Diary of a Hedgehog: Biggs Final Words on the Markets

Praise for Diary of a Hedgehog

"Few people have seen and survived the markets the way Barton Biggs had. His sophisticated and insightful writings are essential reading for both professional and amateur investors alike. The investment world has lost an icon with his recent passing, but we are all better off for having benefited from many years of thoughtful and insightful analysis."
LEON G. COOPERMAN, Chairman and Chief Executive Officer, Omega Advisors, Inc.

"Possessed by insatiable curiosity and irrepressible energy, Barton Biggs was a modern–day John Locke. Vast experiences and resolute and rigorous reflections legitimize his lifelong quest for the fountain of investment knowledge. Beyond the rarity of discovering himself along the way, Diary of a Hedgehog reminds us that seeking tangible success for its own sake is both ephemeral and unremarkable, and that only wisdom is transcendent. . . . It is the ultimate tribute to the depth of character of the man that the only change in the wording necessitated by Barton′s passing is in the first sentence, substituting the verb ′was′ as the past tense for ′is.′"
FRANK K. MARTIN, author of Speculative Contagion and A Decade of Delusion

Acknowledgments xv

Introduction xvii

Mid–2010

FDR s Fiscal Policy Redux 3

Staying Close to the Shore 11

Stay Long but Watch the Ticks 15

This Is No Time to Get Wobbly, George! 18

Make No Mistake: More QE Is Big Stuff 21

The Best and the Brightest Are Still Licking Their Wounds 25

Nobody Can See His Own Backswing 29

Fire and Ice 31

Miss at Least One Meeting a Day 38

Stick to Your Guns 43

Stage Two of a Cyclical Bull Market 45

The First Word in Analyst Is Anal 49

2011

Be Long Term but Watch the Ticks 57

Shake Well Before Using 63

Fancy Dinner and Candlelight 68

Stevie Cohen Tells a Good Story 71

The Canary in the Coal Mine? 73

Still Hanging in There 79

The Market Is a Discounting Mechanism 82

The Madness of Crowds 86

Earthquakes and Equities 89

The Riddle of Japan 93

Start Buying the Dips 101

Babbling Away 104

Swensen and Yale 107

The Atlantic Crisis 113

Turn Off Your Bloomberg and Tune Out the Babel 116

The New Face of China 119

Harvesting the Grapes of Our Own Wrath 125

No More Water, the Fire Next Time 128

The Valley of Death 130

Lest We Forget 133

If You re Going through Hell, Keep Going! 136

Begin Thinking about Buying 140

Agnostic Optimist 144

My Bet Is that the Rally Is Still a Work in Process 148

The Truth Will Set You Free but Chardonnay Isn t Bad Either 152

Investing in a World Lit Only by Fire 155

Private Equity 158

Another Tsunami 168

2012

A Tough Call 175

No Bull 179

The Elderly Kid Goes to a Tech Conference 185

Positive Change at the Margin Continues 190

Simpson Bowles Forever 194

Shake Well Before Using 198

This Business Is Getting More Complicated 201

Conclusion 207

The late Barton Biggs was as familiar a figure in the investment world as John Bogle, Warren Buffett, George Soros, or Mario Gabelli. He spent thirty years as a senior partner at Morgan Stanley, during which time he formed Morgan Stanley′s #1–ranked research department, built its investment management business, was chairman of the investment management firm, and then became the firm′s leading global strategist. After Morgan Stanley merged with Dean Witter in 1996, Biggs was a member of the five–man executive committee that ran the firm. In 2003, Biggs left Morgan Stanley and, with two other partners, formed Traxis Partners, a multibillion–dollar hedge fund. Biggs was named by Institutional Investor magazine to its "All–America Research Team" ten times, spoke frequently at forums around the globe, and appeared on CNBC and other programs on more than 300 occasions.