Little Little Man

This boy is no longer a boy. He’s a brave. He is little in body, but his heart is big. His name shall be “Little Big Man.”

—Old Lodge Skins, from ‘Little Big Man’

David Rocker announced his retirement last week. After many years in the business and 21 with his own successful hedge fund, David is doing something very few people ever do in the hedge fund world: he is retiring and passing on his business to a new generation.

Hedge funds are notoriously fickle things. Like many entrepreneurial corporations founded by a strong individual—Wal-Mart, for example—they reflect the culture and background of the individual who started them.

But that’s where the similarity ends, because unlike a company with a product or service, or even a mutual fund with a large staff and broad array of services, hedge funds are generally speaking highly focused investment vehicles and therefore very much dependant on the capabilities of their founder. And when that founder decides to step down, there is usually no successor.

Even all-time greats like Julian Robertson and Michael Steinhardt closed their shops and returned the funds to outside investors, although they still run money and their protégés have moved on to, in some cases, even better track records and happier investors.

Still, as a former member of Rocker Partners, I’ve known for years that David had delegated much of the day-to-day responsibilities to his ace partner, Marc Cohodes. So when David called early last week to tell me of his decision to retire, it came as no big surprise. Like the class act he is, however, David wanted me to hear it from him before it came from anybody else.

And now, today, I read in the Salt Lake Tribune—hometown paper of Overstock.com, whose CEO has claimed to practice a “Buddhist non-attachment” to his critics yet nevertheless is engaged in a lawsuit with some of those critics—the following:

Overstock CEO Patrick Byrne weighed in Thursday by referring to a Marin County, Calif., judge’s refusal last month to dismiss Overstock.com’s libel and unfair business practices lawsuit against the Gradient market research firm. “Oddly Mr. Rocker’s retirement announcement comes just two weeks before the Marin County Court is scheduled to rule on whether we can proceed with our [evidence] discovery requests,” Byrne said. “I suspect the only civic duties he will have time for are responding to court-ordered discovery.”

And all I could think is what a little man he is. Byrne may be big in body or brains or checkbook, to paraphrase Old Lodge Skins. But what a little, little man.

Jeff Matthews I Am Not Making This Up

© 2005 Jeff Matthews

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations.