Mark Spitznagel

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Mark William Spitznagel
Mark Spitznagel Idyll Farms.jpg
Spitznagel at Idyll Farms
Born (1971-03-05) March 5, 1971 (age 43)
Ann Arbor, Michigan[1]
Residence Michigan, Florida (Miami)
Nationality American
Alma mater M.S. New York University[1]
B.A. Kalamazoo College[2]
Occupation Hedge fund manager, farmer
Notable work(s) The Dao of Capital
Spouse(s) Amy Spitznagel

Mark Spitznagel (born March 5, 1971) is an American investor, author, and farmer.

Spitznagel is known for his über-bearishAustrian”-based stock market investing and pioneering “tail-hedging,” and most notoriously for his hugely profitable billion dollar derivatives bet on the stock market crash of 2008[3][4][5][6][7][8][9][10] as well as for having allegedly caused the stock market crash of 2010.[11] He is among The Wall Street Journal’s “5 hedge-fund managers to watch of Wall Street’s biggest, boldest investors.”[12]

Spitznagel is the founder, owner, and Chief Investment Officer of the multi-billion dollar hedge fund management company Universa Investments, L.P., based in Miami, Florida.[3][5][6][8][13][14][15][2][16][17][18] Spitznagel reportedly has large Chinese and Middle Eastern sovereign wealth funds among his investment partners,[19] and he has since closed his funds to new investors.[3][16] Prior to hedge fund manager, Spitznagel has been an independent pit-trader at the Chicago Board of Trade[3][5][6][8][14][2] and the head of equity options in a secretive proprietary trading group at Morgan Stanley in New York[6][2] (until they requested that he sign a stringent “noncompete” agreement[3]). Spitznagel has a graduate degree from New York University and undergraduate from Kalamazoo College in Michigan.[1][2]

Spitznagel is the author of the 2013 book The Dao of Capital, called by Forbes magazine “one of the most important books of the year, or any year for that matter.”[20]

Financial crisis[edit]

In 2008, Spitznagel’s Universa funds scored returns of over 100% as the Standard & Poor’s 500-stock index lost over a third of its value during the global financial meltdown,[3][5][6][8][15][16][17][21][22] making him “a fortune” according to The Wall Street Journal.[3] Universa lost back about 4% in 2009 and 2010 when the S&P 500 recovered by over 40%.[5][6]

Spitznagel specifically targets very “lumpy returns” (what Forbes has called “a string of mediocre results interrupted occasionally by spectacular years”[23]) which “ultimately keep away competitors,”[6] an esoteric approach he refers to as “time arbitrage”[24] (for which he has been dubbed “the Dr. Who of hedge funds”[25]).

The Wall Street Journal alleged that a large purchase of put options by Spitznagel in the minutes leading up to the 2010 Flash Crash (when the Dow lost over 9% of its value during the day) was among its primary triggers[11][26] (and for which Spitznagel was subpoenaed by the U.S. Securities and Exchange Commission[6]).

Roundabout and The Dao of Capital[edit]

In Spitznagel’s book The Dao of Capital he coins his investing approach as “roundabout investing,” named after the Austrian School of economics concept of Produktionsumweg. (He also refers to it as “Austrian investing,” as the theories inform his notorious very concentrated bearish bets[27][28][29] in his so-called “tail-hedging” funds.[3][5][6][8][11][15][16][17][21][22]) Paul Tudor Jones has said that Spitznagel’s book “champions the roundabout,” and “shows how a seemingly difficult immediate loss becomes an advantageous intermediate step for greater future gain, and thus why we must become ‘patient now and strategically impatient later.’”[30] Spitznagel likens his process to “life’s roundabout road to success, as opposed to the direct. The direct way is easy but ultimately unrewarding. The roundabout, indirect way takes longer but leads to a better strategic advantage.” Spitznagel’s roundabout is basically about delaying gratification and taking small setbacks now to gain enormous positional advantage later.[31] His examples range from forest ecology, baseball, the military texts of Sunzi and Clausewitz, to the ancient Chinese game of weiqi[32] (a game Spitznagel regularly studies with a master-ranked professional[33]).

