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I was in attendance when my alma mater, the University of Virginia, hosted a panel discussion among 5 prominent hedge fund professionals last weekend. The Old Cabell Hall auditorium was packed.

Julian Robertson was certainly the headliner (and as a Tar Heel, the only non-Wahoo of the bunch) but they are all sharp guys.  I primarily went to brief John Griffin - who taught by far my favorite college class via teleconference from his New York fund’s office - and several other former professors on Teewinot’s progress and my career in general.

After much discussion of the obigatory topic of 2008 - financial industry malaise - they were each asked by moderator Griffin to give their best current investment idea.  Their responses:

Chris Shumway said that buying stocks that were down huge primarily based mostly on hedge fund liquidations would be a long-term winning strategy.  It’s always debatable why a stock is down, but this does make fundamental sense.

Paul Touradji layed out a thesis for shorting copper.  He believes that base metals are priced based on the “velocity of money” - a measurement that’s likely to drop as the world generally de-leverages.  Fair enough.

Julian - believe it or not - was bullish on a particular derivative bet.  He believes the interest rate yield curve will steepen significantly, and discussed “steepener swaps” as his favorite investment right now.  While chuckling, Griffin said that when Julian called to tell him about the idea, Julian joked that in his family this Christmas there would be “a steepener in every stocking.”  Us finance people are really easily entertained. 

Rick Gerson made a good point that United States corporations had really gone down the road of “professional” management — he compared it to outsourcing.  Naming a few middle eastern companies that he deemed good investments, Rick made the case that in these frontier markets there are still plenty of “owner/operator” public companies in which the people running the show retain 70-80% ownership.  He presumably has some of Blue Ridge’s money allocated to these situations.

John Griffin did not share any specific security that he liked, but ruminated that what he’d really like is the ability to “arbitrage time.”  Basically that in a world dominated by short-term thinking, it’s hard to take a stand on a company or stock because even if you’re eventually right, the losses you may sit on during the interim can cause both your investors and employees to get hot & bothered.  I hear what he’s saying, but that’s just the fact of life with public/listed company investing.  If you don’t want a daily price quote, you’ve just got to get big enough (or partner with other funds) to buy the whole company and take it private.  The practice of not marking to market is a different game.

Much thanks and respect to Mr. Griffin and the rest of the panel.  Heck, getting 2 minutes with hedge fund legend Julian Robertson on stage afterwards was in itself worth the trip!