Chapter 88 Tiger Fund

Unlike most hedge funds that rely on the analysis reports of international investment banks, Tiger Fund has a team of star analysts comparable to international investment banks. of the best. Naturally, their salaries are also much higher than those of their peers.

  After getting the news that Quantum Fund was raising funds aggressively, these sharp-sighted analysts clearly noticed that this famous Wall Street peer was about to make a big move. After several consecutive overnight studies, they focused on the European monetary system, and even analyzed the specific currency types clearly.

  Tiger Fund is a hedge fund established in 1980. Its famous work was short-selling during the stock market crash in 1987, and it obtained unattainable investment returns. In addition to the flagship fund Tiger Fund, they also have three other funds named after the jaguar, puma, and puma. From the names of these funds, it can be seen that these hedge funds owned by Julian Robertson are aggressive and aggressive.

The initial Tiger Fund used stock investment as its main investment strategy, but in the mid-to-late 1980s, due to the frequent launch of financial derivatives, Tiger Fund began to get involved in derivatives markets such as government bonds, currencies, interest rates, and related futures and options. Be a typical "macro" hedge fund.

Like Quantum Fund, Tiger Fund is also the darling of the market. Analysts poached from major national investment banks such as Goodman and Stanley carefully analyze the market conditions of each stock, making Tiger Fund’s income far exceed that of its peers. In this case, Tiger Fund became the third Wall Street hedge fund with more than one billion dollars in management funds, the other two being Quantum Fund and Steinhardt's fund.

  Julian Robertson has always been brooding over the performance announced by Quantum Fund, and he is obsessed with the comparison with Soros. In his heart, he has always been jealous that Soros can be in the public spotlight. This allowed him to start a strong expansion in the operation of the fund scale.

However, as the size of the fund expanded, there were too few opportunities to maintain a fund worth billions of dollars in the U.S. stock market. Therefore, Tiger Fund began to invest in foreign capital markets, and at the same time redoubled its efforts in the currency market. high yield.

  In this case, foreign exchange and bonds have become the focus of Tiger Fund's investment.

At this time, he should have inspected companies in Germany with his good friend and employee John Griffin. After the fall of the Berlin Wall, their funds bought a large number of German securities, and they have been in Germany since the second year market investigation. However, after hearing the news about the Quantum Fund, the two rushed back to their office in the south of Central Park in New York without stopping.

   "What exactly will they do?" Robertson looked at his foreign exchange trader, a young man named Barry Bossano. This person is also from one of the two most famous investment banks in the world, and he is an expert in the foreign exchange market.

"According to my guess, it may be possible to sell the pound, buy the mark, and then earn the difference. If possible, I will suppress the pound by a few percentage points, so that I can make a profit, but..." Barry gushed, But at the end, he stopped suddenly.

   "And then?" Everyone looked at him, waiting for the next step.

  "The Bank of England will definitely make a move. You must know that they have foreign exchange reserves of more than 40 billion U.S. dollars. Basically, as long as the Bank of England makes a move, the amount of money from the Quantum Fund is nothing at all." Barry's words surprised everyone. Yes, if the pound depreciates, the Bank of England is bound to intervene, so there is basically no room for arbitrage.

"No, he will naturally consider this." Robertson shook his head, "Those arbitrage funds will definitely not miss such an opportunity, and I believe they will not ignore it. We can't just think about only the Quantum Fund. A lot of people started thinking the same way.”

   "In addition to those funds that specialize in finding opportunities in the foreign exchange market, we also need to count the foreign exchange trading departments of banks and the financial departments of multinational companies. Just say our colleagues, I believe that people like Paul Jones will not stand idly by."

The Paul Jones he mentioned is another master of capital operations on Wall Street. He founded the Tudor Investment Company named after him. He is also a giant of Wall Street hedge funds. Compared with Quantum Fund, Tiger Fund, etc. Not inferior.

   "So, doesn't the UK have to face a lot of financial attacks?" John suddenly realized.

   "However, there is still one point. I believe that the major central banks in Europe will not be helpless. Otherwise, if the pound withdraws from the European monetary system, I believe it will be a major blow to the future euro." Barry said firmly.

