Investment Guru of the Year 2010: David Tepper

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Dec 24, 2010
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Hedge fund manager David Tepper of Appaloosa Management has been voted as the Investment Guru of the Year 2010 by GuruFocus users. He got more than 31% of the total votes casted up to today.

Since 2005, names its Investment Guru of the Year every year. The process involves two steps. In the first step asks users to nominate their choices of Investment Guru of the Year. The top 5-6 nominees will be put into a poll, and GuruFocus users will be able to vote for their Investment Guru of the year. The Guru who gets the most of the vote will be named Investment Guru of the Year.

David Tepper certainly earned his right to be called “Guru of The Year”. According to the performance data that GuruFocus gathered, through the end of 2009, Tepper’s Appaloosa Invesment LP I fund returned 132.72% in 2009; it returned accumulatively 181.7%, 1076.7%, and 4302.4% in the past 5, 10, and 15 years respectively.

Tepper will join several other Investment Gurus who won the “Guru of the Year” title in the past few years:
Investment Guru of the Year 2009: Bruce Berkowitz

Investment Guru of the Year 2008: PremWatsa

Investment Guru of the Year 2007: KenHeebner

Investment Guru of the Year 2006: WarrenBuffett

Investment Guru of the Year 2005: DavidDreman

We should mention that several other Investment Gurus were also nominated as candidates for Guru of Year 2010 by our users. These Gurus are: David Einhorn , Prem Watsa, Donald Yacktman and Daniel Loeb . Unique in their own ways of investing, these Gurus have enriched investors with super performances and the value investing community with sound advice. We thank them.

Wikipedia has an extensive entry for Tepper. Here are the sections concerning his education and career:
High school and college

Tepper was raised in the East End of Pittsburgh in the city section known as Stanton Heights and attended Peabody High School in the East Liberty neighborhood of Pittsburgh, Pennsylvania. At the University of Pittsburgh he paid his way through school by working at the Frick Fine Arts library. He graduated with honors receiving his Bachelor of Arts degree in Economics. He also dabbled in the markets during college.

After graduation he entered the finance industry working for Equibank as a Credit Analyst in the Treasury department. In 1980, unsatisfied with this position he enrolled at Carnegie Mellon University's business school to pursue its version of an MBA, a Master of Science in Industrial Administration (MSIA).


After earning his MBA in 1982, Tepper accepted a position in the treasury department of Republic Steel in Ohio.

In 1984, he was recruited to Keystone Mutual Funds (now part of Evergreen Funds) in Boston, and in 1985, Tepper was recruited by Goldman Sachs, which was forming its high yield group. He joined the firm in New York City as a credit analyst. Within six months, Tepper became the head trader on the high-yield desk at Goldman where he worked for eight years. His primary focus was bankruptcies and special situations. He left Goldman in December 1992 and started Appaloosa Management in early 1993.

In 2001 he generated a 61% return by focusing on distressed bonds, and in the fourth quarter of 2005 he pursued what he saw as better opportunities in Standard & Poor's 500 stocks. He makes significant gains year after year by “investing in the diciest of companies,” such as MCI and Mirant. Investments in Conseco and Marconi also led to huge profits for the company’s hedge funds while Tepper “keeps the market on edge.”

In 2009, Tepper's hedge-fund firm earned about $7 billion by buying distressed financial stocks (including acquiring Bank of America common stock at $3 per share) in February and March of that year and profiting from recovery of those stocks, with $4 billion of these profits going to Tepper's personal wealth. In March 2010, the New York Times reported that Tepper's success made him the top-earning hedge fund manager in the world in 2009, and in 2010 he was ranked by Forbes as the 258th richest person in the world.

Seasoned readers of GuruFocus may recall the famous interview Tepper had with CNBC on September 24 2010, in which he the following call on US stock market:
If the economic reports are good, we can buy.... If the economic reports are poor, we have the Fed backstopping the markets, so we can buy....
S&P 500 has rallied about 12% since then – Tepper has been once again right.

Intrigued and inspired? Do you want to invest like David Tepper ? You should know that Tepper makes a good portion of his profit by investing in distressed debt. If you just want to follow Tepper in stock investing, you are in the right place. You can check out his stock portfolio Here.

Congratulation, Mr. Tepper!

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