• February 4, 2023

‘Head-smacking craziness’ has reached new heights in today’s markets, says hedge-fund billionaire Paul Singer


“We believe that, in hindsight, the champion of insane madness on the American stock market will be the time that is right now.”

This is billionaire Paul Singer of Elliott Management, who in a letter to clients dated Jan. 28, suggests that the stock market has pretty much skipped the shark reported from Bloomberg on Friday.

Shares on Friday We ended a bloody week of heavy losses as interest rates rose slowly and then suddenly. Investors also fear high valuations across everything from what are known as meme stocks, those of investors who focus on Reddit, to bonds that may be higher with increased inflation expectations.

Long-term US Treasuries saw the largest monthly return gain since 2016, which meant prices for risk-free fixed income bets were hammered. And investors fear that the Dow Jones Industrial Average
DJIA, -1.50%,
the S&P 500 index
SPX, -0.48%,
and the soaring and technology-driven Nasdaq Composite
COMP, + 0.56%
You face a difficult path as higher lending rates make speculative stocks less attractive.

In any case, Singer believes the market is out of whack and warns against betting on Bitcoin
BTCUSD, + 5.92%
and esteemed companies like electric vehicle maker Tesla Inc.
TSLA, -0.99%,
Ultimately, judged by an investment mob, he and his team at Elliott will declare, “We told you.”

Bloomberg reported that Elliott Management, which is focused on the Pandemic stock market crash She made money far earlier than other investors every month in 2020, even during the March carnage. Equity benchmarks hit their lowest point of the year on the 23rd of this month.

Elliott, who manages more than $ 40 billion, posted an annual gain of around 13% over his 44 years, outperforming the S&P 500 index. Singer’s net worth is now $ 3.6 billion. according to Forbes.

Already before the emergence of the coronavirus-borne disease COVID-19Singer had prepared for a major market slump. In 2017, he raised $ 5 billion for a rainy day fund to prepare for what he described in a letter as a time when “all hell” breaks loose. Back then, the market was calm and persistent, partly due to investors’ propensity to buy leveraged VIX
VIX -3.25%
Products and treat market downturns as opportunities, until that trade imploded.

It is unclear what Hell looks like for Singer now, but it is evident that he himself maintains an unfavorable outlook for the economy and the market as vaccine rollouts and Pandemic Aid Legislation The prospect of a solid recovery from the worst pandemic in over a century is more likely.

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Jack

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