Customer Reviews

No Bull: My Life In and Out of Markets

5 star:		(12)
4 star:		(1)
3 star:		(7)
2 star:		(2)
1 star:		(7)

 

 

This hedge fund manager's investment advice can be summed up in his phrase "variant perception" which means, if you can develop an intellectually sound investment thesis at odds with the prevailing Wall Street view, you have an idea that will likely make you money. That's it. In other words, be a smart contrarian. Most of "No Bull" digresses on Judaism and Mr. Steinhart's rags-to-riches life story, which, no offense, is a snooze--he lists the rungs of his ladder of success but never gives a sense of what was driving him or how, exactly, he succeeded. I would say he chalks a lot up to innate ability, and I have no argument there. The tone of the book is that of a travelogue or the transcript of a psychoanalytical session. Or maybe just the words of an aging man trying to come to terms with the meaning of his life. I was troubled by the sentimentalization of his father, especially late in the book, when he repeats his saintly funeral eulogy, yet earlier the author made it clear that the elder Steinhardt was an absentee parent and had led a life of crime, fencing jewels, and not hesitating to attack a fellow who had violated the "laws of the streets," whatever that means. I would say he is conflicted, or given to romanticising the past. Also--how can one say that a religion is central to his own personality, as Mr. Steinhardt does, and yet admit (over and over) to atheism? It would seem to reduce the Jewish faith to a brotherhood something akin to the Rotary. The theology of this escapes me--and, to his credit, the author struggles with it. Mr. Steinhardt writes as a gruff but lovable grandfatherly type, and since he made such astounding returns, he feels entitled to explain his religious views, his democratic-centrist political opinions, and his love of animals, including one odd story in which he says he would introduce acquaintances to a bird that liked to chase people--then chortle as the unsuspecting fled in fear (I kid you not). In short, I had hoped he would shed light on his investment methodology, but like the awful Niederhoffer book (Education Of A Speculator), Mr. Steinhardt is more intent on telling us he is a man of the arts (his taste in paintings, his foray into movie-making), a sensitive fellow (who lists many of his generous charitable gifts) with vast interests (horticulture--wait, maybe that's what Judi, his wife, likes) and unlimited family love (how his family supported him in trying times). He's making the case that he's more than a man of money, and assumes the reader is interested. I am not, though his occassional show of humility does earn the book one more star than it merits as an investment text.

Unless you are interested in the life of a young Jew growing up in Brooklyn, or the name-dropping and meandering political thoughts of a megomaniac, this book is a complete waste of time and money. There is very little to no insight in this book on how Michael Steinhardt viewed or traded the markets (his Market Wizards interview has much more depth and detail).

A COMPLETE WASTE OF TIME

Michael Steinhardt tells the story of his life, but leaves out all the interesting financial stuff. He rarely tells how he made his 30%/year, and when this is mentioned there are no details.

It's always revealing to read about the life of a well-reputed money manager, and Steinhardt is no exception. This book is disarming by revealing intriguing details of Steinhardt's life and intriguing snippets of his management of one of the Street's premiere hedge funds.

Its biggest virtue is personal honesty. For example, Steinhardt concedes that he is an "unpleasant boss" and notes that it was "not his job to be nice." It is good to see him admit that he was, at times, a "tyrant" -- particularly when you contrast his honesty on this score to the syrupy recent biography of Julian Robertson, which covered up for his notorious bad temper.

My problem with this book is that it fails to deliver on its most crucial selling point, which is to discuss Steinhardt as a trader and investor. We do get snippets, but not enough. What is here in this book is good stuff, but one leaves it feeling disappointed.

Although I bought the book with the perception it would be a book on investing/trading techniques used by a well-respected investor, I liked it much more for what I did not expect to read.
The book is basically a biography, in which he describes how his father, his religion (even tough he calls himself an atheist) and his education have had an impact on his life, in private as well as in his work.
The way he writes is entertaining, and I found myself finishing the book within only a few days.

Not a book about investing. Don't buy it to improve your trading results!
Buy it for learning about the person behind stellar investment performance.

The book should be sub-titled "my life outside of the market". This book is a huge disappointment and is a waste of time and money to read. A lot of name dropping and very few insights into how he made money. What I learned was that as a fund manager who flipped over his portfolio many times a year, he generated a lot of commissions for brokerages. The direct consequence of this was that he was often the first person that they called when there was any news or stocks to buy or sell. From that he was frequently able to exploit a lot of price discrepancies between brokerages on the same stocks and also probably recieved the first dib on brokerages' latest thoughts on various stocks. Steinhardt is basically a sophisticated short term trader whose edge came from being at the nexus of wall street brokerages' information network. As for Variant Perception, it is a just a sophisticated phrase to explain that one should be able to have contrary view against the general market's view. This is easy to do if you are the first person to get Wall Street brokerages' latest thoughts and what they are about to do with certain stocks...Incidentally, Jim Cramer's wife used to work for Steinhardt and when Cramer was struggling as a fund manager, she gave him these insights to let him outperform the market.

I bought the book to gain some trading insight from one of the greatest hedge fund managers ever, but it left me wanting. About 1/2 the book deals with religious and cultural issues regarding his heritage. His most profound investment ideas had more to do with the bond market, not the stock market. He detailed one trade in Occidental Petroleum that went bad for him, but didn't go into details.

