Barton Biggs, the former chief global strategist for Morgan Stanley, who warned three years before the crash in dot-com companies that stocks were too expensive, has died, the bank said Monday. He was 79.

Morgan Stanley CEO James Gorman confirmed Biggs' death in a memo to employees. A bank spokeswoman told The Associated Press that Biggs died after a short illness.

Biggs co-founded one of the first hedge funds, Fairfield Partners, in 1965, Gorman said. Biggs joined Morgan Stanley in 1973 and founded Morgan Stanley Investment Management in 1975. He served on the bank's board until 1996.

Biggs retired from Morgan Stanley in 2003 and formed another hedge fund, Traxis Partners.

In 1997, during a long bull market for stocks, Biggs said: "Deep in the American psyche, along with motherhood, apple pie and the flag, is the belief that stocks are fabulous investments and that if you hold them long enough you can't lose."

He warned, though, that stocks in most parts of the world were already "very expensive."

In a speech in Tokyo on Jan. 21, 1999, Biggs predicted that a spectacular rally in Internet stocks would "come to a very bad end." The warning was credited with pushing the Dow Jones industrial average down 71 points that day.

The most widely watched measure of technology stocks, the Nasdaq composite index, peaked on March 10, 2000, before losing almost 80 percent of its value over the next two and a half years.

Gorman said in the memo to Morgan Stanley employees that Biggs "left an indelible mark on our business, our culture and our shared notion of leadership at Morgan Stanley."

"He was known as an independent thinker, colorful writer and one of the pioneers of emerging markets investing," Gorman wrote, "and our firm benefited from his vision."

Biggs graduated from Yale University and served as an officer in the Marine Corps. He was the author of three books, "Hedge Hogging," ''Wealth War & Wisdom" and "A Hedge Fund Tale of Reach and Grasp."

Biggs was survived by a son, two daughters and nine grandchildren, and memorial information was not available, Gorman said.