Legendary Wall Street strategist Barton Biggs was bold and outspoken. He was one of a kind during an era on a Wall Street that doesn’t exist anymore. As a money manager at Morgan Stanley for over 30 years, he would become their first global strategist. He studied creative writing at Yale University and was known for his gifted writing style. On Saturday, June 14, Biggs passed away.
I first came into contact with Biggs in the early 1990s, then already known for predicting the bull market in U.S. stocks that began in 1982 and he warned investors away from the Japanese stock market in 1989 before it collapsed. He would go on to cast in stone his reputation by advising investors to sell high-technology companies as they roared higher during in the late 1990s. Many in the press and within the industry took issue with that forecast only to wish they didn’t by the time the Dotcom Bubble came to an end. Biggs never cared what other firms or analysts thought as he was a true maverick and followed his own instincts.
A colleague of his Stephen Roach stated, “When I joined Morgan Stanley, we were a U.S.-centric business, and within three years, he [Biggs] said, ‘Look, I’m going to step down as U.S. strategist and redefine myself as a global strategist.’
“He was way ahead of the pack in discovering and committing himself personally to being one of Wall Street’s first global investors and global strategists.”
Reminiscing about Biggs, Michael Holland, chairman of New York-based Holland & Company, spoke out, “I think of a dinner in Rye, New York, at a fancy restaurant with Louis Rukeyser (financial journalist, columnist and commentator) and his wife and Barton Biggs and his wife and my wife and myself as one of the great evenings of entertainment and wisdom that I’ve experienced. He’s left a treasure behind.”
In Institutional Investor magazine’s annual poll, Biggs was voted among the top three U.S. portfolio strategists every year from 1976 to 1984. He and his global asset-allocation team took the top spot in 1998 and 1999. His global equity strategy team was first in 2000 and 2001. In 2003 he retired from Morgan Stanley to found Traxis Partners, a $1.5 billion hedge fund.
Biggs was not infallible as he totally missed the global market meltdown starting in 2007. Opining about the downturn Biggs stated, “There have been many bear markets that we’ve all lived through, but this has been the most severe and certainly has had the most personal effects on people’s lives. I’m interested as to how hubris and arrogance have destroyed people’s lives and not just the lives of the hedge-fund money managers, but the lives of their wives, children, dogs and everything else.”
Biggs’ time at Morgan Stanley was a period when the firm became one of the pre-eminent brokerage and investment banks in the world. For its part, Morgan Stanley traces its heritage to J.P. Morgan & Company after the Glass–Steagall Act of 1933 separated commercial and investment banking. Henry S. Morgan, the son of J.P. Morgan, and Harold Stanley, left J.P. Morgan & Co. and partnered with folks from the old Drexel crowd to form Morgan Stanley at 2 Wall Street. Biggs became managing director and general partner of Morgan Stanley in May 1973. He was their first research director and established Morgan Stanley Investment Management in 1975. He served on their board until 1996.
“He was known as an independent thinker, colorful writer and one of the pioneers of emerging markets investing,” Morgan Stanley CEO James Gorman wrote, “and our firm benefited from his vision.”
Former Morgan Stanley CEO John Mack said, “He was totally independent. He thought out of the box and he got people to think out of the box. That’s how I’ll remember him, always as someone who was taking a much broader view or something that others had not thought of.”
While Biggs was no JP Morgan himself, he nevertheless was a giant among giants in this age. What was most striking was the fact that while many Wall Street types hedged their market comments on a daily basis, Biggs told it like it was — whether you wanted to hear it or not.
Quote of the week: “We weren’t geniuses. We were just in the right place at the right time.” — Barton Biggs (speaking about Morgan Stanley).
Bart Ward is the chief executive officer of Ward & Co. Ltd. an Anoka-based registered investment adviser – specializing in the management of stock and bond portfolios in companies which are listed on the NYSE.