Who Will Be Left Holding the Bag

That evening, a grand Christmas reception was being held at the Pierre Hotel in Manhattan.

"Tonight seems to be a feast for Wall Street investors!"

Aaron clinked glasses with Leon Cooperman of Omega Consulting.

Julian Robertson of Tiger Management, George Soros of Quantum Fund, David Bonderman and Jim Coulter of TPG (Texas Pacific Group), David Komansky, chairman of Merrill Lynch Bank's board of directors, and many other financial heavyweights were all in attendance!

Leon Cooperman smiled. "Unfortunately, while NASDAQ is booming, Long-Term Capital Management stumbled after betting on Russia during the Asian Financial Crisis."

Aaron looked in one direction. "Tiger Management isn't having an easy time these days!"

Since last year, Tiger Management had been shorting tech stocks while going long on traditional stocks. But as market money continuously flowed from traditional companies into tech firms, the share prices of the traditional companies Julian Robertson had gone long on plummeted, while the tech stocks he had shorted rose against the trend.

Tiger Management had escaped the financial tsunami in Asia, only to suffer devastating losses because Julian Robertson worried about tech stocks, shorted them, and invested in traditional companies.

Not far away, several furious investors had cornered Julian Robertson, the head of Tiger Management, in one corner of the ballroom. "Look at NASDAQ! It's up 85% this year! And you're still insisting on investing in some lousy airline stocks?"

"Lucent has risen 165%, while American Airlines is down 40%!"

Julian Robertson, who had always doubted the tech bubble, looked pale as he clenched the report in his hand. "Value may arrive late, but it will never be absent. The tech stock bubble is already terrifyingly large."

One of the investors had a livid expression. "Last year, Quantum Fund also shorted tech stocks and suffered major losses."

"But after George Soros