Tiger’s Julian Robertson bets big tech stocks will keep marching higher
Tiger Management founder Julian Robertson has thrown his weight behind large U.S. tech stocks, dismissing concerns that the sector has become too frothy after investors piled at the height of the coronavirus crisis.
The 88-year-old fund manager, considered the titan of the hedge fund world, told the Financial Times he was betting on stocks like Alphabet, Facebook and Microsoft, even though those stocks have risen between 55 and 75 percent since early last year, on top of the strong ones Increases over the past decade.
"I think they are inexpensive," he said in a rare interview. “I don't think the reviews. . . much higher than they were all the time. "
Robertson's support for the sector is significant given his refusal to accept internet stocks during the dotcom boom of the late 1990s, which was seen as a factor in his hedge fund's decision to return external capital in 2000 after two decades of strong gains .
In March of that year, when the Nasdaq Composite peaked in the dot-com era, he said that investor appetite for technology and Internet stocks would "inadvertently create a Ponzi pyramid destined to collapse." Ultimately, he was right, but not before his fund lost money in 1999, when markets soared - and investors lost patience.
Tiger Management currently holds major positions at Facebook, Google parent Alphabet, Microsoft, chip maker Micron Technology, wireless technology company Qualcomm, and ride and food delivery company Uber, according to its recent filings with the Securities and Exchange Commission on March 31 called. Robertson declined to comment on his short positions, which would benefit from falling stock prices.
Big tech companies like the so-called FAANGs - Facebook, Amazon, Apple, Netflix, and Alphabet - reached new heights during the pandemic. Social containments to combat the spread of the coronavirus have already accelerated social digitization trends and drove their stocks up.
Some investors are now warning of what they see as exaggerated valuations, and stocks of many big names have faltered several times this year. The Nasdaq Composite, home to many of America's largest tech companies, is up around 6 percent in 2021, lagging the broader S&P 500's rally of nearly 12 percent. Investors have shifted from tech companies to companies whose assets are more tied to the economic recovery.
Concurrently, concerns simmered that these stocks would be particularly vulnerable if the Federal Reserve cuts monetary stimulus as low interest rates have helped the sector rise.
Alex Robertson, the son of Julian Robertson, President and Chief Operating Officer of Tiger Management, said, "You can justify paying a slightly higher multiple because of the large growth, right?" His father agreed, "Exactly."
The couple said they see parallels between today's big tech companies and the group of "nifty 50" stocks that emerged in the 1970s and refer to the most respected blue-chip stocks of the era.
Tiger Management was founded in 1980 for around $ 8 million and grew to over $ 22 billion in the late 1990s. Robertson closed Tiger Management for outside investors in 2000, returned their capital, and has continued to invest his own money ever since.
The group, which now manages more than $ 4 billion, is also making seed investments in other hedge fund managers, including some of the nearly 200 hedge fund firms that LCH Investments says can trace their origins back to Tiger Management and as. known are the "tiger babies".
Celebrity Tiger Cubs, including Tiger Global, Coatue Management, and Maverick Capital, have taken an active role in helping public and private tech companies that traditionally valued metrics would be considered expensive - a strategy that has generated tremendous profits.
Chase Coleman's Tiger Global has raised $ 6.7 billion for a venture fund and is currently in the market to raise another $ 10 billion fund to invest in startups. Rival venture capitalists have said that Tiger Global has taken the lead in some financings by moving faster and offering higher prices than the competition.
Robertson said he saw "initial signs of" exuberance "throughout the investment world." But he added, "I don't think it's enough to overwhelm the entire market."
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