Spitznagel describes his concept of roundaboutness in the words of Frédéric Bastiat: “we pursue a small present good which will be followed by a great evil to come, rather than a great good to come at the risk of a small present evil.”[34] Spitznagel calls Henry Hazlitt’s book Economics in One Lesson (an expansion on Bastiat’s 1850 essay Ce qu’on voit et ce qu’on ne voit pas) central to his development, and wrote “if I am able to get my children to read only one economics text in their lifetime, God forbid, it would be Hazlitt’s.”[30]:19

Some have called Spitznagel’s approach “doomsday” investing,[35] for which, according to Forbes, he has many “copycat” followers.[36] According to Spitznagel, he has basically been investing against the Federal Reserve and its monetary policies his entire career.[37]

Spitznagel credits his roundabout investing style to his time as a fledgling pit trader in the early 1990s in the bond futures pit at the Chicago Board of Trade.[5][6] There, as the youngest trader in the bond pit,[2] he was mentored by 50-year veteran corn and soybean trader Everett Klipp (a.k.a. the “Babe Ruth of the Chicago Board of Trade”).[1][3][5][38][39] According to Spitznagel, he “was pretty much brainwashed by the age of 16”[6] by Klipp, whose mantra was “you’ve got to love to lose money, hate to make money.” In The Dao of Capital, Spitznagel “applies this approach and his Austrian grounding to Chinese Daoist thought—the art of taking a circuitous path to an endpoint”[40] (called shi, or strategic positional advantage gained at the expense of immediate profits, or li[30]:53).

In a series of Wall Street Journal and Forbes op-eds, Spitznagel extolled the views of Ludwig von Mises, Eugen von Böhm-Bawerk, and Frédéric Bastiat,[41][42][43] and criticized the interventionism of Federal Reserve chairman Ben Bernanke (calling him “easily the most significant market manipulator in history”)[44][45][46] and U.S. President Barack Obama.[43]

Specifically, in his article Christmas Trees and the Logic of Growth, and subsequently in The Dao of Capital, Spitznagel made an analogy of the lessons learned from previous wildfire suppression policy in Yellowstone Park (what he calls the “Yellowstone Effect”) to the Fed’s bailout and crash-suppression policies (and resulting malinvestment).[44] In a conversation in National Review he said: “A crash, or the liquidation of assets that have grown unimpeded by economic reality (as if there were more nutrients in the ecosystem than there actually are), looks to academics and bureaucrats—and just about everyone else as well—like the system breaking down. It is actually the system fixing itself. We live in an economic age where we’ve simply lost our ability to look at the world in this way, though I suspect we’ll be reminded of it again sooner rather than later.”[34]

He has also blamed the Fed for increasing wealth disparity, drawing on the works of Mises, Rothbard, and Hayek.[47]

Spitznagel’s Austrian positions have made him a target of notable Nobel and Keynesian economist Paul Krugman.[48]


In 1999, Spitznagel and author and financial mathematician Nassim Nicholas Taleb together created the first ever “tail-hedging” fund.[7][34][49][50] Taleb went on to popularize the “black swan” concept in his books and Spitznagel went on to modify and implement the strategy (which became a major hedge fund investment asset class[7][35]) at his very successful hedge fund Universa—named for Spitznagel’s investment thesis which, quoting Bastiat, “consists merely in observing universal facts, universal opinions, calculations, and ways of proceeding that universally prevail.”[51] (Taleb also played a passive role at Spitznagel’s Universa, though Taleb has no ownership interest and is a “risk adviser” that “doesn't know their positions” and is “not involved in trading.”[52])

Taleb has said “One thing Mark taught me was that when someone isn't afraid of losing small amounts, they’re almost invincible.”[3]

Spitznagel is presumed to employ positions such as out-of-the-money puts on overvalued equities[3][5][7][8] (for example, Lehman Brothers,[53] about which he has responded “It’s a regrettable aspect of our trade that we tend to do very well on others' misfortune”[54]), which he regards as primarily a value-driven bullish play on cheapened markets, providing dry powder specifically when asset prices are depressed[7] (making him “the inverse Warren Buffett[25][55] and linking him to the value investing philosophy).

