Mark Spitznagel

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Mark Spitznagel
Austrian School
Mark Spitznagel interview.jpg
Born (1971-03-05) March 5, 1971 (age 43)
Nationality American
Alma mater New York University[1] (postgrad)
Influences Ludwig von Mises, Eugen von Böhm-Bawerk, Frédéric Bastiat

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[2][3][4][5][6][7][8][9] as well as for having allegedly caused the stock market crash of 2010.[10] He is among The Wall Street Journal's “5 hedge-fund managers to watch of Wall Street’s biggest, boldest investors.”[11]

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.[2][4][5][7][12][13][14][15][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.[2][16] Prior to hedge fund manager, Spitznagel has been an independent pit-trader at the Chicago Board of Trade[2][4][5][7][13][15] and the head of equity options in a secretive proprietary trading group at Morgan Stanley in New York[5][15] (until they requested that he sign a stringent “noncompete” agreement[2]). Spitznagel has a graduate degree from New York University and undergraduate from Kalamazoo College in Michigan.[1][15]

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,[2][4][5][7][14][16][17][21][22] making him “a fortune” according to The Wall Street Journal.[2] Universa lost back about 4% in 2009 and 2010 when the S&P 500 recovered by over 40%.[4][5]

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,”[5] 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[10][26] (and for which Spitznagel was subpoenaed by the U.S. Securities and Exchange Commission[5]).

The Dao of Capital and roundaboutness[edit]

In Spitznagel's book The Dao of Capital he coins his investing approach as “Austrian investing” (what some have also called “doomsday” investing,[27] for which, according to Forbes, he has many “copycat” followers[28]), as it is rooted in the Austrian School of economics tradition. The theories inform his notorious very concentrated bearish bets[29][30][31] in his so-called “tail-hedging” funds.[2][4][5][7][10][14][16][17][21][22] Spitznagel has said that he has basically been investing against the Federal Reserve and its monetary policies his entire career.[32]

In his book, Spitznagel (according to Paul Tudor Jones) “champions the roundabout,”[33] referring to the circuitous roundabout of “going right in order to go left,” and specifically referring to the Austrian economics concept of roundaboutness. 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.” His examples range from the military texts of Sunzi and Clauswitz, the ancient Chinese game of weiqi, to forest ecology.[34] Spitznagel wrote that he first came to understand roundaboutness from the words of Austrian conductor Herbert von Karajan: “For the moment, let the others decimate themselves in the Viennese battle of all against all—my time is sure to come and I await it, calm and confident.”[33]

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.[4][5] There, as the youngest trader in the bond pit,[15] 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][2][4][35][36] According to Spitznagel, he “was pretty much brainwashed by the age of 16”[5] 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.”[37]

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,[38][39][40] and criticized the interventionism of Federal Reserve chairman Ben Bernanke (calling him “easily the most significant market manipulator in history”)[41][42][43] and U.S. President Barack Obama.[40]

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).[41] He has also blamed the Fed for increasing wealth disparity, drawing on the works of Mises, Rothbard, and Hayek.[44]

Spitznagel's Austrian positions have made him a target of notable Nobel and Keynesian economist Paul Krugman.[45]

Market predictions[edit]

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,”[37] he has since made other market calls. In July 2009, Spitznagel opened a fund betting on inflation[2][16]—with a Wall Street Journal front-page headline reporting “Spitznagel Bets Reputation on Inflation[2] (after which the price of gold approximately doubled over the next two years, and Spitznagel's fund made 20% annual gains[6]). In June 2011, CNBC reported on a research piece by Spitznagel which predicted a 20% correction in the S&P 500 stock index[46] (and the S&P 500 subsequently lost 20% within four months, as Spitznagel's funds reaped from 20% to up to 10-fold gains[3][47]). In November 2013, Spitznagel called the cryptocurrency bitcoin “scary” and “dangerous,” despite his strong views against fiat money[48] (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).

Tail hedging[edit]

In 1999, Spitznagel and author and financial mathematician Nassim Nicholas Taleb together created the first ever “tail-hedging” fund.[6][15][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[6][27]) at his very successful hedge fund Universa. (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.”[51])

Taleb has said “One thing Mark taught me was that when someone isn't afraid of losing small amounts, they're almost invincible.”[2]

Spitznagel is presumed to employ positions such as out-of-the-money puts on overvalued equities[2][4][6][7] (for example, Lehman Brothers,[52] about which he has responded “It's a regrettable aspect of our trade that we tend to do very well on others' misfortune”[53]), which he regards as primarily a value-driven bullish play on cheapened markets, providing dry powder specifically when asset prices are depressed[6] (making him “the inverse Warren Buffett[25][54] and linking him to the value investing philosophy).

Ironically,[55] 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.”[29]


Spitznagel has been the principal supporter of the U.S. Presidential campaign of (Texas Congressman) Ron Paul, a fellow Austrian economics advocate and libertarian who “shares his contempt for the Federal Reserve.”[54] In 2012, Spitznagel hosted multiple fundraisers (including a party at his Bel Air home[56]) for the congressman.[8][9][25][54] 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.”[54]

Sustainable farming[edit]

Spitznagel owns and operates a 150-year-old farm—Idyll Farms, a pasture-based goat farm and creamery, producing award-winning artisanal chèvre.[57] Located “in the bucolic hills of Michigan,” 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.”[58] 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.[59]

Personal life[edit]

Spitznagel keeps homes in Michigan (including a century-old Lake Michigan compound built by the founder of BorgWarner[33] and a 200-acre farm estate in Northport[4][6][27][60]) 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.[61])

