Looking at the market from the standpoint of logical economic correlations can, at times, be frustrating. As CNBC’s Rick Santelli noted this morning, bond yields, historically correlated with the US dollar index as an indicator of economic health, have been exhibiting odd correlation patterns of late. Into this correlation morass walk’s Horseman Capital Management’s Russell Clark. The often independent voice, not afraid to call out conformist thinking, is looking at shopping mall real estate investment trusts (RIETs) and points to a troubling correlation with stock market crashes. If nothing else, be careful investing in shopping mall REITs at this moment in history, he warns.
2016 was a troubling year for Horseman, turning in -24.03% performance and nearly matching the fund’s worst performance in history, losing -24.72% in 2009. One of the world’s most bearish hedge fund managers has been doing what is among the more inconsistent accomplishments in the history of hedge funds: predicting the exact moment when a stock market crash is coming. It has been done to an extent, of course. But calling the exact moment the market hits a major top is difficult, but when it has been done it is done based on cold nonemotional logic.
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