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Julian, the legendary investor.Julian Robertson Seven

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Julian, the legendary investor.Julian Robertson Seven

In addition to his record performance at Tiger, another reason Robertson is revered in the market is that he helped found a dynasty of hedge fund traders known as the “Tiger Cubs.”

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“Tiger” hedge funds

After closing the Tiger Fund, Robertson did not quit the fund industry, but made self-investment, and began to incubate seed funds to support and fund other hedge fund managers. There are still hundreds of hedge fund groups in the market whose origins can be traced back to Tiger Fund, including Tiger Legatus and Tiger Global, as well as a large number of well-known fund managers, such as Ches Coleman (Chase Coleman), Philippe Laffont (Philippe Laffont) and Lee Ainslie (Lee Ainslie), these people have created billions of dollars in profits for investors.

In an interview with the Financial Times in 2021, Robertson called news personality Bill Hwang a “good friend” who “made mistakes”.

In 2001, Bill Hwang established the Tiger Asia Fund with $23 million provided by Robertson. Around 2010, the Tiger Asia Fund managed $10 billion in funds, with an annualized rate of return exceeding 40%. At that time, the investment community praised Bill Hwang as “little Robertson”, and even thought that he was “out of blue”, and his achievements surpassed that of his master Robertson. However, he really made another mistake that Robertson made, but this time the lesson was even more severe.

In the first half of 2008, Bill Hwang was involved in an insider trading case. In 2012, he finally settled with the Securities Regulatory Commission at a price of 44 million US dollars. Subsequently, Bill Hwang closed Tiger Asia and established his own private fund “Archegos”.

Maybe Robertson chose Bill Hwang because he saw his shadow in him. This young man is tough, smart and aggressive. But what Robertson didn’t expect was that Huang had exactly the same shortcomings as him, that is, arrogance, greed, and gambling. Since having his own fund that can make independent decisions, Bill Hwang’s investment style has become more aggressive, frequently using high leverage to expand returns. Since 2012, Bill Hwang started with 200 million US dollars, and it took 9 years to reach 15 billion US dollars, which is a full 75 times.

There is an old saying in the stock market that “profit and loss come from the same source”, that is, the way you make money is also the reason why you lose money. Even though he was already worth hundreds of millions of dollars, Bill Hwang still added 5 times leverage to directly expand his total position to 80 billion US dollars.

Many people participate in transactions based on freedom and making money quickly. Many of them are relatively casual in character and lack patience, which inevitably leads to poor execution. They always want to be able to predict the evolution of the future market one step ahead. Then determine whether it is long or short, so that it is difficult to believe the theory that the market is unpredictable.

Not surprisingly, the accident just happened.

On March 23, 2021, the United States passed the “Foreign Companies Accountable Act”, which is regarded as a confrontation between China and the United States. Affected by this, Chinese stocks in the US stock market plummeted. As an Asian, Bill Hwang attaches great importance to investing in Chinese companies, and Chinese concept stocks occupy a very large share in his portfolio.

The decline in Chinese concept stocks this time exceeded everyone’s expectations. On March 24, 2021, many Chinese concept stocks fell off a cliff, and it seemed to be back in 2008 for a while. For Huang, who is 5 times leveraged, a 20% pullback is enough to be fatal, but this time many stocks fell by far more than 20%. After three consecutive days of sharp falls, Bill Hwang lost all of the $15 billion he earned in nine years, and even owed the bank billions of dollars.

Bill Hwang won a title for this – “the largest single-day loss trader in human history”. Leverage made Bill Hwang extremely rich, and leverage also made Bill Hwang’s wealth wiped out within 3 days. (to be continued)


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