Tiger

"Early on in his career on the Street, Robertson learned to ap- preciate and subscribe to the old adage: once a salesman, al- ways a salesman. It is extremely hard to refute for almost anyone who has ever been in sales-for those who have been in sales on Wall Street, is next to impossible to refute. While it's obvious from all outgoing appearance that the merchandising side of the money management business was not something Robertson was interested in when he set out to launch Tiger, it is undoubtedly a skill that he used to grow the business to levels beyond even his wildest imagination. In the early days of the firm, he realized the important role communication with in- vestors and potential investors would play in the success of the firm. Thus, he was very keen on the use of performance to sell his products and to attract assets under management. The way he communicated was via letters to investors."

"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."

"Corporate stock repurchases and leveraged buyouts were eating up just under 10% percent of the total shares outstanding of American equities on an annual basis. This was equal to about 16 percent of the floating supply of stock through- out the land, which meant that if the trend continued, Tiger and its funds, along with other large investment ve- hicles, would own just about all the stock that was avail- able on the market by 1993. There was too much cash on the sidelines. Mutual funds were sitting on hordes of cash. Investors had moved $ 12 billion out of equity-based products and into fixed-income prod- ucts. And pension funds were seeing an increase in their cash positions. The money would have to be put to work eventually. TJie independent investors seemed to be all but out ofthe market. The crash had scared them away. They were waiting for it to seem safe to enter the markets again. They would eventually come back, and when they did-well, this was a plus factor. Wall Street was bored. The heydays of the 1980s were over, and pessimism and lethargy had set in. The phones had stopped ringing. There were fewer ideas being generated by brokers. The crash was still in peoples' minds. This caused people to"

"Robertson and his team were attracted to copper because their research told them that the price of the metal was too high. While their research proved that the prices had to come down, they did not know when this would happen. They just knew it would happen at some point. The folks at Tiger liked the cop- per story, it offered them an opportunity to go short a market that they knew was overpriced and was destined to correct itself like a markets eventually do. However, what they did not know was that something was amiss in the copper market. They did not know of Sumitomo's problem and that the large Japanese conglomerate's trader was artificially propping up the price of the metal."

"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."

"Most managers allocate a portion of the firm's profits to all employees based on the merit system-you contributed this to the fund's performance, you receive that. At Tiger, this was the theory behind the compensation program, but it was not neces- sarily the practice: "The whole idea was to get his approval, which meant that you would be compensated extremely well," said one former analyst. "He never would tell you that you did a good job, but rather, he would give you representation in the portfolio. This meant he liked you and respected your work, but it did not necessarily mean you would be compensated for the work. It was not that simple.""

"is absolutely ludicrous. Skill sets, not systems, is what allows one money manager to perform better than the next over time. And that is why Robertson and his colleagues at Tiger did so well re- gardless of market conditions. They understood how to search out and find value and, more importantly, understand the value. Robertson and his Tigers looked past the trends and truly saw the forest through the trees because they knew what to look for and how to find it."

"The first years after the "mini-crash" in 1981 were a struggle to make the boats profitable. Fuel expenses were high, while freight revenues were low. Aboard the "Northern Tiger" and "Northern Lynx" the contrast was evident. Diesel and other fuels sloshed in the cargo tanks. The shipping company was poorly paid to transport products they later had to buy at a high price to run the ship engines. It would certainly help if one could secure some of this fuel for free. Who discovered the method is unknown, but a clever way was found to "cheat" a bit extra during loading. The cargo inspectors measured the load by looking through a hole on the side of the tank. If the ship was tilted half a degree, the liquid came lower up on the tank wall, so the inspectors believed there was less cargo than there actually was on board. The trick was first used on a trip with "Tiger" from Antwerp to Marseille in December 1982. Its success proved addictive, and during the winter, they managed to acquire about 480 tons of fuel, saving the shipping company 900,000 kroner. The saved expenses were helpful during the lean times. The carrot for the Norwegian officers was travel checks worth 50 dollars for each ton they managed to acquire. From January 1983, "Lynx" also joined the scheme."