Steinhardt Is `Very Sensitive' to Signs Rally May End (Update1) http://www.bloomberg.com/apps/news?pid=20601109&sid=ajbnoPDo.ClQ&refer=home By Jenny Strasburg and Ellen Braitman Feb. 15 (Bloomberg) -- Michael Steinhardt, the investment pioneer whose hedge funds returned more than 20 percent a year for almost three decades, says the bull market in U.S. stocks may be coming to an end after more than four years. ``Very few people have the ability to pick a high, and I don't think that this is the exact moment,'' Steinhardt, 66, said in an interview yesterday in New York. ``One stays long, but one becomes very sensitive. You say to yourself that the next major, major move is going the other way.'' Steinhardt said some investors were using too much debt to boost returns, and the dollar may get support from a decline in the U.S. budget deficit. Fortress Investment Group LLC's initial share sale last week, the first by a U.S. manager of private- equity and hedge funds, showed its founders were ``clever in terms of their timing,'' he said. The Dow Jones Industrial Average closed at a record high of 12,741.86 yesterday after Federal Reserve Chairman Ben S. Bernanke said inflation pressures were beginning to ease because of falling energy and commodity prices. The Standard & Poor's 500 Index, completing its best two-day advance since Sept. 26, has returned 16 percent in the past year. Bullishness on stocks is at a 10-month high, according to a Merrill Lynch & Co. survey of fund managers released yesterday. `Loosened Rules' Still, Steinhardt sees greater risks now than in the past from the potential for stocks to decline ``in a meaningful way,'' defined as by 10 percent or more. ``Coming back to the area where the excess might be, I think it's in leveraged investments,'' including commodities and real estate, he said. ``The rules related to borrowing money have loosened up extraordinarily. This is something we should remember.'' The U.S. dollar fell yesterday to the lowest against the euro in almost six weeks on Bernanke's comments. ``I would say that the overwhelming conventional wisdom is that the dollar is headed lower, and there's good reason for that view,'' Steinhardt said. ``However, the thought that has occurred to me is that we have a deficit, and the deficit is related to our foreign policy,'' he said. ``I have the feeling that soon, in the not- so-distant future, we will be out of Iraq, and the deficit- created phenomenon that is Iraq will be dramatically reduced. I think that will be an extremely positive force for the dollar.'' Exchange-Traded Funds Steinhardt was 19 when he started his Wall Street career as a securities analyst after graduating from the Wharton School of the University of Pennsylvania in 1960. In 1967, he opened New York-based Steinhardt Management Co., which produced hedge-fund returns averaging 24 percent a year for the next 28 years. He closed the firm in 1995 when it had $2.6 billion under management to pursue philanthropy and other interests. He is chairman of WisdomTree Investments Inc., a New York-based asset-management firm that offers exchange- traded funds. Recent moves by some hedge funds to sell shares publicly don't make sense, Steinhardt said. ``I wouldn't buy a hedge fund in a public market,'' he said. Shares of New York-based Fortress Investment soared almost 70 percent on Feb. 9, their first day of trading. ``I wouldn't buy Fortress,'' he said. ``Firstly, its assets go up and down in the elevator every day, and No. 2, it has a limited history of success, and No. 3, even if it had a longer history of success, it doesn't seem to me the sort of thing that has durability.'' Steinhardt School In December, Steinhardt, a trustee of New York University, and his wife, Judy, donated $10 million to NYU's Steinhardt School of Education, which was renamed in 2001 in their honor. He also sits on the boards of the University of Pennsylvania in Philadelphia; Penn's Wharton School; Brandeis University in Waltham, Massachusetts; and the Dalton School in New York City. Judy Steinhardt is a co-chairwoman of the American Friends of Israel Museum in New York and a trustee of NYU's Institute of Fine Arts. The nonprofit Jewish Life Network/Steinhardt Foundation, where Steinhardt serves as chairman, has donated $120 million since 1994 to programs in education and the arts and youth exchanges with Israel, according to foundation reports.
Lol decades of double digit returns, big deal! Did he buy the latest dip (knowing it was a dip prior to it being a dip like the ET savants are able to do), if not he must be clueless, the fact that he even mentions risk is the tell that he should be tuned out. No risk, free money, 100% blah blah blah
<i>Quote from S2007S: 27% gain at his hedge fund or on the DOW?? -------------------------------------------------------------------------------- s&p 500"</i> That's what happens when someone sits in an idling car with the garage door closed. Lucky for him he escaped those fumes alive!
hays is a damm loser. i recall many terrible calls in the late 90's early 2000. steinhard put up 20% a year in real money for 3 decades
Bring it on, correction that is! I want more volatility that's all. Am I asking to much? Ok enough of my whining.
20%+ a year, consistently, for 30 years. That is simply amazing. I'm sure it's a record SAC would be proud to own if he's in the game that long.