agree with that. There is a lot of money in the markets now. Currency and cash are kind of reviled in a way, yet bonds are reaching new highs and people are bidding up commodities. People have a fundamental mistrust of print money and so they are matriculating to those types of things."
Q – What characteristics do you look for in Tiger Cubs?
A – "I look for honesty, integrity and smarts and a very competitive nature. Good managers don't like to lose. Almost all of our managers have some desire to change the world for the better."
Q – What advice would you give to recent graduates entering the work force?
A – "Don't despair; know how tough it is now to get jobs. I've tried to get a number of people jobs and it's been extremely difficult. I think America desperately needs scientists, not more people like me. When I got out of school, we all went into advertising and no one wanted to go into finance – that's reversed now. I never made a mistake giving a young person too much responsibility; I made a lot of mistakes when I tried to teach an old dog new tricks."
Q – What obstacles did you have to overcome when you first started your business?
A – "I had a love of business and that's almost necessary to be successful in anything. You're going to make mistakes, but you always have to have the courage to come back after mistakes – the courage to keep pitching."
Q – What do you think about outsourcing?
A – "I believe in outsourcing. When someone can do the job cheaper and better than you, you outsource. That's going to be more and more a part of it as we become one world."
Q – What do you attribute your success to?
A – "I was very much encouraged by the people I worked with. Young people should get credit for what I did."
Q – What advice would you give students who are graduating looking for a job?
A – "Try to get a good fit between your abilities and your interests. I used to pitch baseball and I would really have liked to pitch baseball, but fortunately I did not."
Q – You served in the U.S. Navy, what do you think about young people entering the armed forces?
A – "You're asking the wrong man. That [the U.S. Navy] was the thing that kept me from being in the gutter. I had no responsibilities and Jim Whitton (of Salisbury) will tell you some people didn't even think I would be able to get a job."
Q – What do you think about investing in the stock market?
A – "It's the way to begin to amass capital and to make yourself into a reasonably philanthropic person or just to provide for your offspring."
Q – How can you differentiate yourself from other applicants in the job market?
A – "A good resume that includes things that aren't standard on there is really good. It will give the guy something to talk to you about at the very least. Relax and try to enjoy the interview and eventually you'll hit on something where you're mutually pleased with each other."
Q – Why have you invested in New Zealand?
A – "New Zealand has been a love affair with me and my wife, and my sons, and now my grandchildren coming along. It's a very special little corner of this earth. The first thing I bought down there was a sheep farm, but it [the property] had the most beautiful beaches with waterfalls on it. There, you can buy a national park for the price of a modest New York apartment."
Q – What should be the tax rate, the dividend tax and the estate tax?
A – "I thought it was a disgrace that America didn't have an inheritance tax, but I've found one better – [we need] a fat or obesity tax on sugars and fats. I think we've got to start paying our bills rather than printing money – that has not been a good way to pay our bills. This is a plague upon us – sorry, you've gotten me lose on it."