Former very successful hedge fund manager Michael Steinhardt Interview Video (07/08/2008) about the situation on the markets back in early July 2008. He was 100% right on the money. Since mid-July 2008 until now Aug 11, 2008, the US. stock market has rebounded sharply especially the financial stocks. He said correctly at that time that the biggest single factor holding back stocks is the high price of crude. He said he didn't see why the price is currently so high but that stocks are ready to move higher. "I believe the only way the market can go up in any significant way is if the price of oil goes down consequentially," he said.

He projected correctly that stock would rally due to dramatic correction in oil price which did happen afterward. Salute to Mr. Steinhardt!

Who is Michael Steinhardt?

Michael H. Steinhardt (born December 7, 1940 (1940-12-07) in Brooklyn, New York) is an American businessman and philanthropist, and was one of the first prominent hedge fund managers. He founded Steinhardt, Fine, Berkowitz & Co., a hedge fund, in 1967.

Steinhardt averaged an annualized return for his clients of 24.5%, after a 1% management fee and a "performance fee" of 15% (early in his career, later 20%) of all annual gains, realized and unrealized, nearly triple the annualized performance of the S & P 500 index over the same timeframe.

Prior to he and his partners starting their eponymous hedge fund during the summer of 1967, Steinhardt was an analyst at Loeb, Rhodes & Co. (now part of Citigroup, following a convoluted chain of mergers and spinoffs), where he followed the conglomerate industry, which included companies such as "Automatic" Sprinkler (now defunct), City Investing (likewise), and Gulf & Western (stronger than ever, as part of Viacom and Viacom's spinoff CBS). Again, according to his autobiography, he met his future wife in a car pool he organized (in early 1967). During the course of the drive to downtown NYC he mentioned the name of a company, Colorado Milling, a leading operator of grain elevators. Colorado Milling was acquired in 1968 by Great Western Sugar, a beet sugar refiner turned conglomerate which had previously acquired Shakey's, a major pizza chain (the merged company was renamed Great Western United). The future Mrs. Steinhardt, who didn't know Steinhardt at the time, mentioned Colorado Milling to her father, who invested in the company, making a substantial profit, part of which were used to buy his daughter her first fur coat.

After decades of successfully managing the fund, Steinhardt and his firm were investigated for allegedly trying to manipulate the short-term Treasury note market in the early 1990s. He personally paid 75% of $70 million in fines as part of settling the case with the Securities and Exchange Commission and Department of Justice. His firm made $600 million on the Treasury positions. Following a down 1994, Steinhardt Partners enjoyed an excellent 1995, with performance in line with its historical record. Going out on a high note, the hedge fund closed shop at the end of 1995.

In 2004, Steinhardt came out of retirement to work for Index Development Partners, Inc., now known as WisdomTree Investments. He is chairman of WisdomTree, which offers dividend and earnings-based index funds rather than traditional index funds based on market capitalization. As of August, 2007, WisdomTree had $4 billion under management, and was growing by 10% a month. During the fall of 2007 and early winter of 2007-08, Wisdom Tree's growth stagnated, as the stock market, especially the financial sector in which Wisdom Tree's dividend-based funds are overweighted, tanked. However, in recent months, as the Wisdom Tree funds tended to outperform their "bogies," asset growth resumed its earlier pace. Steinhardt is also chairman of the board at the The Steinhardt Foundation for Jewish life (formerly Jewish Life Network) and Taglit-Birthright Israel.

In 2001, Steinhardt published an autobiography: "No Bull: My Life in and out of Markets". In this book, he addressed for the first time the question of his father, Sol Frank Steinhardt, who also went by the moniker "Red McGee." "Red" Steinhardt was convicted in 1958 on two counts of buying and selling stolen jewelry, and was sentenced to serve two 5-to-10 year terms, to run consecutively, in the New York State prison system. (He did most of his time at Dannemora, a prison in upstate NY near the Canadian border, but had his sentence reduced to time served after two years due to allegations of prosecutorial misconduct.) Regarded by D.A. Frank Hogan as the number one jewelry fence in New York, "Red," according to No Bull, was an associate of noted underworld figures such as Meyer Lansky, Vincent "Jimmy Blue Eyes" Alo (incorrectly named "Aiello" in No Bull), and Albert Anastasia (No Bull wrongly refers to him as "Joey".) In No Bull, Steinhardt describes how his father bankrolled his early forays into the stock market by giving him envelopes stuffed with $10,000 in cash and sometimes much more than that. The book also suggests that Steinhardt's education at the Wharton School may have been paid for with illicit funds.

Source: Wikipedia

Famous Michael H. Steinhardt's quotes:

"If one looks back and finds those stocks that have been picked upon by shorts, that have been the subject of all this sort of talk, and find out what ultimately occurs to the price of those shares, overwhelmingly, one will find that the shorts were right."

"One dollar invested with me in 1967 would have been worth $481 on the day I closed the firm in 1995, versus $19 if it had been invested in a Standard & Poor's index fund."

"I always used fundamentals. But the fact is that often, the time frame of my investments was short-term."

"I do an enormous amount of trading, not necessarily just for profit, but also because it opens up other opportunities. I get a chance to smell a lot of things. Trading is a catalyst."

"Somehow, in a business [securities trading] so ephemeral, the notion of going home each day, for as many days as possible, having made a profit – that's what was so satisfying to me."

“A good trader has to have three things: a chronic inability to accept things at face value, to feel continuously unsettled, and to have humility.”

“I was always anxious that my fees were egregious and that I had to have the best performance in the world to justify them.”

“Now people are charging much fancier fees, and they don't make the same demands on themselves. I was always anxious that my fees were egregious and that I had to have the best performance in the world to justify them.”

Recent news on Michael H. Steinhardt:

Michael Steinhardt, chairman of Wisdomtree Investments, said shorting is often the most telling option for the economy. (17-July-2008)