The perennial attraction of curve steepeners

By Felix Salmon
June 3, 2009

In January 2008, Brian O’Keefe informed us that “the biggest bet that [Julian] Robertson has in his own portfolio at the moment” was a curve steepener.

In October 2008, Buck Woodford told us that Robertson’s “favorite investment right now” was a curve steepener.

Now, in a “very recent May/June 2009 interview with Value Investor Insight”, Robertson seems to have “bet the farm” on, you guessed it, curve steepeners.

It’s worth noting that in the middle of this timeline we had the failure of Lehman Brothers and the most astonishingly disruptive market meltdown in living memory. But I guess Robertson saw that coming, seeing as how his strategy doesn’t seem to have changed at all.


We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see

Don’t want to ‘defend’ Robertson here, but I’d take issue with your last paragraph. Robertson actually did predict the financial crisis 2.5 years ago in a previous interview with Value Investor Insight. Regardless though, it’s not like its the only play in his portfolio. He’d been short US equities as well based off his Bloomberg tv interviews from back then.

I’d say that he keeps harping on this bet simply because that’s his style. Once he identifies the play, he’s all-in. So its obviously in his best interests to publicize it. And based off what we know, he’s profited from it.


He probably increased his position when yields tightened at the time of Lehman’s collapse (curve flattened) – from his perspective the risk-reward on the trade moved more in his favour. I doubt he thinks too much about the mark-to-market on his own portfolio.

Posted by Duke Nukem | Report as abusive