Tiger's Robertson Sees 'Doozy of a Recession'

Discussion in 'Wall St. News' started by Comanche, Oct 21, 2007.

  1. Tiger's Robertson Sees 'Doozy of a Recession'
    Topics:Interest Rates | Inflation | Ben Bernanke | Employment | Consumers | Federal Reserve | Economy (Global) | Economy (U.S.)By CNBC.com | 19 Oct 2007 | 04:22 PM ET Font size:

    Hedge fund legend Julian Robertson said Friday he expects the U.S. economy is heading for a "doozy of a recession."

    "I think we are going to have a doozy of a recession," Robertson told CNBC's Erin Burnett. "I think the credit situation is worse than anybody realizes, and...I think we're getting little inklings of that. I don't think any of the normal indicators you would look at in the economy are really very strong. As a matter of fact, they are weak, and not really getting any better."

    Robertson, founder of the investment firm Tiger Management, also expressed some concerns about the devaluation of the dollar.

    "I think the Federal Reserve will trash the dollar until such times that there is some turn around in the economy, or until such time that they see that as self defeating," he said.

    Robertson explained that a weak dollar helps companies that export products outside the U.S.

    According to Robertson, Bernanke is doing what he can to help the economy.

    "I think in a sense, he is trapped in the sins of his forefathers," Robertson said. "I think he is doing exactly what he can do: ease ease, ease; cut, cut, cut; print, print, print."

    Robertson also discussed some of the stocks he likes, including budget airline Ryanair Holdings, with Burnett, and talked about his interest in "greener" sources of energy such as nuclear power.


    Robertson is credited with turning $8 million in start-up capital into more than $22 billion at the peak of the tech boom.
  2. Julian H Robertson Jr (1932- ) was born in Salisbury, North Carolina in the United States. Robertson founded the investment firm Tiger Management Corp. He is credited with turning $8 million in start-up capital in 1980 into over $22 billion in the late 1990s, though that was followed by a fast downward spiral that ended with the funds' closing in 2000.

    In 1993, his compensation and share of Tiger's gain exceeded $300 million. His 2003 estimated net worth was over $400 million, and in 2005 it was estimated at $900 million [1].

    The Tiger funds reached a peak of $22 billion in assets in 1998. However, because of poor stock picking and failure to exploit the technology stock craze, Robertson suffered large losses at the end of the decade. When the Standard and Poor's 500-stock index climbed 21 percent in 1999, the Tiger funds declined 19 percent.

    Tiger's largest equity holding at that time was U.S. Airways, whose troubles dragged down the value of his holdings. Such missteps ultimately led him to close his investment company in March 2000 and liquidate its remaining $6 billion in investments. Tiger earlier faced huge losses due to their trades against the yen in 1998.
  3. EVERYBODY knows there's a doozy of a recession coming, but when?.... could be years.

    The Fed will keep pumping money into the system and the market will be elevated by the inflation it causes. Only when the market concludes that the Fed has lost its ability to control psychology will the markets tank. Unfortunately, THAT tanking episode will be nearly fatal for US citizens.
  4. It makes sense to me that it will occur as the next president is taking over. Pass the buck. Personally I think we are already in the beginnig of one. Housing led the economic boom and it's already begun the slowdown, some areas deflating and some flat out popping.
  5. Doubt it. America is still financially big. There will be a long period of erosion of $USD and lifestyle before the implosion. Could easily be 20 years before the collapse. But when it comes, we will have unfortunately "shot our wad" (or should I say the Gummint and Fed will have done it for us). If we have "massive" debts now, they will be MONSTROUS by then... the $USD will officially be ass-wipe.

    Rather than altering our policies or "taking our medicine" while the problems weren't critical and we still had most of our economic health, the Powers choose the "easy" route to remaining in power. That is... inflate, go further into debt, and debase the currency. These acts postpone the day of reckoning... when maybe the current criminals will be dead and someone else has to clean up the mess.

    However, we could have a significant market correction at any time. The Fed will respond with an even higher gear of money-pump which will likely soothe the panic... this time. Next time too. And more times... until everything is spent. At some point the world markets will come to view the Fed as mere feckless counterfeiters.
  6. Erin Brunette may be hot, but this guy is a putz. There will be no recession. The us economy is supported by the global economy so it doesn' matter if the US economy slows down a little.
  7. Div_Arb


    Tiger Robertson = Tool Shed
  8. Cutten


    I'm pretty sure he means 2008.

    The key question though is not whether the US will have a recession, but what will happen to stocks in that environment. They will get hit, but how hard? If they just go to 1370 (Aug and Feb lows) then it's no big deal. If they have a proper 20% bear market, then that is much more serious.
  9. plugger


    "Erin Brunette may be hot, but this guy is a putz. There will be no recession. The us economy is supported by the global economy so it doesn' matter if the US economy slows down a little."

    You might want to do your homework on this one. Look at the U.S. economy as a percentage of world GDP. It's too large to ignore and doubtful that world economic growth won't be impacted. I think you need to look at spending at the margin, it's always demand or supply at the margin that makes the difference.
  10. Robertson is going to be right.
    #10     Oct 21, 2007