David Tepper, founder of Appaloosa Management, was the highest earnings hedge fund manager last year. Tepper spoke at the SALT Conference and gave his thoughts on the markets, philanthropy and more. Below are some very rough notes from the famous hedge fund manager. To see our full SALT Conference coverage click here.
Get our free newletter to make sure you don’t miss any of our SALT coverage.
David Tepper
Went to Pitt undergrad, Carnegie Mellon for grad school
Worked for Eepublic Steel out of grad school in treasury dept, in Cleveland Ohio
Republic steel was going bankrupt
Took job as junk bond analyst in Boston
First outside hire for Goldman Sachs in a new Junk Bond department
Analyst for 6 months, became a trader, then became head trader of Junk bonds at Goldman
(taking principal risk at the firm)
Left the firm in 1992, and started Appaloosa
called it A bc it was front of the alphabet and got information faxed to him 10-15 minutes faster
Goldman Sachs didnt make David Tepper partner after the third round, so he said forget that
Had 4m saved up, he double 3.5M before starting Appaloosa and then raised $50M
was up 72% in first year… was then worth $20M
The hedge fund has been down 20% 3 times (including the Russian crisis in 1998), and made back high water mark within 6 months every time
Advice gotten throughout career
Bob Rubin, don’t even put yourself in a place to look like you insider traded, stay clean
I love winning the GAME! [the investment industry is a game, and most don’t understand, I think, My opinion]
Turned down a lot of money over his career, not in it to bring in assets
has given his investors back twice their money, now just playing with the houses money….he can’t lose their money now, was a huge burden off his back
The hedge fund now has $20b and about 33 people working there
Where are we now? Tough market
phrase in office, coördinated complacency (to describe the central bank)
Over-capacity in china
ECB better ease in June, really really far behind the curve!
David Tepper is more worried about deflation, than inflation
He has never lived through it
Europe keeps waiting to ease, doesn’t know how they get away with it
they should have already eased
if the ECB does its thing, we are probably ok, if not then maybe in trouble
They have to do 3 things in order to be effective
I think we are OKaaaay, time to make money, and time to not lose money
Still be long, but have cash now, time not to lose money, he is nervous & its nervous time
Nothing is that interesting right now…16x now is not that attractive
Advice: Do what you love, find your passion
