The markets work. We try to get a conversation going in and hour or hour and a half, beginning in hong kong and owing to a series of important interviews with we have seenwhat with Deutsche Bank and the commerzbank announcement, the so immediate teams and we come to new york. What did you observe last night in the debate . What caught your ride . Mike the thing that was obvious was Hillary Clinton managed to convince people that shes a nice enough person and certainly has a command of facts and donald trump does not change. Tom i will go with that. I dont want to get my pinion in ire, unlike michael, but thought it was fascinating and what i loved about it was when people woke up in their bed like they do every day and listen to or watch bloomberg surveillance, and thats how you begin your enjoying thep postdebate coverage, what did you think, julian . Up,an imagine me waking knowing i was coming here tonight and i wake up and flick on the television to bloomberg and theres this gorgeous face, and its smiling and it says hes going to be there tonight robertson onulian donald trump. Quicklyled tom pretty dont really believe i want to talk about donald trump much except to say, as long as he has brought it up, that i know donald and i like respect the rank hes put back in central park. A lot of mayors left that to rot and he got it running and it is a great part of our park now. But im out of that race. For the formerte governor of new mexico and massachusettsr of and im pleased to do that. You supported in the primaries john kasich. . Hat do you want to see what are the attributes you think we need in this country . Mitt romney exemplified what i want. I want a really bright man, somebody thats a heck of a lot brighter than me or anyone i know. He was clearly that and a decent, good man. He was my perfect candidate. One more question before we get on to economics and finance and i want to tell our audience about julia. We will go to negative rates here. What do you need from your Republican Party today the election is over . How do you get for years out . That going to be an interesting change if there Republican Party is going to be strong in the years ahead. Lets get started. Robertson, of course with tiger management, so much on the heads funny hedge fund business. Why dont you start on this center. Ich is front and mike lets ask about Central Banks distorting markets in general and weather that really anders you or is something is a big part of how you evaluate an investment these days. Think the rates have to be absolutely negative to be too low. We do have too much to fear as far as negative rates in the state yet. Havenk it is tragic we taken rates down this far. Know the federal reserves all over the world are really trying to ensure prosperity, but in so doing, they are ensuring a huge bubble which will be pricked and we will be heard badly by it, i think. That negative rates completely stopped saving because you are not only rewarded for saving but not only not rewarded for saving but penalize for saving. I dont think thats good. It caused a huge bubble in the bond market because people have nowhere else to put their money in less they buy a beautiful piece of art like our ceiling or pictures or something of that nature. Tom where would you put your money now if negative rates have distorted the market and Central Banks have distorted the markets, how would you be exposed today at the end of the year . Julian i think the only game in town are equities. That theater. In mike you have had what has been described as an years in predicate investment style that is basically your own. How would you tell people to look at equities . What withodel the model you would tell people to look at look like . Them thatwould tell in my opinion, there is going to created byly chaos the negative at low Interest Rates. A conservative attitude has to be taken and whether that not, is hedge funds or up to the individual investor. Way of i think ameliorating the effects of bubbles. Tom i look at this and look at the Yellen Press Conference which mike and i were stunned with the other day. Operative theory you can use in investment if you dont know where the riskfree ,ate is or where stability is what can be the operative theory other than getting lucky and picking the right stocks . One of the things that is still a blessing, i think is a lot of the Great Companies of the world are undervalued. Fear of mrs. Clinton on the Drug Companies has created a real bargain in biotechnology stocks. A company like celgene is very reasonably priced. Other Great Companies, the greatest companies out there, google in those type things, they are available at a very reasonable tom multiple. Can we rip up the script . We normally weighed 30 or 40 minutes before we rip up the script. Tom welcome to our audience here in new york with Julian Robertson. His microsoft Financial Engineering when they return cash to shareholders . Say they dont tow what to do or how invest, why are returning so much cash to shareholders . Microsoft has a and i thinkder thats why im such a believer in it now. Its probably number two in the cloud business. Stock when you have a powerful engine under you is an awful good thing to do. Great your own stock is a thing for a company to do. Tom you had to deal with the egos of tiger cub and you mentioned the new leadership of microsoft. What the Esther Ballmer get ofng in the 8, 9, 10 years malays . Lise of malaise. Whenn the problem began mike bill gates retired. You close your fund to outside investors, your returns dropped off because people that you were reluctant to get into the tech boom which turned into a bubble. What do you think of tech today and mark how have