Entering text into the input field will update the search result below

Keeping Perspective: Julian Robertson's Last Letter To Investors

Apr. 12, 2018 4:22 AM ET1 Comment

Growth stocks - and specifically large-cap tech stocks led by the FAANGs - have utterly crushed value stocks of late. It's been the dominant theme of the past five years. Even the first quarter of 2018, which saw Facebook (FB) engulfed in a privacy scandal, saw growth outperform value.

Sector Benchmark Qtr. Return
Large-Cap Growth S&P 500 Growth 1.58%
Large-Cap Stocks S&P 500 -1.22%
International MSCI EAFE Index -2.19%
Utilities S&P 500 Utilities -3.30%
Large-Cap Value S&P 500 Value -4.16%
Real Estate Investment Trusts S&P U.S. REIT Index -9.16%
Master Limited Partnerships Alerian MLP Index -11.22

Value stocks in general underperformed, and the cheapest of the cheap - master limited partnerships - got utterly obliterated.

So, is value investing dead?

Before you start digging its grave, consider the experience of Julian Robertson, one of the greatest money managers in history and the godfather of the modern hedge fund industry. Robertson produced an amazing track record of 32% compounded annual returns for nearly two decades in the 1980s and 1990s, crushing the S&P 500 and virtually all of his competitors. But the late 1990s tech bubble tripped him up, and he had two disappointing years in 1998 and 1999.

Facing client redemptions, Robertson opted to shut down his fund altogether. His parting words to investors are telling.

The following is Julian Robertson's final letter to his investors, dated March 30, 2000, written as he was in the process of shutting down Tiger Management:

In May of 1980, Thorpe McKenzie and I started the Tiger funds with total capital of $8.8 million. Eighteen years later, the $8.8 million had grown to $21 billion, an increase of over 259,000 percent. Our compound rate of return to partners during this period after all fees was 31.7 percent. No one had a better record.

This article was written by

Charles Lewis Sizemore, CFA is the Chief Investment Officer of Sizemore Capital Management LLC, a registered investment advisor. He has been a frequent guest on Bloomberg TV and Fox Business News, has been quoted in Barron’s Magazine, The Wall Street Journal, and The Washington Post and is a frequent contributor to Forbes Moneybuilder, GuruFocus, MarketWatch and InvestorPlace.com. Charles holds a master’s degree in Finance and Accounting from the London School of Economics in the United Kingdom and a Bachelor of Business Administration in Finance with an International Emphasis from Texas Christian University in Fort Worth, Texas, where he graduated Magna Cum Laude and as a Phi Beta Kappa scholar.

Recommended For You

Comments (1)

pendolino profile picture
Curious if you have any updates 2.5 years later? I've been digging into Tiger's history and found this post as a result. @Charles Lewis Sizemore, CFA
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.