A review of this book appeared in the London edition of the Financial Times on November 14, 2001 (not, unfortunately, the New York edition):
...

A one paragraph summary:
"Steinhardt possessed opportunism without illusions, ingrained scepticism, agnosticism to being short or long, an aggressive trading mentality, relentless focus on short-term absolute profitability and an obsession with timely, legal information on stocks. In other words, he provided the model for much of Wall Street's burgeoning hedge-fund industry. His story is worth reading by a wider audience than just those who would emulate his fabulous financial success."

Michael Steinhardt came of age in Bensonhurst, Brooklyn during the mid-1950's, the glory days of the Brooklyn Dodgers. Yet he was a Giants fan, meaning that this graduate of Brooklyn's Lafayette High School, the alma mater of the immortal Sandy Koufax, cheered when Bobby Thomson hit "the shot heard `round the world" in the final game of the National League 1951 playoffs. Fortunately for Mr. Steinhardt, and for those who buy his wonderful book, neither his Bensonhurst neighbors nor Big Ralph (No. 13) Branca, the hapless Dodger pitcher who gave up Thomson's homer, heard him cheering. Otherwise, he'd be enjoying his eternal dirt nap about 50 feet below Ebbets Field Houses, constructed above the site where the Duke, Newk, Campy, Robbie, and Gil once ruled the National League.

This anecdote is revealing, for it shows the makeup of a financial (and otherwise) heavyweight who defied the conventional investment wisdom for the almost 30-year life of his investment firm, Steinhardt Partners, making a ton of money for himself and his clients in the process. Definitely not one who went with the herd, as most portfolio managers did then and do now. Ten thousand dollars invested with Steinhardt, Fine & Berkowitz (the original company) at its inception in July, 1967 would be worth $4,810,000 when Steinhardt finally closed shop at the end of 1995. Not exactly chump change, even after considering inflation.

What this book won't tell you is how to run a hedge fund. For that, there exist many shelves' worth of tomes on derivatives, portfolio hedging, and similar esoterica, complete with partial differential equations, stochastics, and the like. None make as enjoyable reading as "No Bull." Moreover, Steinhardt's investment style is best described as eclectic, using a mix of approaches depending upon underlying economic factors, issues affecting particular industries, and those influencing individual companies.

Which is all to the good. If an individual investor, even one highly sophisticated, tried to trade like Steinhardt, he'd go broke in a hurry, even if he traded on the Internet paying minimal commissions. Steinhardt, and firms like his, have access to market information individual investors only dream of, including high-powered analytics, and immediate access to Wall Street's finest analysts and investment bankers.

Nevertheless, there are numerous pearls of wisdom individual investors (as well as investment pros) can take advantage of. Foremost would be what Steinhardt calls "variant perception." In plain English, this means taking positions in companies (both on the long and short side) if your opinion differs from the market consensus, AND if you feel very strongly about that opinion. Secondly, what "Steinhardt" refers to as the Judy Steinhardt (his wife's) investment philosophy, which is selecting companies on the basis of the reception you believe their products would have in the marketplace.

The optimal advice, however, is to diversify, and the best way to do that is to find a good money manager, one who outperforms the averages in bull, bear, and flat markets, and stick with him. This is also a key part of the Judy Steinhardt investment philosophy; they've been married 33 years.

Steinhardt, like any great investment analyst, is a master at telling a story, and this is why you should buy the book. You will learn about his wiseguy father, the late Sol Steinhardt (AKA "Red McGee"), who hobnobbed with many real-life characters straight out of "The Godfather." These included Meyer Lansky, Jimmy ("Jimmy Blue Eyes") Aiello, and New York crime boss Albert Anastasia, who bought it in a barber's chair in 1957 (the elder Steinhardt was questioned by the cops in that matter, for he and Anastasia reportedly were out gambling the night before). You will learn about the real benefits of carpooling, which have nothing to do with conserving gas or saving the planet. Finally, you'll learn how Steinhardt, a conservative (by New York City standards) Democrat, tried to turn the Clinton Administration from a Kameradenland of the liberal Left to something more to his liking (Steinhardt's efforts were unsuccessful, although it turned out that Clinton did bend towards the right after all).

What now for Steinhardt, who like another famous Michael, owns a private zoo? Will he, a professed atheist yet passionate Jew, continue in his efforts to stem intermarriage between Jews and Gentiles through his Birthright Israel program, which offers a free 10-day trip to Israel for any Jewish youth aged 18-26? Will he, like yet another famous Michael, attempt a comeback? Or will he take after another "robust" man of similar temperament whose last name also starts with "Stein" and buy a major league baseball team, thus making entirely different types of trades? Will he, who has dabbled in the movie business, finally make a successful film? (His life story would be a good place to start.) One thing's a safe bet: As far as Michael Steinhardt's concerned, the fat lady hasn't sung yet.

This man was a legendary trader on wall street due to his amazing returns year after year, but his book is such a waist of time, very boring and it does not teach you anything. A great disappointment and unbearably boring. I was looking for some insight, but nothing. The worst I read this year out of 15 investment books.