The WSJ profiles hedge fund manager David Tepper of Appaloosa, whose fund was up 120% in 2009.
Tepper's success this year is a testament not only to his gutsy bets, but to successful positioning. After the annoying experience of having been unduly influenced by his investors not to short the Nasdaq in 2000, he resolved more or less to ignore his LPs. By the time I got to Wall Street a few years later, Appaloosa was well-known as a fund that made bold bets, which would produce very great years but also some very stressful years.
If even I knew this, then Appaloosa's investor base knew it too, which reduced the fund's asset/liability mismatch in terms of risk tolerance. A bold portfolio required bold capital providers, and over time that is what the fund has attracted,
Ultimately, this "everyone on the same page" state allowed Tepper to make his 2009 moves relatively unmolested (Alan Shealy of Boise does not count as a molester).
Comments