Yes, Europe wants to form a monetary union, and the charter stipulates that the central banks of each country are obliged to maintain their currency exchange rates within the specified upper and lower limits. If one currency is attacked, then another strong currency is bound to do the same. If the corresponding adjustments are made, this is equivalent to fighting the central banks of two countries.

  In this monetary system, the role played by the German central bank is basically equivalent to that of the European central bank. It is obviously impossible to attack the German mark and the British pound at the same time.

"There should be no danger of the depreciation of the mark in the short term. After all, they have maintained a very reasonable inflation rate for so many years. If we buy the mark as part of hedging risks, and then sell the pound, it may Profit to a certain extent." Seeing that everyone was silent, Barry suddenly expressed another idea. This idea has been formed in his mind for a long time, and in his opinion, this is the safest method.

   "If the Deutsche Mark also announces the depreciation, wouldn't our assets suffer a double loss?" An analyst named Tom Macaulay quickly expressed his thoughts. Yes, most of their current assets are in the form of U.S. dollars. If both depreciate, it will be able to offset the negative effects of the depreciation of the pound, and it will also cause heavy losses in capital led by the U.S. dollar.

   This analyst is well-known among the analysts present, almost everyone knows him. The reason why he is so famous is not because of how good his analysis performance is, but when the whole company was on vacation, everyone passed a cable bridge composed of three ropes across a sand ditch. It is erected on a cliff hundreds of feet high. These young people fixed their safety belts on the cable bridge, and then slid over one by one. As a result, this man fell down during the sliding process, and was suspended ten feet below the cable bridge.

  Everyone was frightened and stupid at the time, only Tom looked normal, laughing and bouncing on the safety line, as if he was doing something very fun. As a result, a person present discovered the abnormality of the safety line on his body. Tom had only one safety line on his body, and it was about to be unhooked. At this moment when his life was hanging by a thread, Tom Macaulay didn't know it and didn't take it seriously at all. Fortunately, he locked Macaulay's hook in the end, so that he didn't die on the spot.

  From then on, what this analyst did in that scene was deeply imprinted in the memory of everyone at that time, and later spread throughout the company.

  However, his proposal is a bit naive, and he cannot be blamed for this, because his major is not in the foreign exchange market.

   "It's impossible!" Most of the foreign exchange analysts present said in unison. They are experts who have been immersed in the foreign exchange market for many years, and they are much more profound than Tom's superficial understanding of the foreign exchange market.

   It is precisely because of the strong position of the mark in the European monetary system that the European currency unit can resist the dollar. If even the mark depreciates, this is absolutely intolerable for European economies that want to shake the strong economic position of the dollar.

   "That's it!" Robertson made a final decision.

  Most of the analysts present were aware of Robertson's character. In Robertson's view, as long as it was his judgment, he would stick to it to the end, and even if he lost half of it, he would not change his original intention.

John Griffin understands this best. In 1987, he urged Robertson to short a small machinery manufacturer based in China. They started shorting at $20. During this period, the company’s sales increased significantly during the Christmas period. The stock price rose to $25, which meant that their loss exceeded 25%, but they still believed in their judgment. Later, in 1988, the company's stock price rose to $40, and their loss was 100%. To this extent they still did not give up, and their efforts were rewarded. It has been two years since they started shorting the stock.

   And those macro traders are always trying to hedge positions and control risks, and hear Robertson yelling at them: "Hedge? That means if I am right, I will make less money!"

   Over time, in some macro transactions, these traders will be very aggressive, and sometimes they will not even take any risk control measures.

Seeing that Robertson had made up his mind, these analysts stopped arguing and began to analyze the impact on the global economy in case of a depreciation of the pound, especially on other weak currencies in the European monetary system and another important currency, the Japanese yen. Impact.

  The same scene also appeared in other corners of Wall Street. Those capitals who are extremely sensitive to foreign exchange changes feel that a storm is coming. (Thanks to the book friend TomUN for the reward again! Thanks to the book friend for the two rewards that have not yet been decided! I look forward to your active support and ask for Sanjiang tickets. The achievement of this book stems from the joint efforts of everyone!)

  (end of this chapter)