Legendary hedge fund manager and Tiger Management founder
Julian Robertson Jr. thinks the stock market is danger of
falling into bubble territory, telling the audience at the CNBC
Institutional Investor Delivering Alpha conference that the
market as a whole is quite high on a historical
basis and that we have very very high valuations in
The major reason is historically low interest rates, for
which Robertson blames the Federal Reserve in
the U.S. and central banks around the world. He even accused
them of colluding to bring rates down so low. There is no
real competition for money other than art and real
estate, added Robertson.
He also said it doesnt help that President Trump seems
to support a weak dollar, which also holds down rates.
Robertson says the markets valuation will change once
rates start to go up and bonds become more attractive to
Robertson is one of the hedge fund industrys pioneers
and was one of just a handful of managers running more than $1
billion in the 1980s. He shut down his hedge funds in 2000
after missing the dot-com bubble, which eventually burst. Since
then he has run his own money and seeded other managers
Robertson, who joked that he voted for Libertarian Party
vice presidential candidate William Weld for president
rather than his dopester running mate, presidential
candidate Gary Johnson stressed the need for tax reform,
which would lower corporate tax rates and coax companies to
bring their huge sums of overseas profits back to the U.S.
Best known for his ability to pick longs and shorts on
individual stocks, Robertson said he continues to like several
of the internet and technology stocks that have driven market
indexes in recent years. They include Apple, Facebook, and
Alphabet, the parent company of Google.
In fact, he stressed that despite their recent price surges
and widespread popularity, these stocks are still not expensive
to buy on traditional valuation measures. They are great
growth companies, he told the audience. But they
are priced cheaper than they ever would have been in the
60s, 70s or 80s. I dont think people
He said that although he may have trimmed his position in
Facebook, for example, he declared himself a long-term investor
in the stock. Robertson virtually gushed over Netflix, noting
it is run by really good people, and got a laugh
when he asked, Does anyone not love Netflix? Its
like saying you do not like Santa Claus.
Robertson, who has long owned a vacation home in New
Zealand, also seemed excited about cruise stocks such as Royal
Caribbean Cruises and Norwegian Cruise Line, after noticing
people of his generation taking cruises.
He also still likes Air Canada, which has tripled in price
since he got into the stock. Yet it still trades for the same
price-to-earnings multiple, five times earnings. I have
too much [of the stock] but I cant make myself
sell, he admitted.
On the other hand, he conceded he does not get the Bitcoin
phenomenon, joking that he hoped there was a panel later in the
day so he could learn more.
On a more serious note, he conceded something he told Alpha
several years ago: He regrets getting angry when the first wave
of key people left Tiger to start their own firms, rather than
embracing their entrepreneurial goals and taking a seeding
position in their funds.
His biggest piece of advice for people considering getting
into the hedge fund business: Make sure you really like it, and
perhaps take an aptitude test to see which profession is the
Get in to what you love and really want to do and can
do, he said.