Kyle Bass Eyes 200-to-1 Leverage for New Bet on Hong Kong Crash (Bloomberg)
Kyle Bass is going for broke on a currency trade that has burned bearish speculators for more than three decades. The Dallas-based founder of Hayman Capital Management is starting a new fund that will make all-or-nothing wagers on a collapse in Hong Kong’s currency peg, people with knowledge of the matter said. Bass, best known for his prescient bet against subprime mortgages before the 2008 financial crisis, will use option contracts to leverage the new fund’s assets by 200 times, the people said, asking not to be identified discussing private information. While the strategy is designed to generate outsized gains if Hong Kong’s currency tumbles against the dollar, investors stand to lose all their money if the peg is still intact after 18 months.
3 Lessons From Bill Ackman That Every Investor Needs in the Coronavirus Era (The Motley Fool)
Fearing a material decline in the markets as concern mounted about the health and economic impacts of the COVID-19 pandemic, activist investor Bill Ackman considered liquidating the entire portfolio of Pershing Square Holdings (LSE:PSH). But instead of selling all the hedge fund’s holdings for the first time in its history, Ackman made a big bet on a hedging strategy in late February that turned $27 million in premiums and commissions into $2.6 billion. Instincts like this, and a history of controversial bets, have helped Ackman amass a fortune worth more than $1.6 billion. He’s clearly an investor worth listening to, and some of his wise words in a recent letter to Pershing investors provide important guidance for those putting their money into the markets amid the turbulence of the coronavirus era. Here are three things Ackman told shareholders that every investor should think about.
After Dumping Warren Buffett and Berkshire Hathaway, Ackman Says His Hedge Fund is Up Big (Fox Business)
William Ackman’s hedge fund is boasting double-digit gains at a time many portfolios have sunk along with the economy during the coronavirus pandemic, after the billionaire investor plowed cash into a number of companies he already owned and dumped Warren Buffett‘s Berkshire Hathaway among other stocks. The public and private funds at Pershing Square Capital Management have gained between 22 percent and 27 percent this year, handily beating both the Standard & Poor’s 500 index and the average hedge fund which are each off percent since January, Ackman said.
‘Washed Up’ Warren Buffett has Supposedly Lost a Step. The investor has Scored an $11 Billion Gain on Apple this Year. (Business Insider)
Warren Buffett has been a popular punching bag in recent weeks, even though the famed investor’s biggest holding – accounting for more than 40% of his portfolio – has gained $11 billion in value this year. President Donald Trump said Buffett made a mistake when he sold his airline stocks in April. Billionaire investor Ken Fisher suggested the 89-year-old’s age might explain why he didn’t go on a buying spree during the coronavirus sell-off.
Healthcare is Good to Have (Hedge Nordic)
Stockholm (HedgeNordic) – After a rough start to 2020, Rhenman Healthcare Equity L/S gained about 30 percent so far in the second quarter and broke into positive territory for the first time this year. The healthcare-focused, long-biased long/short equity fund managed by Henrik Rhenman and Susanna Urdmark is up 2.6 percent year-to-date through the end of May after gaining 10.9 percent last month and 17 percent in April. May was another fantastic month followed by a great April,” Urdmark says in a monthly interview with Henrik Mitelman. The main share class of Rhenman Healthcare Equity L/S was up 2.6 percent in the first five months of 2020, “which we are quite happy about” considering that world equity indices were down about nine percent during the same period. “Surprisingly, it has been biotech and growth stocks that have been driving this development in performance,” explains Urdmark. “If we look at how the different sub-sectors have contributed to performance, biotech is the biggest contributor to this development.”