“We think that in retrospect, the champion of the astonishing craziness in the US stock market will be the period that is unfolding now.”
That’s Elliott Management billionaire Paul Singer, who suggests the stock market has pretty much taken a leap forward, in a Jan. 28 letter to clients, as reported by Bloomberg on Friday.
Stocks on Friday covered a tough week of sharp losses as interest rates saw a slow and then sudden price rise, with investors also worried about high valuations in everything from so-called meme stocks, which were hit higher by investors flocking to Reddit were, to bonds, that may be facing high inflation expectations.
Long-term US Treasuries posted their largest monthly yield gains since 2016, meaning the prices of risk-free fixed-income bets soared. And investors are concerned that the Dow Jones Industrial Average DJIA,
the S&P 500 index SPX,
and the high-flying and technology-powered Nasdaq Composite COMP,
faces a difficult road as higher interest rates on loans make speculative stocks less attractive.
In any case, Singer believes the market is not good and warns that betting on bitcoin BTCUSD,
and highly regarded companies such as Tesla Inc. TSLA, electric vehicle manufacturer,
defended in his assessment by an investment march, will eventually have him and his team at Elliott declare, “We already told you that.”
Bloomberg reported that Elliott Management, which braced itself for the pandemic stock market crash much earlier than other investors, was making money in every month of 2020, even during the March massacre. The equity benchmarks hit the low of the year on the 23rd of that month.
Elliott, which manages more than $ 40 billion, has recorded annual gains of about 13% in its 44 years, beating the S&P 500 index. According to Forbes, Singer’s net worth is $ 3.6 billion.
Even before the arrival of the coronavirus-borne disease COVID-19, Singer had been preparing for a major market drop. In 2017, he raised $ 5 billion for a rainy day fund in preparation for what he described in a letter as a time when “all hell” is breaking loose. At the time, the market was in a period of dormancy and remained stubbornly vigorous, partly due to investors’ propensity to buy leveraged VIX VIX,
products and see market dips as opportunities until that trade imploded.
It is unclear what hell now looks like for Singer, but it is clear that he has less favorable outlook for the economy and the market, even as vaccine rollouts and pandemic legislation hold the prospect of a solid recovery from the worst pandemic. more likely in more than a century.