Ironically,[56] Spitznagel is indifferent to the concept of “black swan events,” calling them “largely insignificant in at least the last century of capital investment in the U.S., including the current crisis. Investors have indeed encountered surprising and pernicious events, but the fact is those who were surprised have essentially been those (in the extreme majority) with a brazen disregard for the central concepts of Austrian capital theory and monetary credit expansions.”[27]

While, according to The New York Times, Spitznagel “gained credibility in the investment world by predicting two market routs in the past decade, first in 2000 and then in 2008,”[40] he has since made other market calls. In July 2009, Spitznagel opened a fund betting on inflation[3][16]—with a Wall Street Journal front-page headline reporting “Spitznagel Bets Reputation on Inflation[3] (after which the price of gold approximately doubled over the next two years, and Spitznagel’s fund made 20% annual gains[7]). In June 2011, CNBC reported on a research piece by Spitznagel which predicted a 20% correction in the S&P 500 stock index[57] (and the S&P 500 subsequently lost 20% within four months, as Spitznagel’s funds reaped from 20% to up to 10-fold gains[4][58]). In November 2013, Spitznagel called the market valuation of the cryptocurrency bitcoin “scary” and “dangerous,” despite his strong views against fiat money[59] (and within one and six months later, bitcoin lost over one-third and one-half of its value, respectively). In an October 2013 Maria Bartiromo interview, Spitznagel called for a 40% crash in the U.S. stock market within two years (the results of which remain pending).

Idyll Farms and sustainable farming[edit]

Spitznagel built, owns, and operates Idyll Farms, a pasture-based goat farm and creamery that produces award-winning artisanal farmstead chèvre. Idyll Farms chèvres won multiple and repeat awards at the American Cheese Society North American competition in 2013 and 2014.[60] In starting his farm, Spitznagel has said he wanted to “capture the terroir” of his native region,[61] and regularly imports French experts to teach his local staff about goat farming and cheese making and help refine his chèvres.[62] The 200-acre farm estate is located at the site of a 150-year-old dairy farm in Northport “in the bucolic hills of Michigan.” There, according to Der Spiegel, “he produces cheese according to environmentally sustainable methods, because he views modern agriculture, with its large-scale pesticide use and automated factory farms, as degenerate. In fact, he says, factory farming is ‘an ideal metaphor’ for the economy.”[63] To Spitznagel, government intervention in both economic (monetary manipulation) and agricultural systems (the subsidization of grain and GMO production, monoculture, and the excessive use of petrochemicals) distort and impede otherwise productive, healthy, and sustainable natural processes in exchange for short term benefits.[64] “Modern agriculture is about mining the soil for maximum, immediate productivity,”[65] he says. “We’re thinking about how productive this land is going to be in a generation. This is antithetical to the world we live in.”[62] In discussing his life as both financier and farmer, Spitznagel has said “What’s going on in the financial world really shouldn’t matter that much. It’s the tail wagging the dog. What matters is making things, making real things, tangible things people can use.”[62]

Spitznagel is an active proponent of urban farming in Detroit, Michigan. In June, 2014, Idyll Farms moved a herd of its wethers (castrated male goats) along with movable pens and electric fencing from Northport to the heavily blighted Brightmoor neighborhood of Detroit in a philanthropic effort to have the grazing goats clean up overgrown foliage and to help the struggling community through agriculture, jobs, education, and self-sufficiency. Despite heavy local support and national media attention for Spitznagel’s “guerrilla[66] Idyll Farms Detroit project (including from Ron Paul[67]), as well as the similar use of eco-friendly goats in other metropolitan areas,[68] Mayor Duggan immediately ordered the goats removed because of a city ordinance banning all livestock.[69][70][71] Idyll Farms had spent a year preparing their Detroit project, setting up infrastructure, hiring local farm laborers, and consulting with Brightmoor community leaders—who advised the farm “not to engage with city hall” because they thought “the city would not enforce the animal control ordinance.”[72] The New York Times commented that “If this all sounds a little unusual, Mr. Spitznagel has never been one to bend to convention,” and alleged that “Spitznagel has a vested interest in seeing Detroit make a comeback” due to his large personal commercial real estate holdings there—“something he says has no bearing on the Brightmoor project.”[69] (Spitznagel also penned an article in 2013 entitled Austrian Detroit?.[73])

