Did quirky Michael Steinhardt wake up on the wrong side of the bed?
The last time we checked in with the billionaire, he was singing to his zoo of animals in bird-squak but today on CNBC, he’s bashing Warren Buffett and the entire hedge fund industry.
Remember when Steinhardt said, “the President shot his wad with the stimulus?” That was nothing compared to this.
First, Steinhardt bashes the hedge fund industry:
[Back in the day,] we recognised if you had certain amounts of money, you started to run into problems. You didn’t have the intellectual capacity, the capacities in terms of liquidity. No one cares about that. Now it’s much more a phenomenon of the more assets you have, the more money you make.
It’s making money from the assets rather than the performance. Very different mentality. When I was doing it, there was an elitism in the hedge fund world. It ain’t an elite business anymore.
Then gives today’s hedge fund managers a back-handed compliment:
Well, when we were doing it, it was sort of an outlier industry. It was, you know, gun slingers and wise guys and people on the fringe. And now it’s centre in the middle grab as much as you can and very, very different business. Very different people. So — and in a certain sense, they’re probably smarter than we were because we weere always on the fringe.
And then he takes a real dig at them, saying they don’t even make any money anymore.
When I did it, at least in one’s mind, there was a measure that you really had to be a special money manager to run a hedge fund because you were expected to do well. You were expected to achieve positive returns no matter what the market was doing. It’s not like that today. It’s a very different world.
Then he talks up his largest position:
The largest position I have had for the last eight monghts has been short the two year treasury. I’ve made a moderate amount of money doing it. And I still have a relatively large position being short the two-year… it’s an exciting position, you know. It’s fighting the fed in the heart of their view… There’s a cliche to that, but that’s the largest position…
Then, Steinhardt bashes Buffett, WARREN Buffett! The great. Read what he said below.
Here, the biggest thing we have to worry about is how long it will take for Buffett to come down to earth where he should have been a long time ago and things like that. People like you begin to recognise his reality and get off some cloud.
[Buffett’s] reality is he is the greatest PR person of recent times and he has managed to achieve a snow job that conned virtually everyone in the press to my knowledge. And it is remarkably that he continues to do it.
So out-performing the S&P I dont know how many hundred times over the course of his portfolio doesn’t matter? Asks CNBC.
Well, I’m not sure he’s done that, and I’m sure you measured that appropriately, But what he has done and I think it’s a great measure of the man’s wonder is he gave 2.5 cents for he first 70 some off years of his life. He gave away nothing. Then in one fell swoop, he gave away almost all of his money thoughtlessly to one guy. Faultlessly. And from that moment on, he became the greatest advocate to philanthropy. And pitched all the bumbling billionaires to do the same. And many of them did.
Care to comment on Sokol gate? Asks CNBC.
It’s common American practice, sort of, but it’s not common for Buffett to get caught in that sort of thing. But it’s sort of a peculiarly ugly phenomenon, but he’s had a number of ugly penomenon.
How he treated John Gutfreund was disgusting. Because John Gutfreund was a man of integrity and he was unceremoniously thrown out of Soloman Brothers for no good reason. You know, and the phrase used was, “to save the firm.” Soloman was a big place and [he was thrown out] to placate some dumb-arse Congressman at the time. [Click here to download a paper on Solomon Brothers and read page 14 to see why John Gutfreund “resigned.”]
The one group of people that he says something nice about is the “geriatric savers:”
“Don’t you feel badly that all those geriatric savers have gotten killed over these years, and no one talks about them?”
Click below to watch the video: