Hugh Hendry said that he would buy online virtual currency Bitcoin if it was feasible by his fund. Hendry, who bought 3D printing stocks as a play on trend-driven, QE-fueled equity markets, believes that the rise in Bitcoin amounts to “the same thing,” says a report from Investmentweek.
Bitcoin is following a rising trend
All the 3D printing stock listed in the U.S. stock exchange are trading at 50 times earnings, but Hendry is not concerned with the over valuations of such stocks.
Speaking at a Harrington Cooper conference, Hendry said “We are in 3D printing stocks. I say to my team ‘don’t tell me the valuations, it is trending’.” At the conference, Hendry also revealed he is no longer bearish.
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According to Hendry, he will not hesitate to buy Bitcoin if it is available on a regular exchange. Recently, Bitcoin surged to over $1,000 per coin for the first time ever. Hendry added that in this scenario, Bitcoin can touch $1 million. Although there are no qualitative reasons to support this uptrend the currency is just going following the trend. He said that owning 3D printing stocks or Bitcoin is almost the same.
Policy outweighs fundamental factors
Hendry said that the fundamental factors of the equity market do not hold any importance when policy is skewed.
“There is no point arguing about the one-way causality we [as an industry] believe determines our processes. That is all about a belief this is rational.”
Talking about a common belief, Hendry said that the market is moving higher because the economy is and corporate cash flows are improving, but when there are monetary disturbances in recurring mode, it hardly matters.
He said that hedge fund managers are more concerned about developments in China, but trend driven investors can also trade effectively in Chinese stocks.
“You could go long consumer discretionary or long Chinese internet stocks, and hedge out the beta,” Hendry said.
Hendry Eclectica’s August performance
Hendry played short on the Rupee as the hedge funds managed by him performed almost flat in August. Losses in equities were compensated by profits from shorting EM currencies. Hendry’s Eclectica fund gained 75bps from short EM currency and equity trades. In Japan, where equities dropped after an impressive run in the beginning, the fund managed to gain a modest 2bps from re-entering long positions in late August. Form the short Chinese equity index trade, the fund made a marginal loss, but gained 14bps from Korean interest rate positions.