Graham-Dodd Deep Dig Then Global Macro Extraction

“In his pitch, Robertson told potential investors that the way to search for value is to use fundamental research like that de- scribed by Graham and Dodd. He and his team knew of no sub- stitute for careful and comprehensive analysis of investment situations. Their research process included not only rigorous fi- nancial analysis, but interviews with senior members of a com- pany's management team and discussions with important customers, suppliers, and competitors. The aim was to under- stand how management thinks about their businesses and at the same time develop a clear understanding of the industries in which they compete. To do this, Robertson understood the two most important as- pects of reliable research: first, hire a staff with strong qualitative and quantitative skills, grounding in their specific area and rela- tionships with knowledgeable and important people in that area. Second, separate the wheat from the chaff. Tiger's size and trading activities around the globe allowed it to take advantage of "the best research available" to do just that.”

“Robertson and Tiger's global macro days began in earnest in 1985, when the firm entered into a dollar trade that yielded huge profits. The profits allowed Robertson to see first-hand that by entering this side of the business, he would be able to put great amounts of money to work and, in turn, be able to ex- tract significant profits. It was this foray into dollar trading that caused the firm to change direction from focusing solely on the equity markets and equity-based products to focusing on any- thing that it could trade.”