What was your greatest investment accomplishment?
The performance I achieved and the fact I was able to manage in all sorts of markets. I was able to function as a macro investor, an individual stock picker, and was able to adapt to a range of investment climates very early.
How did you pull that off?
My philosophy is not restrictive. It is a philosophy that says, “I am going to look at everything. If I see value anywhere, I’ll be sufficiently comfortable and knowledgeable and intellectually advantaged wherever I invest.”
What else distinguished your investment style?
I was very sensitive throughout my career to the idea that the bigger you are, the bigger your risk is. That was true of some of the people in the ’60s and ’70s and maybe the ’80s. It was not true of the major hedge fund managers of the ’90s and today. They go for size and are less interested in absolute performance. They are more interested in relative performance. You don’t hear people going for 30 percent, 40 percent returns so much. I wanted to be the best money manager. When I was investing, I measured it one way — which was raw performance.
Why did you retire when you did?
I was thinking about it for a long time. I grew up in a lower-middle-class family in Brooklyn where everyone was liberal. It was against the grain to live one’s entire life to make money. I made so much money early on, I didn’t know what to do with it.
Did you retire too soon?
Financially, I probably did. The amounts of money that have been made since are breathtaking. I would have given away more money.
What drives your philanthropy?
I don’t want on my tombstone, “Michael Steinhardt was one of the world’s greatest money managers.” I had said to myself, when I stop managing other peoples’ money, that I wanted to be ennobling and virtuous, something that really helped some part of the world that was important to me. What was important to me was improving the Jewish future.
Do you still invest?
I still trade a little for my own account. But I’m not in the office enough to do rapid trading. Almost every year I have done very well, but last year I lost money. When I have not invested well, it was because of investments I made in individual stocks. I have always done well with the macro stuff.
How have you positioned your investments?
I am short the S&P, but not in an intense way. I am also long the dollar, short American interest rates and short German interest rates. The thinking is, we are going to have inflation in all places and it will be a problem.
— Interview by Stephen Taub
