Thursday, 21 August 2014
Last updated 7 hours ago
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.
Aug 4 2014 | 7:42am ET
By now, U.S. and international subscribers have received their home or office delivery of the special 500th issue of Futures magazine. You can too!—a very special offer follows. The issue is the largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders. Read more…
The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.
The Alpha Pages Editor's Note