Julian Robertson

Julian Robertson | Hedge Fund Notes

This post is being published as part of our Hedge Fund Investment Securities Tool.

Monday (10/13) on CNBC, Julian Robertson, legendary investor and founder of notable hedge fund Tiger Management revealed some purchases he made in the market carnage last week. His buys included:

• Apple (AAPL)
• Microsoft (MSFT)
• Baidu (BIDU)
• Mastercard (MA)
• Visa (V)
• Ryan Air Holdings (RYAAY)

His argument, being a notable value player, was that these equities were trading at very favorable prices. Yet, at the same time, he curiously noted that he thought the US was just now entering into a period of prolonged recession (possibly 10-15 years). He thinks that this time around, consumers are broke and will be forced to cut their spending. Interesting thoughts when you compare them to the purchases he just made.

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MSFT > YHOO

I did an interview today with an editor from the E-Commerce Times, who was writing up a piece on how some institutional investors including hedge funds could be hurt by an ongoing battle by Microsoft to take over Yahoo.

I never like to talk about individual securities within my hedge fund blog but this case the conversation related more to the realities of some arbitrage investment strategies than anything else. Before you build large positions within two leaders within an industry it is routine to consider any inter-firm or sector risk created by your choice of securities.

“Microsoft may have confidence that some number of institutional shareholders with a stake in Yahoo want the bid to succeed but not at a higher price,” Greg Sterling, founder of Sterling Market Intelligence, told the E-Commerce Times.

“Losing money on both sides was the risk they took while building meaningful positions within both of those securities,” he told the E-Commerce Times. “Rumors of Google or Microsoft buying Yahoo have been around for years and, if those were missed, most people in the industry sense how competitive it is and how quickly both Google and Microsoft are dishing out cash for more intellectual property and market share on the Web.”

Read the full story here.

- Richard

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Permanent Link: Institutional Investors Affected by Microsofts Bid for Yahoo

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