Buy American — And Short Japan Is Julian Robertson’s Strategy

Julian Robertson

Research

16 Pages

This paper explores Julian Robertson’s investing philosophy, focusing on contrarian stock selection, short selling, and navigating post crash markets during the late 1980s. The authors highlight Robertson’s skepticism toward Japan’s equity bubble and his belief that excessive leverage and investor optimism can distort valuations and create future instability.

Key Takeaways

Japanese Bubble Risks: Robertson cites Nippon Telephone & Telegraph trading near 250 times earnings despite only 5% to 10% annual growth, highlighting concerns around speculative excess in Japan.
Leverage Management Lessons: Tiger Management previously operated at roughly 175% long and 75% short exposure, but rapidly reduced leverage following the October 1987 market crash.
Contrarian Stock Picking: Robertson favored companies like West Fraser Timber trading near 4.5 times earnings while projecting more than $4 per share in forward annual earnings.
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