Mark Spitznagel (; born March 5, 1971) is an American investor and hedge fund manager. He is the founder, owner, and chief investment officer of Universa Investments, a hedge fund management firm based in Miami, Florida.Universa Investments L.P., firm website
He is known as a pioneer in so-called "tail-hedging"Tail-Risk Hedge Pioneer Spitznagel on Safe Havens, Keynote address, Bloomberg Invest New York Summit, June 7, 2017 or "black swan" investing, an investment strategy intended to provide "insurance-like protection" against stock market crashes.
Early life and education Spitznagel has a graduate degree in mathematics from the Courant Institute of Mathematical Sciences at New York University and an undergraduate degree from Kalamazoo College.
When he was 16 years old, Spitznagel was apprenticed by 50-year veteran corn and soybean trader Everett Klipp.Patterson, Scott. Spitznagel Bets Reputation on Inflation, The Wall Street Journal, June 17, 2009Veteran Trader of the Chicago Board of Trade, Chicago Tribune, January 31, 2011 Spitznagel became an independent pit-trader at the Chicago Board of Trade and later a proprietary trader at Morgan Stanley in New York.Meet Mark Spitznagel, the Investor Behind Universa’s Big Gain, The Wall Street Journal, August 31, 2015
In 1999, Spitznagel and author and financial mathematician Nassim Nicholas Taleb (who was Spitznagel's professor at NYU) established the Empirica Capital "tail-hedging" fund.Malcolm Gladwell, Blowing Up , The New Yorker, April 29, 2002Malcolm Gladwell, What the Dog Saw: And Other Adventures. Little, Brown and Company. 2009
Investment career In 2007, Spitznagel founded the hedge fund Universa Investments, where he is the Chief Investment Officer; Universa offers a type of insurance against extreme market risk.Mark Spitznagel beats drum for tail risks as markets stall, Financial Times, May 16, 2016 Taleb has been associated with Universa as an advisor for nearly two decades.
In 2018, The Wall Street Journal reported that "a strategy consisting of just a 3.3% position in Universa with the rest invested passively in the S&P 500 had a compound annual return of 12.3% in the 10 years through February (2018), far better than the S&P 500 itself" (and portfolios with "more traditional hedges").Triumph of the Market Pessimists, The Wall Street Journal, September 21, 2018
Moreover, "Universa was among a handful of funds that made huge gains" during the 2008 financial crisis.
In 2010, it was alleged that a large trade by Spitznagel in the minutes leading up to the 2010 Flash Crash (when the Dow Jones Industrial Average lost over 9% of its value during the day) was among its primary triggers.Did a Big Bet Help Trigger 'Black Swan' Stock Swoon?, The Wall Street Journal, May 11, 2010
Investment approach Spitznagel's self-described investment strategy is focused on risk mitigation in portfolio construction, and is intended to allow his clients to take more systematic risk. In general terms, he does this by owning far out-of-the-money put options on stocks. He has called "investing Übermensch" Friedrich Nietzsche's slogan "amor fati"—or the love of one's fate—"the secret to successful investing".Amor Fati, (Universa website), January 2019
Spitznagel is dismissive of Modern Portfolio Theory, and specifically its emphasis on correlations and mean-variance (or Sharpe ratios),Future Financial Crises Will Be Deeper, Universa's Spitznagel Warns, Bloomberg TV, September 14, 2018Universa's Spitznagel on Fed Policy, Hedge Funds and Insuring Market Risk, Bloomberg TV, February 5, 2019 and skeptic of market forecasts, although, according to a New York Times article, he predicted two market routs in the 2000s, first in 2000 and then in 2008,A Hedge Fund Manager Who Doesn’t Mind a Losing Bet, The New York Times, June 29, 2011 as well as the "2000s commodities boom".
He has described what he does as lowering what he calls the "volatility tax" paid by investors—"the hidden tax on an investment portfolio caused by the negative compounding of large investment losses."The Volatility Tax , (Universa website), February 2018 He detailed in an investor letter how "mathematically, it is the rare big loss, not the frequent small losses, that matters most to long-run compounding," and called the Swiss mathematician and physicist Daniel Bernoulli "Universa's Patron Saint".Spitznagel, Universa Decennial Letter: What’s Past is Prologue, March, 2018
Spitznagel wrote a book in 2013 titled The Dao of Capital: Austrian Investing in a Distorted World about the Austrian School of economics and its ostensible application to investing.Black Swans Are A Myth, Government Intervention Is The Only Black Swan, Forbes, August 21, 2013 Paul Tudor Jones said of Spitznagel's book that it "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'."The Dao of Capital: Austrian Investing in a Distorted World. New York: John Wiley & Sons. September, 2013
Political and economic views As a libertarian and advocate of Austrian economics, Spitznagel has been very critical of central bank monetary interventionism. For instance, he has written pieces on Ludwig von MisesSpitznagel, The Man Who Predicted the Depression, The Wall Street Journal, November 6, 2009 and about the Fed's alleged culpability for "increasing wealth disparity",Spitznagel, How the Fed Favors The 1%, The Wall Street Journal, April 19, 2012 which focused on the economic distortions that ostensibly result from money creation.
In his book and in a 2015 op-ed, Spitznagel connected every similar high point in the Tobin's Q-ratio since 1900 with past monetary interventionism and subsequent stock market losses, which he called "perfectly predictable, by economic logic alone."Spitznagel, The Myth of Black Swan Market Events, The New York Times, February 13, 2015
Along with entrepreneur Peter Thiel, Spitznagel was a major supporter of the 2012 Republican presidential campaign of U.S. Congressman Ron Paul, a friend and fellow libertarian who "shares [Spitznagel's] contempt for the Federal Reserve"Hedge-fund manager Mark Spitznagel to host Ron Paul fundraiser, Digital Journal, March 6, 2012 and his desire for a non-interventionist foreign policy.Americans Must Choose Non-intervention For Peace and Prosperity, Mises Institute Spitznagel was also senior economic advisor to the 2016 Republican presidential campaign of Ron's son, U.S. Senator Rand Paul.Hedge fund manager Mark Spitznagel to advise Rand Paul, CNBC, June 20, 2015
Spitznagel has not been optimistic about the tariffs President Trump has instituted, calling the plunge in April 2025, "a trap."
Personal life Spitznagel is among the many financial executives and hedge fund managers who moved their residence and operations to Florida.More investors leaving U.S. northeast for Florida, Reuters, September 13, 2016 In 2014, he moved his hedge fund offices from Los Angeles to Miami, citing Florida's "more hospitable business and tax environment" than California's.Spitznagel’s Universa Moves To Miami , FINalternatives, Feb 19, 2014 There is no income tax or estate tax in the state of Florida.
According to The Wall Street Journal, Spitznagel splits his time between his Miami office and Michigan, where his family lives.
He and his wife built, own, and operate Idyll Farms, a farm in Michigan that pastures dairy goats and produces artisanal chèvre. A Bloomberg article claimed that the farm is making "some of the best goat cheese in America".Zimberoff, Larissa. A Hedge Fund Pioneer Is Making Some of the Best Goat Cheese in America, Bloomberg Pursuits, November 7, 2017
Spitznagel also reportedly flies planes and practices ashtanga yoga.
See also Black Swan fund
References