Paul Tudor Jones ““Cry ‘Havoc!’, and let slip the dogs of war” seems an apt description for this moment”

Paul Tudor Jones feels “like I’m in my 20s again.” In a February 2 letter to investors reviewed by ValueWalk, where he quotes Shakespeare, the well-known hedge fund manager was documenting his thoughts just as the jaws of what might be considered the oddest market correction in history were about to clamp down. Those involved in creating volatility products that imploded bore no financial responsibility, but investors who operate under short time horizons found themselves playing an unfamiliar game where traditional economic correlations went bust.

The letter was wide-ranging and addressed numerous meaningful topics. But at a time when the VIX index can increase in value and break its price correlation ratio with the underlying S&P 500 that it tracks, as well as S&P 500 volatility diverging from small-cap markets — the world is changing in very odd ways. From one angle, Jones sees the historical perspective of how these algorithmically driven markets and manipulations have subsumed what it means to manage money during and after volatility. But Jones sees change coming, which might even benefit his macro trading outlook again.

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About the Author

Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)valuewalk.com