Tiger Cubs

This Monday on CNBC, Julian Robertson, legendary investor and founder of notable hedge fund Tiger Management revealed some purchases he made in the market carnage last week. His buys include:
· Apple (AAPL)
· Microsoft (MSFT)
· Baidu (BIDU)
· Mastercard (MA)
· Visa (V)
· Ryan Air Holdings (RYAAY)

His argument, being a notable value player, was that these equities were trading at very favorable prices. However, at the same time, he curiously noted that he thought the US was just now entering into a period of prolonged recession (possibly 10-15 years). He thinks that this time around, consumers are broke and will be forced to cut their spending. It’s interesting when you compare his thoughts to the purchases he just made.

Robertson is well known for the 'descendants' that left Tiger Management to start their own firms. Many of Julian's "offspring”, known as Tiger Cubs in hedge fund industry, have had large positions in AAPL, BIDU, MA, and V. Notable Tiger Cubs include Lee Ainslie at Maverick Capital, Stephen Mandel at Lone Pine Capital, and John Griffin at Blue Ridge Capital.

All of them are famous for their value investment. They seek alpha through finding out the valuable companies with brilliant prospects, hold them until the values of these companies are realized by the market. But in this market circumstance, long-hold strategy is severely challenged. For instance, Lee Ainslie saw his Maverick Fund lose 19.47 percent in September, leaving the fund down 21.24 percent for the year.