Odey Admits May Mistakes

Jul 6 2010 | 12:34pm ET

Odey Asset Management chief Crispin Odey admitted he underestimated bonds in May, as his Opus hedge fund fell 7.8%.

Odey was short fixed-income and long equities, the Financial Times reports. But it was bonds that did the advancing in May, and stocks that took a plunge.

“The price action of May for all asset classes was only explicable on the ground that Europe and indeed the world is going to follow Japan into deflation,” Odey explained. “Markets are worrying, in many ways rightly, that with corporate sitting on cash, a fall in government expenditure is not going to be met by a rise in private sector spending and employment. Thus, the market was pricing in a double-dip.”

Odey remains bullish, he said, calling stocks “cheap” compared to other asset classes. Still, he cut his equity exposure to 40% of the hedge fund’s assets, as well as slashing his bond shorts to less than 20%.

“It is highly unusual for a new bear market in equities to begin as profit estimates are being upgraded as they are now,” he said.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


Hedge Funds Swarm Into Palm Beach

Oct 27 2016 | 2:32pm ET

As the first flakes of snow fall on New York's northern suburbs, Dan Weil of South...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...