In a conversation with Ron Paul, Spitznagel said “It’s crazy how much bureaucrats determine what we grow and what we eat. Sustainable farmers should all be libertarians.”[74]


Spitznagel and Ron Paul in 2012

An avowed libertarian, Spitznagel, along with entrepreneur Peter Thiel, has been the principal supporter of the U.S. Presidential campaign of (Texas Congressman) Ron Paul, a fellow Austrian economics advocate who “shares his contempt for the Federal Reserve.”[55] In 2012, Spitznagel hosted multiple fundraisers for the congressman[9][10][25][55] (including a party at Spitznagel’s Bel Air home[75]). Spitznagel has been called “arguably Paul’s main economic theorist/popularizer outside an academic context”[25] who “could be Treasury Secretary to a future president Paul, Ron or Rand.”[55]

Personal life[edit]

Spitznagel keeps homes in Michigan (including Wildwood Manor and a century-old Lake Michigan compound in Northport,[5][7][35][76] both built by early automobile barons[30]:44) and in Miami, Florida. (In 2014, Spitznagel moved his hedge fund to Miami from Los Angeles, citing Florida’s “more hospitable business and tax environment” than California’s.[18] He accordingly sold his notable Bel Air mansion that he acquired in 2009 from Jennifer Lopez and Marc Anthony.[77][78])

According to Malcolm Gladwell (in The New Yorker and What the Dog Saw), “Spitznagel is blond and from the Midwest and does yoga. He exudes a certain laconic levelheadedness,” and (quoting Nassim Taleb) “wants to be like (Austrian conductor) von Karajan. Technically superior to the rest of us. No chitchatting. Top skier. That’s Mark!”[49][50] Bloomberg described Spitznagel honing his investing discipline by practicing qigong, dodging oncoming taxicabs while skateboarding in New York City’s Central Park, and piloting engineless sailplanes over California’s Sierra Nevada[5] (which he since gave up for his instrument-rated pilot’s license[7]). Forbes described the “unruffled,” loafered Spitznagel as looking “better prepared for a yacht race than for doomsday.”[24]

In his youth, Spitznagel was admitted to the Juilliard School of Music, though he scrapped his plans upon first visiting the grain pits at the Chicago Board of Trade.[30]:10

Bloomberg reported in 2011 that Spitznagel seeded his family office (Idyll Holdings) with $100 million.[5]

Spitznagel’s older brother Eric writes for Rolling Stone, Playboy, Vanity Fair, Men’s Health, and The New York Times Magazine—where in 2014 he wrote a humorous article about Mark and the death of their father.[79]



