BARTON BIGGS:BARTON BIGGS, the New York money manager whose attention to emerging markets during a 30-year career at Morgan Stanley made him one of the first global investment strategists, has died. He was 79.
He predicted the bull market in US stocks that began in 1982 and warned investors away from Japanese shares in 1989 before they collapsed. He sealed his fame telling investors to sell technology companies as they soared in the late 1990s, a judgment dismissed by the press and other investors until the dotcom bubble burst.
After retiring from Morgan Stanley in 2003 at the age of 70, Biggs started Traxis Partners, a hedge fund, with two other Morgan Stanley alumni.
While he was blindsided by the credit crisis that sent the Standard and Poor’s 500 Index in 2008 to its biggest annual decline since 1937, he correctly called the bottom in US stocks in March 2009. Traxis’s flagship fund returned three times the industry average in 2009.
Biggs largely invented the role of chief global strategist, which he assumed at Morgan Stanley in 1985, said Stephen Roach, who joined the firm as an economist in 1982 and became chairman of Morgan Stanley Asia.
“When I joined Morgan Stanley, we were a US-centric business, and within three years, he said, ‘Look, I’m going to step down as US strategist and redefine myself as a global strategist’,” Roach said. “He was way ahead of the pack in discovering and committing himself personally to being one of Wall Street’s first global investors and global strategists.”
Biggs’s reports regularly cited his bullish plumber to illustrate the conventional wisdom of common investors. In 2000 he acknowledged that he had fabricated all the quotes but the first one – “buy the dips” – which the plumber had told him while unclogging a sink at Biggs’s Sun Valley, Idaho, holiday home in 1997.
After Bloomberg News identified the plumber, Biggs apologised and said he had used him as a literary device.
Biggs, who majored in English and studied creative writing at Yale University, wrote a memoir, Hedgehogging, published in 2006. Wealth, War and Wisdom, published in 2008, explored how financial markets discounted major turns of events during the second World War. He also wrote a novel about a money manager during the boom-and-bust first decade of the 21st century.
Barton Michael Biggs was born on November 26th, 1932, in New York. After his graduation in 1955 from Yale, he served three peacetime years with the US marines, taught English at a private school and wrote short stories that publishers rejected.
Bored and feeling left out of dinner-table conversation between his father and younger brother Jeremy, who worked for a pension fund, Biggs chose his career.
On his father’s advice, he twice read Security Analysis, the guide to value investing by Benjamin Graham and David Dodd, first published in 1934. He enrolled in business school at New York University, graduated with distinction, and went to work as an analyst at EF Hutton – then the most prestigious retail brokerage – in 1961 through a family connection.
Hedge funds, mostly private pools of capital whose managers participate substantially in the profits from their speculation on whether asset prices will rise or fall, were in their infancy.
Biggs helped start one of the first, Fairfield Partners, in 1965. The fund returned 133 per cent over the eight years he was there, compared with 19 per cent for the SP 500.
In May 1973 he accepted a partnership offer from Morgan Stanley to create equity research and investment management divisions. While he was best known for the strategist role, Biggs also led Morgan Stanley’s investment management arm and managed money personally.
Biggs was voted among the top three US portfolio strategists in Institutional Investor magazine’s poll every year from 1976 to 1984.
His work ethic was legendary.
Byron Wien, the vice chairman of Blackstone Advisory Partners LP who worked at Morgan Stanley with Biggs, said: “I remember once when Phantom of the Opera opened in London and it was a big hit and I managed to get tickets for it and I took him. He took a stack of research materials to read during the intermission. It was classic. Now that I remember that story, that describes it better than anything I could tell you.”
A lifelong fitness buff, he read stacks of reports while exercising in the Morgan Stanley gym. In addition to playing tennis, he routinely climbed mountains in the 12,000ft to 15,000ft range, including Mont Blanc and the Matterhorn in the Alps and Mount Rainier in Washington State, until 2008.
Biggs and his wife, Judith Anne Lund, had three children. The marriage ended in divorce.
Barton Michael Biggs: born November 26th, 1932; died July 14th, 2012.