Odey European MAC was down 1.3 percent in the month of August, finishing eight months of the year up 18.8 percent, according to a fund report seen by ValueWalk. The fund manages $900 million, whereas Odey Asset Management looks after $9.7 billion in assets, which include its wealth management business.

Crispin Odey

Down months are not a usual thing for Odey’s funds, which have managed to gain handsomely through most phases of the market. OEI MAC invests in the master fund Odey European Inc. (AUM $2.1 billion), Odey European is up 18 percent for the year after adding a +4 percent return in the first two weeks of September.

OEI MAC mainly lost in its long equity book, which was down -3.5 percent in August. The fund gained in Pendragon PLC (LON:PDG), Sports Direct International Plc (LON:SPD), Sky Deutschland AG (FRA:SKYD) (ETR:SKYD), while losing in Delta Air Lines, Inc. (NYSE:DAL), United Continental Holdings Inc (NYSE:UAL) and Tesoro Corporation (NYSE:TSO).

Bernanke is Crispin Odey’s key to optimism

Crispin Odey has been a strong supporter of Bernanke and was therefore relieved when the Chairman said ‘no taper’ last month. Odey talks about the dangers that the end of QE3 could bring to the developed and emerging markets and how just the indication that a taper was in the books had thrown bond markets into trouble.

Odey calls Bernanke his “key to optimism” and says that he has restarted the U.S. financial system alone with little support from the “mathematically minded economists” in the Federal Reserve. Odey points out that Bernanke has shifted the focus back on what the economy is actually doing rather than what is happening with QE. Odey says that the U.S. economy has to achieve a 4 percent growth in the next year, because stock markets are already overbought and investors have been shaken by the recent ups and downs of the market, concluding that:

“At least Fed policy is again understandable. Interest rate rises will be late and will come after inflation has picked up. I would have preferred that Bernanke and the world had not had to put up with the mathematicians taking over for six months.”

Odey now shorting Volkswagen

Interestingly, this time OEI MAC mentions a short in Volkswagen AG (OTCMKTS:VLKAY) (ETR:VOW) (FRA:VOW), which was profitable for the fund in August; shares were down 3 percent in that period. This is strange because the flagship Odey European had a long in Volkswagen until April of this year. We have mentioned Odey’s long bet in Volkswagen AG (OTCMKTS:VLKAY) (ETR:VOW) (FRA:VOW)  in context of the slowing car sales in Europe, and it seems the fund has reversed its thesis on the German automaker. OEI MAC has shorts in other names in the European auto industry as well, including Peugeot SA (OTCMKTS:PEUGY) and (EPA:UG), Fiat S.p.A. (OTCMKTS:FIATY) (BIT:F). The fund was down in Peugeot short in August, however, Fiat is not mentioned in the current performance update.

Take a look at how Chrysler’s IPO could affect shorts in Fiat.

Other positions that OEI MAC lost in the short book were salesforce.com, inc. (NYSE:CRM) and Kazakhmys plc (LON:KAZ) (HKG:0847), whereas the short in Aberdeen Asset Management plc (LON:ADN) was up in August.