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 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 with weekly training in Chinese Chen-style taijiquan, dodging oncoming taxicabs while skateboarding in New York City's Central Park, and piloting engineless sailplanes over California’s Sierra Nevada[4] (which he since gave up for his instrument-rated pilot's license[6]). Forbes described the “unruffled”, loafered Spitznagel as looking “better prepared for a yacht race than for doomsday.”[24]

Bloomberg reported in 2011 that Spitznagel seeded his family office (Dao Holdings) with $100 million.[4]



  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 g h i j k l m Spitznagel Bets Reputation on Inflation, The Wall Street Journal, June 17, 2009
  3. ^ a b Hedging against disaster even as markets grow calm, Reuters, January 27, 2012
  4. ^ a b c d e f g h i j k l When Black Swans Fly, Bloomberg Markets, November, 2011
  5. ^ a b c d e f g h i j k Profiting from Disaster, Risk magazine, January, 2011
  6. ^ a b c d e f g h Spreading his wings, Absolute Return + Alpha, November, 2011
  7. ^ a b c d e f October Pain Was ‘Black Swan’ Gain, The Wall Street Journal, November 4, 2008
  8. ^ a b Ron Paul Sets Los Angeles Fundraiser, The Wrap, March 4, 2012
  9. ^ a b Ron Paul sets Los Angeles fund-raiser, Reuters, March 4, 2012
  10. ^ a b c Did a Big Bet Help Trigger 'Black Swan' Stock Swoon?, The Wall Street Journal, May 11, 2010
  11. ^ 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
  12. ^ Mr. Volatility and the Swan, The Wall Street Journal, July 13, 2007
  13. ^ a b Flight of the Black Swan, Bloomberg Markets, May, 2008
  14. ^ a b c Taleb's `Black Swan' Investors Post Gains as Markets Take Dive, Bloomberg, October 14, 2008
  15. ^ a b c d e f Universa Investments L.P., firm website
  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 c New Investment Strategy: Preparing for End Times, The New York Times, June 29, 2011
  28. ^ Wall Street's Black Swan Copycats, Forbes, June 8, 2011
  29. ^ a b Spitznagel, The Austrians and the Swan: Birds of a Different Feather. Universa website. May, 2012
  30. ^ Mark Spitznagel: The Austrians And The Swan - Birds Of A Different Feather, Zero Hedge, May 21, 2012
  31. ^ Fed’s monetary credit expansion doomed to fail and lead to stock market crash, says Spitznagel, Hedge Funds Review, June 6, 2012
  32. ^ Why Ron Paul and Mark Spitznagel will not go quietly into the Republican night, KPCC, Southern California Public Radio, July 25, 2012
  33. ^ a b c The Dao of Capital: Austrian Investing in a Distorted World. New York: John Wiley & Sons. September, 2013
  34. ^ Waiting for the next stock market crash, Fortune Magazine, September 25, 2013
  35. ^ Everett Klipp: 'Babe Ruth of the CBOT', Futures Magazine, May 1, 1999
  36. ^ Veteran Trader of the Chicago Board of Trade, Chicago Tribune, January 31, 2011
  37. ^ a b A Hedge Fund Manager Who Doesn’t Mind a Losing Bet, The New York Times, June 29, 2011
  38. ^ Spitznagel, The Man Who Predicted the Depression, The Wall Street Journal, November 7, 2009
  39. ^ Spitznagel, The Role of Capital Has Politicians Confused, Forbes, January 31, 2013
  40. ^ a b Spitznagel, Our Malinvestment In President Obama Will Bring Painful Consequences, Forbes, November 15, 2012
  41. ^ a b Spitznagel, Christmas Trees and the Logic of Growth, The Wall Street Journal, December 23, 2011
  42. ^ Spitznagel, The Fed and the May 6 'Flash Crash', The Wall Street Journal, May 28, 2010
  43. ^ Spitznagel, All About the Benjamins, The Wall Street Journal, March 30, 2011
  44. ^ Spitznagel, How the Fed Favors The 1%, The Wall Street Journal, April 19, 2012
  45. ^ Krugman, Plutocrats and Printing Presses, The New York Times, April 20, 2012
  46. ^ Black Swan: A 40 Percent Correction?,, June 16, 2011
  47. ^ Universa, Pimco Posted Gains on Black-Swan Funds as Market Fell, Bloomberg, August 10, 2011
  48. ^ This Fund Manager Thinks Bitcoin's Value Is Limited, The Motley Fool, November 25, 2013
  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. ^ 'Black Swan' Author Denies Role in Market Meltdown,, May 12, 2010
  52. ^ DealBook, The New York Times, January 29, 2009
  53. ^ Overheard, The Wall Street Journal, February 14, 2009
  54. ^ a b c d Hedge-fund manager Mark Spitznagel to host Ron Paul fundraiser, Digital Journal, March 6, 2012
  55. ^ Is Spitznagel an Apostate?, Falkenblog, June 17, 2012
  56. ^ Look Which Hedge Funder Has His Arms Around Ron Paul, Business Insider, April 22, 2012
  57. ^ 2013 ACS Judging & Competition Results. American Cheese Society website. Retrieved on November 21, 2013.
  58. ^ Feeding the Bubble: Is the Next Crash Brewing?, Der Spiegel, December 3, 2013
  59. ^ Sustainable Agriculture Advocate, Fund Manager Predicts Market Crash, Agriculture Downfall, The Motley Fool, November 8, 2013
  60. ^ Northport's Got Your Goats, Leelanau Enterprise, September 20, 2012
  61. ^ J-Lo and Marc Anthony Sell In Los Angeles to Financier, The Wall Street Journal, January 8, 2010