(Adds details on conference, other speakers)
By Svea Herbst-Bayliss
LAS VEGAS May 14 Billionaire hedge fund manager
David Tepper sounded a cautious message on Wednesday, telling a
ballroom packed with other managers and investors that he was
"nervous" about the stock market but that this was not the time
Billed as the star attraction at the $2.7 trillion
industry's biggest annual event, Tepper discussed economic
growth, central bank policies as well as his personal commitment
to supporting local soup kitchens and food banks in his adopted
But his take on investing in U.S. markets got the most
attention when he said: "I'm not saying go short, just don't be
too friggin' long."
Coming from the man who earned $3.5 billion to rank as the
hedge fund industry's best paid manager in 2013, this was
exactly the kind of practical advice the roughly 1,800
attendees, some of whom jetted to Vegas on private planes, came
to hear at the annual SkyBridge Alternatives Conference.
Tepper, who runs $20 billion Appaloosa Management, said he
doesn't think U.S. economic growth is as strong as it should be
and added that central banks are currently being complacent,
noting that Europe's central bank "is behind the curve."
Even as the U.S. stock market hit records earlier this week,
he worried that it was struggling to move significantly higher
now after having surged roughly 30 percent last year.
He wasn't the only one debating what central banks around
the world should and might do next from the cavernous ballrooms
in the Bellagio hotel.
Hedge fund manager Jamie Dinan, who runs $22 billion York
Capital, said he expects interest rates to stay low "longer than
Both he and Tepper worried more about deflationary pressures
than inflationary pressures where the Federal Reserve would be
compelled to put on the brakes more quickly.
Like many hedge funds around the world, York has been
investing in Europe saying that his fund has been lending to
companies by "stepping in where banks aren't going."
An early morning panel pitted economist Nouriel Roubini,
nicknamed Dr. Doom for having forecast the economic crisis,
against Peter Schiff, chief investment officer of Euro Pacific
Capital, who said the Federal Reserve's easy money policy merely
reflated asset bubbles.
As the debate grew more heated, former Fed Governor Laurence
Meyer, who was moderating the panel, loudly commented on the
strange turn, noting that the politicians were getting along
while the economists were fighting.
The discord over where markets are going and what policy
makers may do next has made for uneven trading conditions this
year. The average hedge fund manager is up only 0.9 percent,
barely flat this year, after two months of back-to-back losses,
something that revived grousing among some investors about the
industry's notoriously high fees.
All the same, investors from the Metropolitan Museum of Art,
the San Antonio Fire & Police Pension fund, Williams College,
and the Sidney E. Frank Foundation among others were still
taking meetings with hedge fund managers small and large to
gauge what the next big trade might be.
Launched at the height of the financial crisis in 2009 by
SkyBridge Capital founder Anthony Scaramucci, the so-called SALT
Conference quickly established itself as the industry's most
important conference. This year they can rub shoulders with
Valerie Jarrett, senior adviser to President Barack Obama,
former Treasury Secretary and former Harvard University
President Lawrence Summers and Hollywood actor Kevin Spacey.
In past years Scaramucci, who likes to call himself a
middle-class kid from Long Island - albeit one with a Harvard
Law degree - invited former Presidents who came. This year "we
actually got into the White House" by getting Valerie Jarrett to
come," he said.
At other moments, some of the wealthy hedge fund managers
and executives, often vilified as the "1 percent", underscored
their charitable giving.
Kenneth Langone, co-founder of Home Depot and chairman of
the trustees of New York University Medical Center, said his
dream was to raise enough money, some $600 million more, to
allow students at New York University Medical School to attend
For his part, Tepper said he donated enough money in 2008,
when his fund was suffering through double-digit losses, to make
sure food banks and soup kitchens in New Jersey, where he lives,
were always stocked.
Asked whether he believes in good karma, Tepper said: "Are
you ... kidding me? Of course I believe in that," noting that in
the five-year period since then his fund has performed better
(Reporting by Svea Herbst-Bayliss; Editing by Eric Walsh and