your views evolved . Bubble, theseom a great Tech Companies are among the cheap among the cheapest stocks. The 60s andgle in 70s and early 80s would have sold between 50 and 80 times earnings. Iow 20s andery think thats where the soup are thes and probably good values around. When we talk about tech, its a broad category. Services . E microsoft what has the most value . Julian i think biotechnology has the most value. The advances in cancer weht now are fabulous and ownable to get the bodies mechanisms to fight that cancer. Earthk there will be some shaking movements. The idea that maybe youve got a window into what is happening in cancer research, is a like the old days were Large Pharmaceuticals can coopt research and bring it under their umbrella like bristolmyers has done . There is certainly some of that going on and it is still biotechnology. Mike when you identify a firm like that you like, one of your associates said your style is to do a ton of research and find out everything you can and when he likes a company, the vets the farm. That still your style mark still your style . Julian ive never thought of myself as a bet the farm investor, maybe my proteges thought i was. Tom tell us about diversification and if we can shift to the dynamics of the Hedge Fund Industrys everyday. The failures we have seen time and time again. Help me right now with hedge funds. Hedge as youy remember or are they just hedge fund in name . I think a better name would be investment partnership. I do think it is sort of inclusive and always has been for some reason. I think generally speaking, most people are back to hedging more i havey see the risks outlined with the low Interest Rates creating the bubble. When the bubble bursts, people are going to get hurt. Tom how do you deal not with failure but with the market going up in the short screening with every thursday or friday the market is going to come to an end, yet with central bank support, we see asset prices go up. How does a Hedge Fund Manager deal with that . The idea of trying to not lose money, how do you deal with that . Julian its the most difficult time ive ever seen the business and because there are a lot of who are actually and they make a business of doing that, furthermore, i dont know how i think they, but shorts andsqueezing that any rate, i think its tougher to be a Hedge Fund Investor than ever before. Hedge funds ordinarily dont outperform the market to accept im the markets go down for saying outperform the market. Right now, its a very difficult time for them. Just said was not quite true. Last five or six years, it has been difficult for hedge funds to keep up. Three and 30 and the rule is to and 20. A 7 erstand when there is cd etc. , you can make your rate and everyone is happy, including the limited partners of a given partnership. Do you just presume to and 20 trips away . Two and 20ont think is sacrosanct and theres a in thet drift occurring fee structure. If you make it over, you get a payday of 20 . Can i take a detour bute not rip up the script, i would like to ask for a little bit of a history lesson. You started your career in the 1950s and you have through it all. Us you take us back and tell what was like investing in the mad men era and how it has evolved and how youve seen it evolved for good or bad over the years julian . It has always been a great, fund great fun is this for me. When i first got into the business, there was absolutely in looking at Investment Bankers by the investment banks. They just waited for people to it was not at all difficult to get a job in the investment banks. I was in an rotc program and saw a lot of people looking for jobs in new york at the same time i was and the real hotshot ive been on the ship with an things, they went into advertising. Lately, people have swarmed into hedge funds and its very that i got into an industry that wasnt popular. Its something for people to avoidor jobs now over popular areas and go to areas where people are desperately needed. Particularly in science and technology. Lets welcome our audience worldwide and we will come back to the theme of looking back and looking forward. Ofs is a special edition bloomberg surveillance prime time. We welcome all of you worldwide live from our World Headquarters in new york in celebration of a ofrific two days conversation. Im tom keene with michael mckee. Thingst influential builds here starting with hong kong in a few hours. To hong kong go and london and that here. You will want to stay with us. Tom lets finish up with Julian Robertson on where we are. How would you pick a Hedge Fund Manager now . There are a lot of people scrapping away trying to get seed money. To some in our audience, it sounds like a lot of money but thats not in your world. The industries you mentioned earlier, are they so difficult that you look for more closing of hedge funds and returning of assets . Julian i still think the good people will do well and the good people are beginning to do well again. How does one look for one . I think you look for records. Are famous for seating , the tiger cubs and grand cubs, that youou look for want to give money to these days and is a harder to find people these days . That has been the really interesting part of our business, at least it has been for me. I tried to find what were little a goodhat would define Hedge Fund Manager. One of them is competitiveness. Athletessuccessful just wont be beaten because they wont be. Is very,tive nature very important. Weve tried to find other characteristics and i have improved this yet, but i believe , the best ones have a real desire to make this a better place when they leave than when they arrived. Just look at new york and george soros and my politics are different, but hes a great philanthropist. So is paul tudor jones. And john paulson carrying on your charity at central park as well. Julian john paulson, steve mandel and john griffin. So many people are really doing things for new york city. I want to switch gears and talk about what i observed on the screen today which was commerzbank and Deutsche Bank and others collapsing. Help us here with european banking. We could talk for the entire hour about this one thing. 