Paul Singer does not buy into the US economic recovery.
He warned investors that the makings of the next financial crises could be underway if investors lose confidence in the federal reserve with their zero rate economic policy. Why listen to Paul Singer?
Well he is one of the most successful investors in the world. His Elliott Management Corp manages $26bn and since 1977 has only lost money in two years.
He recently wrote his investors a letter in which he stated ‘Nobody can predict how long governments can get away with fake growth, fake money, fake financial stability-when confidence is lost, that loss can be severe, sudden and simultaneous across a number of markets and sectors.’
Paul Singer is not the only billionaire to be cautious on the US economy.
Earlier in March this year, we wrote about Seth Klarman (see post here) who also held a cautious tone. While it is very difficult to get the timing of markets right, Paul Singer has been more often right than wrong. Since his hedge fund Elliott Management was started in 1977 his returns were over 13.9% a year, far outpacing the average return of 11.2% (see chart below) for the S&P 500.
NB: Picture credit -Kepler Bloomberg news / Source: Kelly Brit Bloomberg new.
