At each crisis, each crash, each speculative bubble or total jamming of the financial machine, they respond present. The underdogs. The soothsayers, who swim against the current and warn of the next shifts. Those who make premonitory bets. As financial markets enter 2023 with the same guideline as 2022, a hedge fund by the name of Contrarian Macro Fund made the new heist of the century.
Faced with the collapse of the financial markets, its yields reached 163%. An annual report that alerted Bloomberg and brought Neal Berger, the founder of the Eagle’s View Management fund, to the fore. It was he who, last year, decided to create another hedge fund in parallel, to concentrate on the downward movements that he saw coming with full nose. At first, he played with his own funds. Then he started accepting money from outside.
As a result, the Contrarian Macro Fund now manages over $200 million. It was integrated into Eagle’s View, which manages $700 million. To make their success, they obviously bet low. On many stocks and bonds the most prone to what he presaged: much more than a transitory element, coming out of confinement, as politicians and central banks in particular thought. The collapse of technology stocks, in particular, has taken place and companies like Apple have lost more than 1000 billion dollars in capitalization.
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The signs that tipped him off
“The $19 trillion in sovereign debt trading at negative yields, the SPAC boom, the crypto boom, private equity valuations and private equity valuations, are all bands of the same zebra”, investor Neal Berger told Bloomberg. According to him, the whole market had been distorted by years of monetary stimulus where interest rates and helicopter money led to massive speculation. Just look at Tesla, which has just been overtaken today by LVMH and Nvidia in the ranking of the biggest valuations, and which has lost nearly 70% over one year.
In his testimony, the American pointed the finger at other funds and investors, continuing to dig their losses to bet on the rise by distinguishing signs of optimism. “You have your variations, your rallies of the day, from month to month. But overall, everything is falling apart”, he warned. However, he acknowledged that he had, with his fund, hedges in the event of upward movements on the markets, whether in Europe or the United States. “The pain is not over yet”he added as he counts with his hedge fund “keep his bets low for years to come”.
Since the crisis of subprime in 2007 it became commonplace to refer to the book and the film The Big Short (“Le Casse du Siècle” in French), to talk about the stories of investors betting against the market. Those who had bet against the loan rates on Wall Street, like the now famous Michael Burry, had won more than $800 million. His name had returned to the front of the stage with GameStop, while a downward position following the WallStreetBets affair had allowed him to pocket $ 270 million.
