Top investors share concerns about markets

* Managers detail their worries about markets

* Some say how much they lost in the last month

By Svea Herbst-Bayliss

NEW YORK, May 26 (BestGrowthStock) – Some of the world’s most
successful hedge fund managers seem to wish they had followed
the old adage “sell in May and go away.”

Speaking at a conference in New York on Wednesday, one
top-rated stock picker after another shared concerns about the
state of the world economy amid a sharp correction in the stock
market that started a month ago.

“As I look at the current investment climate I have to tell
you I’m worried,” said Jonathon Jacobson who founded hedge fund
firm Highfields Capital. His biggest concern — U.S. lawmakers
who he says are creating a hostile environment for business.

“What I worry about are the the clowns and the climate in
Washington,” Jacobson said, adding “there is no leadership on
either side of the aisle.”

For Daniel Arbess, a partner at Perella Weinberg Partners
and the portfolio manager of its Xerion Funds, it is more than
the climate that is giving him pause.

“The very foundation of the economy is shifting under our
feet,” he explained.

With the euro crumbling, worries about the safety of
sovereign debt rising, Europe hurtling toward a a full-blown
financial crisis, and U.S. markets taking investors on a roller
coaster ride in recent weeks, some managers acknowledged the
pain they have suffered themselves.

David Tepper, whose Appaloosa Management gained 130 percent
last year on bets that ailing financial stocks would recover,
joked about how much money he lost this month.

“We are a $13 billion hedge fund,” Tepper said pausing for
effect at the Ira Sohn Conference, which raises money to fight
pediatric cancer. “At the start of the month we were a $14
billion hedge fund. But what the hell. What are you going to
do?”

Current fears about what might happen next added a somber
note to an otherwise festive occasion where more than 1,000
investors from around the globe gathered to hear some of the
world’s most successful investors reveal their thoughts.

Sam Zell, chairman of Equity Group Investments, LLC, warned
the audience that whoever doesn’t adapt to fast changing
conditions may not be here next year.

His stern tone prompted some audible gasps as well as
snickering in the crowd.

Coming so soon after the 2008 financial crisis, many
managers are finding current conditions especially difficult to
explain, and more importantly how one adjusts to them.

Many questions were posed: Is this a repeat of the crisis
or possibly something even worse? Will Europe’s common currency
survive? And what are investors to do in an age where simply
purchasing stocks and bonds is probably not enough to secure a
comfortable retirement.

“How should we decide whether these issues are real or just
the bogeyman,” asked Larry Robbins, CEO of Glenview Capital
Management. “No one knows,” he added, not very reassuringly.

With such uncertainty surrounding the future of world
markets, a quick fix seemed equally clouded. Robbins for one
laid out three scenarios:

Investors can put assets into cash, buy safer corporate
bonds or pick stocks selectively, choosing the ones that will
grow no matter what happens to currencies or the economy.

Investment Research

(Reporting by Svea Herbst-Bayliss; Editing by Bernard Orr)

Top investors share concerns about markets