Hedge Fund Manager Kyle Bass Says "Greatest Trade Ever" Will be Japan, Coming Debt Crisis Will Result in Huge Shifts of Wealth in U.S., Europe
Opalesque, the world's largest subscription-based publisher covering the alternative investment industry, has launched the 31st issue in a series of regional roundtable forums - the inaugural Opalesque Texas Roundtable. The 29 page Roundtable publication can be downloaded for free at: http://www.opalesque.com/RT/RoundtableTexas.html.
In this Roundtable, Kyle Bass, one of the handful money managers who correctly identified the subprime meltdown, adds a lot of scary details and color to his current investment thesis of a Keynesian end that awaits Greece, Japan and the “Club Med” (Italy, Spain), with the U.S. not be far behind. Bass says he is “not contrarian for contrarian sake” and he “can't wait to be long” - after this secular crisis has been overcome through debt restructures.
Bass says politicians have front row seats to observe and reflect on Japan, which is “the best opportunity I have ever seen in my life. It is the most convex opportunity I have ever seen. If you take the time to look at the numbers, you realize why they have had seven finance ministers in three years, five in the last year-and-a-half. The whole scenario is playing out exactly as you would expect it to play out, right under everyone's nose, and no one says a word about it....”
However “Real Assets” aren't the Panacea – what most investors miss
This Roundtable is a thrilling discussion between (global) macro scenarios and equities-centric investment approaches that may leave countless investors with bloodless net returns, deceived by “attractive valuations” while real assets could end up ruling supreme and radically changing the distribution of wealth of nations, individuals and institutions. “Let me clarify that I am not proclaiming some sort of 'end of the world.' What I am talking about is a complete change in the wealth of people in different nations. Everyone will get up and go to work the next day, we will just be poorer,” says Bass.
In such inflationary or hyper-inflationary scenarios, usually real assets are viewed to be the save haven. But what is a real asset? How safe is your Gold ETF or futures and futures options on precious metals really, when you compare open interest against the registered and eligible inventories behind those instruments?
This Roundtable further covers:
l Overview on the Texas hedge fund industry: inflows, structure, upcoming managers
l Texas is different: Why emerging hedge fund managers can get meetings with Texas billionaires
l Quantitative, qualitative, or the “blink”-effect? How Texas investors and family offices select managers
l Why do so few investors have permanent allocations to CTAs and managed futures, and what is the price for that?
l With no state income tax and relatively healthy state finances (unlike any other state, Texas is blessed with a $9 billion slush fund), local managers expect an influx of colleagues from other states where top marginal rates may get close to 60%.
This inaugural Opalesque Texas Roundtable was sponsored by the CME Group. We also thank the Opalesque 2010 Roundtable Series Sponsors Custom House Group and Taussig Capital for their support, as well as Akin Gump for providing the meeting venue for our team:
l Kyle Bass, Managing Partner, Hayman Capital
l Don Hodges, Founder, Hodges Capital Management
l Shaun Jordan, Director, Abraham Trading Company
l Craig Caudle, CEO and Principal, Liberty Funds Group
l Terry Beneke, CIO, Antares Capital Partners
l Guilllermo de León, Manager of Investments, Salient Partners
l Barry Greenberg, Executive Director Texas Hedge Fund Association, Partner, Akin Gump
l Rick Redding, Managing Director, CME Group
Matthias Knab, founder of Opalesque and internationally recognized expert on hedge funds and alternatives, moderates the Opalesque Roundtables.
The Roundtable can be downloaded for free at: http://www.opalesque.com/RT/RoundtableTexas.html.
All other previously published Opalesque Roundtable Scripts can be accessed here:
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Uday Pratap Aditya