Posted on 12/22/2009 2:46:07 PM PST by Steelfish
Fund Boss Made $7 Billion in the Panic
Gregory Zuckerman December 21, 2009
In this comeback year for investors, David Tepper may have scored one of the biggest paydays of all.
Mr. Tepper's hedge-fund firm has racked up about $7 billion of profit so far this year—with Mr. Tepper on track to earn more than $2.5 billion for himself, according to people familiar with the matter. That is among the largest one-year takes in recent years.
Behind the wins: a bet worth billions of dollars that America would avoid a repeat of the Great Depression.
Through February and March, Mr. Tepper scooped up beaten-down bank shares as many investors were running for the exits. Day after day, Mr. Tepper bought Bank of America Corp. shares, then trading below $3, and Citigroup Inc. preferred shares, when that stock was under $1. One of his investors insisted more carnage loomed. Friends who shared his bullish beliefs were wary of aping his moves amid speculation that the government was about to nationalize the big banks.
"I felt like I was alone," Mr. Tepper recalls. On some days, he says, "no one was even bidding."
The bets paid off. A resurgent market has helped Mr. Tepper's firm, Appaloosa Management, gain about 120% after the firm's fees, through early December. Thanks to those gains, Mr. Tepper, who specializes in the stocks and bonds of troubled companies, manages about $12 billion, a sum that makes Appaloosa one of the largest hedge funds in the world.
Mr. Tepper, whose office overlooks the parking lot of a Hilton hotel in Short Hills, N.J., across from an upscale mall, now is taking aim at a new target. He's purchased about $2 billion of beaten-down commercial mortgage-backed securities.
(Excerpt) Read more at finance.yahoo.com ...
It sounds like he took a chance- and won.
Hmmmm, David Tepper has better keep a sharp eye out for the shake down artists of Jackson and Sharpton. The other eye should watch for ACORN, Democrats and every other left wing organization for a shake down.
So, Americans shouldn’t be permitted to buy stock in companies?
I forgot which financial mogul of the last century saidsomething like “you believe (investing) is gambling; therefore you will not succeed at it.”
Betting belongs in Vegas!!!
I see.
And now he’s betting on commercial realestate.
This shouldn’t be allowed to happen. he should have been forced to only buy a few shares.
No one should be allowed to be THAT optomistic.
The fund purchased common stock in companies that it thought were undervalued. That’s what people are free to do in a market economy.
I did the same thing at the same time, and I’m also up well over 100% on the year. I only wish I had his billions to invest with instead of my thousands.
Any fool could see late February through March was the best investment opportunity in ten years.
“Betting belongs in Vegas.
Not so much.
Sure but would we have had to bail him out if he lost?
Many hedge funds have gotten bailouts and the Federal Reserve taking their toxic assets from them in swaps
Information is hazy on this
I have nothing against his big score but what if he lost 7 billion instead of won 7 billion?
Would we have had to bail him out same as the banksters and the Wall street pond scum?
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