KERNEN: How much did you make last year? I mean, we can talk. No, just kidding. I'll tell you what I think. Every time I've looked at a mutual fund prospectus, it says past performance is not indicative of future performance.
And I think about Paulsen (ph) and how he got famous and how much money he made. And then I look at his performance this year. What does it feel like to have that pressure on you year-after-year? And are you just smart enough to know what to do every year? For sure (ph).
TEPPER: Yes. No, I mean, look, my long-term record is actually pretty consistent. It's inconsistently consistent.
KERNEN: It's compounded at what?
TEPPER: So for me, or for my investors?
KERNEN: Either way.
TEPPER: For me, probably like a 40 percent.
QUICK: What about for your investors?
TEPPER: And for my investors, like, 30 percent.
KERNEN: I mean, and we are talking now about not being able to do five percent for pension plans. Like not -- people are accepting two and a half percent just to get their money back in ten years.
TEPPER: Yes.
KERNEN: How do you do 40? How many years is that -- that 40 percent?
TEPPER: Seventeen years.
KERNEN: I don't believe you. That's impossible. No, I believe you, but it seems almost impossible to be able to do that.
TEPPER: Well, actually, Joe, in the office, we have three little pigs and we'd shake the pigs to see which way to invest. If they land on their feet, we go long. If they're on their backs, we go short.
That's it.
KERNEN: There's no -- is there an octopus or something like for get soccer?
TEPPER: No octopus. Pigs, pigs -- three little pigs.
KERNEN: How many asset classes are in your universe? Will you do anything and long or short anything, long or short any asset class?
TEPPER: Yes, actually, Appaloosa and Palamino are one set of funds. And then we have through our break (ph) funds. So Appaloosa and Palomino will do anything -- stocks, bonds.
KERNEN: How much leverage?
TEPPER: None.
KERNEN: None?
TEPPER: None.
KERNEN: None.
TEPPER: What do you need leverage for?
KERNEN: You don't.
TEPPER: We don't.
KERNEN: I mean, you do 40 percent and when you see the outsized (ph) returns in the past, some of these guys have used leverage.
TEPPER: No, we don't have leverage. And we didn't have leverage in 2009. We don't have leverage this year.
KERNEN: You saw that, you know, Michael Lewis (ph) can write a book about a huge trade and it can be a bestseller. What did you see -- how did you do it in '09? What happened with buying banks
at the beginning of '09? What did you see.
TEPPER: It was easy.
KERNEN: It was easy.
TEPPER: It was.
QUICK: Why?
KERNEN: Why?
TEPPER: The government told you what they were going to do. Basically, the government put out a white paper, I can't remember the exact date (ph).
QUINTANILLA: That (ph) was Congress' paper?
TEPPER: In March. It was a treasury paper. You know, you can't put out a paper and say you're going to buy securities and not buy them.
Even the government has to be subject to the laws. So they told me they were going to buy Bank of America at a six (ph).
They told me where they were going to buy all their stocks. Nobody believed them. The market kept going down. We actually did. So what we did is we didn't buy just stocks, we bought bonds.
So we bought bonds, a preferred, you know, at $0.12 and a dollar fifteen, cents and a dollar, $0.20 and a dollar and, you know, stuff went up.
QUICK: But couldn't it have been a situation where some of these banks had to get nationalized that's why people cared so much?
TEPPER: Not at that point. Not at that point because you have to believe that the government's not above the law. Now, at that point in time, people were confused.
And they thought -- I don't know what they thought because it was a habeas corpus in the civil war, it wasn't that bad.