  1. ^ a b c d The Secret to Mark Spitznagel’s Success? Not Following the Crowd, CIMS Newsletter, Fall/Winter, 2009
  2. ^ a b c d e f Universa Investments L.P., firm website
  3. ^ a b c d e f g h i j k l m Spitznagel Bets Reputation on Inflation, The Wall Street Journal, June 17, 2009
  4. ^ a b Hedging against disaster even as markets grow calm, Reuters, January 27, 2012
  5. ^ a b c d e f g h i j k l When Black Swans Fly, Bloomberg Markets, November, 2011
  6. ^ a b c d e f g h i j k Profiting from Disaster, Risk magazine, January, 2011
  7. ^ a b c d e f g h Spreading his wings, Absolute Return + Alpha, November, 2011
  8. ^ a b c d e f October Pain Was ‘Black Swan’ Gain, The Wall Street Journal, November 4, 2008
  9. ^ a b Ron Paul Sets Los Angeles Fundraiser, The Wrap, March 4, 2012
  10. ^ a b Ron Paul sets Los Angeles fund-raiser, Reuters, March 4, 2012
  11. ^ a b c Did a Big Bet Help Trigger 'Black Swan' Stock Swoon?, The Wall Street Journal, May 11, 2010
  12. ^ 5 hedge-fund managers to watch in 2012: How to gain market insight from Wall Street’s biggest, boldest investors, MarketWatch Wall Street Journal, December 23, 2011
  13. ^ Mr. Volatility and the Swan, The Wall Street Journal, July 13, 2007
  14. ^ a b Flight of the Black Swan, Bloomberg Markets, May, 2008
  15. ^ a b c Taleb’s ‘Black Swan’ Investors Post Gains as Markets Take Dive, Bloomberg, October 14, 2008
  16. ^ a b c d e Black Swan Fund Makes a Big Bet on Inflation, The Wall Street Journal, June 1, 2009
  17. ^ a b c Preparing for the Next 'Black Swan', The Wall Street Journal, August 21, 2010
  18. ^ a b Spitznagel’s Universa Moves To Miami, FINalternatives, Feb 19, 2014
  19. ^ Taleb’s Pessimism Lures CIC, The Wall Street Journal, August 24, 2010
  20. ^ Black Swans Are A Myth, Government Intervention Is The Only Black Swan, Forbes, August 21, 2013
  21. ^ a b Black Swan Bets, Forbes, January 15, 2009
  22. ^ a b The Stars of The Recession, Newsweek, January 19, 2009
  23. ^ The Oracle of Doom, Forbes, February 2, 2009
  24. ^ a b Protect Your Tail, Forbes, June 27, 2011
  25. ^ a b c d Meet Mark Spitznagel, Ron Paul’s L.A. hedge-fund guy, KPCC, Southern California Public Radio, March 5, 2012
  26. ^ Chicago fires back over stocks sell-off blame, Reuters, May 11, 2010
  27. ^ a b Spitznagel, The Austrians and the Swan: Birds of a Different Feather. Universa website. May, 2012
  28. ^ Mark Spitznagel: The Austrians And The Swan - Birds Of A Different Feather, Zero Hedge, May 21, 2012
  29. ^ Fed’s monetary credit expansion doomed to fail and lead to stock market crash, says Spitznagel, Hedge Funds Review, June 6, 2012
  30. ^ a b c d e The Dao of Capital: Austrian Investing in a Distorted World. New York: John Wiley & Sons. September, 2013
  31. ^ The roundabout path to profits: Mark Spitznagel on the Dao of Capital, Futures Magazine, April 1, 2014
  32. ^ Waiting for the next stock market crash, Fortune Magazine, September 25, 2013
  33. ^ Shotwell, Appendix VII: The Use of Shi and Li in Weiqi and American Politics, Speculations About The Origins of Go, 2012
  34. ^ a b c Taleb, Spitznagel, Inequality, Free Markets, and Crashes, National Review, May 31, 2014
  35. ^ a b c New Investment Strategy: Preparing for End Times, The New York Times, June 29, 2011
  36. ^ Wall Street’s Black Swan Copycats, Forbes, June 8, 2011
  37. ^ Why Ron Paul and Mark Spitznagel will not go quietly into the Republican night, KPCC, Southern California Public Radio, July 25, 2012
  38. ^ Everett Klipp: 'Babe Ruth of the CBOT', Futures Magazine, May 1, 1999
  39. ^ Veteran Trader of the Chicago Board of Trade, Chicago Tribune, January 31, 2011
