Hugh Hendry of Eclectica is one of the more articulate and closely followed hedge fund managers in the world today. Until today, he was also one of the more bearish managers too.
“I can no longer say I am bearish,” said Hendry today according to InvestmentWeek. “When markets become parabolic, the people who exist within them are trend followers, because the guys who are qualitative have got taken out.”
Speaking at the Harrington Cooper conference, Hendry argued that an ongoing currency war between the U.S. and China will continue to force the Federal Reserve to keep monetary policy loose and easy.
“I may be providing a public utility here, as the last bear to capitulate,” he said. “You are well within your rights to say ‘sell’. The S&P 500 is up 30% over the past year: I wish I had thought this last year.”
Hendry sounded pretty crestfallen. Here’s more from InvestmentWeek:
“I have been prepared to underperform for the fun of being proved right when markets crash. But that could be in three-and-a-half-years’ time.”
“I cannot look at myself in the mirror; everything I have believed in I have had to reject. This environment only makes sense through the prism of trends.”