What do Daniel Loeb and Bill Ackman have in common? Both are well known for their hedge fund activist investing. Loeb in the ensuing years has transitioned from activist to macro hedge fund manager; evident from his stellar return in Greek government bonds and most recently, from the Japan trade (initial currency/index trade). Ackman, despite his recent hiccup in few investments such as J.C. Penney (NYSE:JCP
) and Herbalife (NYSE:HLF
), had also dabbled in macro investing such as in Hong Kong dollar back in 2011. As Ackman put it recently, “The current printing of money is a 'non-sustainable' situation." Hong Kong should adjust is currency peg, he said, and he has a small position essentially shorting it.
There is no such thing as an unblemished track record, unless you run a Madoff scheme. Interestingly, while Loeb is short JPY and long JPY index/selected stocks, Kyle Bass
has dubbed anyone who is long JPY stock is a “macro tourist.” Bass has taken a short position in Japanese Government Bonds (JGB) since 2010. It remains to be seen if the widow-maker trade will eventually pan out. Nonetheless, as George Soros
succinctly puts it, "It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong." Continue Reading »