Wednesday, August 22, 2012

Fortunes to be made off euro crisis…. just not yet



Just wait.  According to Marketwatch you don’t get to be a billionaire hedge-fund manager by giving money back to your investors. So when Louis Bacon, one of the stars of the industry, with a 20-year track record of making stellar returns for his investors, decides that the markets are behaving so strangely even he can’t read them then the rest of us should sit up and take notice.

In deciding to hand back a quarter of the money in his macro fund — about $2 billion in total — Bacon made a telling point. The euro crisis has become so complex and so politicized that it is impossible for anyone to make any money.

But while it’s true that the euro crisis hasn’t yet produced its George Soros or John Paulson — someone who bets against the herd and wins big — that doesn’t mean it won’t in due course. In fact, Bacon has got this one wrong. There will be huge gains to be made by smart investors — but they are still a couple of years down the track....

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