  40. ^ a b A Hedge Fund Manager Who Doesn’t Mind a Losing Bet, The New York Times, June 29, 2011
  41. ^ Spitznagel, The Man Who Predicted the Depression, The Wall Street Journal, November 7, 2009
  42. ^ Spitznagel, The Role of Capital Has Politicians Confused, Forbes, January 31, 2013
  43. ^ a b Spitznagel, Our Malinvestment In President Obama Will Bring Painful Consequences, Forbes, November 15, 2012
  44. ^ a b Spitznagel, Christmas Trees and the Logic of Growth, The Wall Street Journal, December 23, 2011
  45. ^ Spitznagel, The Fed and the May 6 'Flash Crash', The Wall Street Journal, May 28, 2010
  46. ^ Spitznagel, All About the Benjamins, The Wall Street Journal, March 30, 2011
  47. ^ Spitznagel, How the Fed Favors The 1%, The Wall Street Journal, April 19, 2012
  48. ^ Krugman, Plutocrats and Printing Presses, The New York Times, April 20, 2012
  49. ^ a b Malcolm Gladwell, Blowing Up, The New Yorker, April 29, 2002
  50. ^ a b Malcolm Gladwell, What the Dog Saw: And Other Adventures. Little, Brown and Company. 2009
  51. ^ Universa Investments L.P., firm website splash page. Retrieved on August 1, 2014.
  52. ^ 'Black Swan' Author Denies Role in Market Meltdown,, May 12, 2010
  53. ^ DealBook, The New York Times, January 29, 2009
  54. ^ Overheard, The Wall Street Journal, February 14, 2009
  55. ^ a b c d Hedge-fund manager Mark Spitznagel to host Ron Paul fundraiser, Digital Journal, March 6, 2012
  56. ^ Is Spitznagel an Apostate?, Falkenblog, June 17, 2012
  57. ^ Black Swan: A 40 Percent Correction?,, June 16, 2011
  58. ^ Universa, Pimco Posted Gains on Black-Swan Funds as Market Fell, Bloomberg, August 10, 2011
  59. ^ This Fund Manager Thinks Bitcoin’s Value Is Limited, The Motley Fool, November 25, 2013
  60. ^ Idyll Farms Wins Two Awards at 2014 American Cheese Society National Competition, Yahoo! Finance, August 13, 2014
  61. ^ Idyll Farms Crafts Old World, Blue Ribbon Goat Cheeses, Traverse, Northern Michigan’s Magazine, April 29, 2014
  62. ^ a b c Mark Spitznagel on the world of farming, finance, Traverse City Record-Eagle, July 27, 2014
  63. ^ Feeding the Bubble: Is the Next Crash Brewing?, Der Spiegel, December 3, 2013
  64. ^ Sustainable Agriculture Advocate, Fund Manager Predicts Market Crash, Agriculture Downfall, The Motley Fool, November 8, 2013
  65. ^ Goats: Coming Soon to a City Near You, Sierra Club, July/August, 2014
  66. ^ The Goats of Detroit, Modern Farmer, June 18, 2014
  67. ^ Detroit Mayor Mike Duggan Halts Urban Farming Project in Struggling Neighborhood, Ron Paul Channel, June 9, 2014
  68. ^ America's best cities for goat-owning hedge fund managers, Fortune Magazine, June 12, 2014
  69. ^ a b Fund Manager Sets Goats Grazing in Blighted Detroit, The New York Times, June 5, 2014
  70. ^ A Deadline for Goats to Get Out of Detroit, The New York Times, June 6, 2014
  71. ^ City of Detroit butting heads with blight-eating Brightmoor goats, Detroit Free Press, June 6, 2014
  72. ^ No goats allowed! Detroit shuts down a farm’s efforts to rid Brightmoor of blight, NPR, June 10, 2014
  73. ^ Austrian Detroit?,Project Syndicate, August 6, 2013
  74. ^ Paul, Spitznagel, Americans Must Choose Non-Intervention for Peace, Prosperity, Voices of Liberty, August 26, 2014
  75. ^ Look Which Hedge Funder Has His Arms Around Ron Paul, Business Insider, April 22, 2012
  76. ^ Northport’s Got Your Goats, Leelanau Enterprise, September 20, 2012
  77. ^ J-Lo and Marc Anthony Sell In Los Angeles to Financier, The Wall Street Journal, January 8, 2010
  78. ^ Mark Spitznagel sells former J.Lo estate in Bel-Air, Los Angeles Times, November 26, 2013
  79. ^ Spitznagel (Eric), The Moat, the Millions and the $50 Timex Watch, The New York Times Magazine, May 30, 2014