2016, do wemn of hearken to the ghosts of 2007 and late 2008 because of the inability of european banks to clear their challenges . Are we there again as we were in late 2008 . Thatn i cant be sure of and i think our banks are not in as bad of shape as theirs are. Was shocked about the great german bank the other day. Its hard to believe. Morganuld be like saying garrity was in trouble. Jpmorgan. I was shocked. But the shock continues as thingok forward and see a like Deutsche Bank and others. What the that will for next year . I have indicated im not the most lush guy around. Mike Angela Merkel has made news in regard to Deutsche Bank saying shes not going to bail it out. Julian i thought that was an amazing statement that she made up i dont quite understand why she made it. Mike we get the same things from our politicians in washington, dont fail out the banks. Say put them them in jail. Do you think thats fair . Did the financials failed the country did the Financial System failed the country to the point where they should be prosecuted . In 2008i think people get a pretty darn good job of taking a potential disaster and keeping it going. I think the criticism is wrong. Mike you hear from the democratic nominee and her surrogates is we developed a Financial System that has gone way beyond the intermediation needs into a parallel, shadow Banking System that does not benefit society, but only benefit a small sliver of evil. Tom let me translate what he just said. You are the bad guy. Mike you said something about being diplomatic. Im trying that. Be more specific. Why might a bad guy . Tom because senator warren says so. What do you say to senator warren of massachusetts . Julian shes nice lady. Mike does the Financial System work to the benefit of society is the underlying philosophical question. Julian i think it does. I really do. It is working under very, very difficult circumstances, but loans are being made and new isinesses are starting and think the Banking System is i think itenged, but is still working. Tom can you own your selected european banks . You mentioned biotech and some. F the giant tech stocks is there a part of European Finance that is attractive to you . I would rather buy the american banks. Things are not so great for them these low Interest Rates, thats where they make their money, on Interest Rates. Tom what would happen if janet yellen raises Interest Rates . If itould be the outcome factored up to some sort of irmal Interest Rate . Julian think we would have a difficult time for a while. I think its worth it to get that discipline. Mike you think the economy would be better off with higher rates . Julian probably not in the very shortterm, but in the long term, i definitely think it would. Does it increase the return on capital . Where does the benefit come in at this point . Julian the benefit comes in in that we have a realistic system. , you take a guy who sells his is in North Carolina. He gets 5 million for it. Thats all the money in the world. Theres no funny money hedge funds. Its all sort of open and good and down to earth. That 5 million he is 30 or return on it 40,000 after taxes and he realizes hes sold his is this and is not able to live on his life savings. Its the financial repression a lot of people have spoken of for a number of years. This is a special edition of bloomberg surveillance top we are on with Julian Robertson of tiger management. Thrilled to have you with us. We will go for another half hour or so. This is the kickoff to our most influential summit in hong kong starting in a matter of hours. Then on to london and new york with some exceptionally timely interview. I will point out Francine Lacqua plus interviews that you will see. We will be i cant member who is talking to him. Mike its almost time for hockey season. Talking about the fact that people cant make money at higher Interest Rates, is it going to slow the economy or bad Additional Capital investment to the economy . Julian higher Interest Rates are going to encourage savings. I think we desperately need savings. Take a guy who wants to set up a Little Foundation or something widow or something. They dont know what to do with the money. Way they can do anything with it unless they going to stop. I think that is forced equity investing and its just not a good thing. To be distinct here, the bubble or assumed level that you see in equities is very different from the nifty 50 europe decades ago. Is that right . Julian yes. Those stocks sort of love because they went so high. But the ones that would have been 5050 are very cheap. Tom who do you blame for this mess . The courage seen by a lot of officials, maybe they were wrong do you blame something for the conundrum we are in now . Think janet yellen is unwilling to see the American Public take any pain at all. Because of that, i think she is creating a serious bubble where serious pain is. Tom how did we get the inability to maintain markets because we did not want to bear pain . To a lot of people listening and watching this, we did not clear the markets, particularly in europe. Where did this idea come from of painfree capitalism . I dont know. I think its come in part i will say this and i do