The unspoken rules of Wall Street’s best hedge funds

Working as a young analyst on Wall Street, Qiao Ma, Portfolio Manager at Cooper Investors, had the privilege of direct contact with legendary hedge fund manager, Julian Robertson. Qiao worked at Coatue Management, one of the famous “Tiger Cubs” that spun off from Julian’s Tiger Funds Management. It was an incredible experience to be grilled by Julian about a stock you covered, but she warns that it was important you’d done your homework well.

“Julian had an unspoken rule, if you cover a stock, or you pitch a stock, you better know more about that stock than anyone else in the world. He doesn’t care that you sit in New York and you’re talking about a stock based in New Delhi. You better know more about that stock and that management team than any local investor.”

In this episode of The Rules of Investing podcast, we discuss how she applies that same principle with her own analysts. Qiao also shares her experience in China at the start of the COVID-19 outbreak, how one of her first investments saw 15% of its value evaporate overnight, and some of the exciting opportunities she's seeing throughout Asia today.

Time stamps:

• 2:57 - How Qiao’s first trade on Wall Street went awfully wrong and taught her the importance of due diligence on management
  
• 7:00 – The unspoken rule of Julian Robertson the “Godfather of US Hedge Funds”
  
• 11:48 – Why many perceptions about investing in Asia are out of date
  
• 15:14 – The behaviours that set founder led firms apart from the rest
  
• 20:19 – Qiao’s experiences from being on the ground in China as COVID-19 broke out
  
• 23:18 – How COVID-19 put a spotlight on the highest quality companies
  
• 25:05 – Permanent vs temporary change emerging from COVID-19
  
• 27:25 – The fertile investment opportunity in India
  
• 33:04 – The 10-year opportunity that Qiao is most excited about
  
• 34:49 – The compelling thesis behind China Mengniu Dairy Company Limited (2319:HK)
  
• 39:44 – Qiao answers the three regular questions

Content discussed:

• Every Man His Own University: How to Achieve Success Through Observation, by Russell Conwell
• More Money Than God: Hedge Funds and the Making of a New Elite, by Sebastian Mallaby

Outside of a defunct looking Yes Bank branch, the competitive banks set up makeshift booths (with security guards) to line up Yes Bank customers.