Paul Singer, founder of Elliott Management, a major hedge fund and “legendary predator,” warned that a repeat of the 1970s-like inflationary spike is possible, but few people are prepared for it.
Singer, who has been critical of U.S. monetary policy in the past, said in an interview that “trillions and trillions” of dollars of stimulus spending to fight the Epidemic, combined with upward pressure on wages and interest rates at very low levels could cause Inflation to heat up sharply and have the opportunity to shake the market.
He also believes that in the relatively near future, the market has a good chance of unexpected developments, when there will be a very significant and dramatic adjustment in bond prices.
Singh described holding long bonds at current yield levels as “meaningless” because no investment institution can achieve the goal of holding these bonds, i.e., not playing the role of a hedge against the equity portfolio. He further explained that when investors buy bonds with no yield, it is difficult to make money unless the interest rate is further reduced from zero to negative 5 or 10 percent, but said it is speculative activity rather than investment.
Singh since 1977 Elliott founded, has been the investment market’s long-running victory, only had two years of losing money record, the average annual return of 13%, up 12.7% last year, the performance of the hedge fund industry.
Singh has always focused on investing in distressed assets, Elliott is known as the “vulture funds”. The most impressive is that he and the Argentine government on the bond investment lawsuit for more than 10 years, and once asked the court to seize the foreign visit of the Argentine warships, and finally forced the country to default on its debt and compromise.
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