Wednesday, April 6, 2011

Michael Steinhardt talks Buffett, America with CNBC

Legendary hedge fund manager, Michael Steinhardt has a few things on his mind and he shares them readily in this interview with CNBC.

A few highlights from Steinhardt's chat with the CNBC crew: 

  • Hedge fund management is not the elite business it once was. Managers today content with low double digit returns, versus emphasis on true performance and 25%-40% annual returns in Steinhardt's days.  
  •  Asked if he could repeat his performance today, Michael demurs, "I don't know". He notes that magnitude of funds involved in hedge funds is much larger today. Emphasis has shifted to making money off a large asset base, as opposed to performing for your investors. 
  • You don't have to do what everyone else is doing. You do need to understand the way in which your perspective is different than the world's (your edge).

  • Steinhardt is concerned about savers (old folks and retirees) getting shafted by near zero interest rates and inflation. This is a terrible situation for Americans.

  • Buffett's carefully crafted PR persona and his philanthropy-in-one-fell-swoop approach are "worth reflecting on". 
  • Superficially, the United States is doing okay. Steinhardt looks at the inflation picture, the valuations in the stock market, and America's economic strength and its cultural standing in more depth.
Seems a lot of the comment surrounding Steinhardt's interview today focused on the Buffett side of the equation (especially given the forum; CNBC is Buffett ass-kissing central). 

While it is interesting to hear someone publicly question Buffett's "PR" persona and his philanthropic gestures,  I'm actually more interested to hear Steinhardt's take on the economy and the reality of inflation, as well as how that affects the average person in America today. 

This rich guy gets it - why do all the pointy-headed academics have such a hard time voicing these simple truths (maybe because they're paid to do the opposite)?  

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