Action by governments and central bankers has convinced investors that risk “has simply vanished”, says value investor Seth Klarman, founder of the Baupost hedge fund, in his latest letter to investors, quoted in the Financial Times.
Klarman has long been a critic of the Federal Reserve’s loose monetary policies, which he believes have badly undermined “the market’s usual role in price discovery... With so much stimulus being deployed, trying to figure out if the economy is in recession is like trying to assess if you had a fever after you just took a large dose of aspirin”.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
That said, while Klarman may feel that the investment environment is hostile, his fund has still been putting money to work. In the third quarter of 2020, Baupost invested $400m in a “special purpose acquisition vehicle” (a cash shell, effectively) launched by fellow hedge-fund manager Bill Ackman, with the goal of investing in “mature unicorns” – private companies valued at between $10bn and $15bn.
-
Twice as many taxpayers targeted in HMRC capital gains tax crackdown – could you be next?A rise in the number of capital gains tax penalties follows significant cuts to tax-free allowances, catching more taxpayers out
-
State pension to rise 4.8% in April under triple lockThe full new state pension is set to reach £12,548 a year, reflecting the 4.8% wage growth measured under the triple lock. The bumper boost will raise questions about fairness and sustainability, while more pensioners could be hit with a tax bill
-
Albert Einstein's first violin sells for £860,000 at auctionAlbert Einstein left his first violin behind as he escaped Nazi Germany. Last week, it became the most expensive instrument not owned by a concert violinist
-
Who is Rob Granieri, the mysterious billionaire leader of Jane Street?Profits at Jane Street have exploded, throwing billionaire Rob Granieri into the limelight. But it’s not just the firm’s success that is prompting scrutiny
-
Emerging markets boast top-quality growth stocks at bargain pricesOpinion Lim Wen Loong, investment director at Ashoka WhiteOak Capital, selects three growth stocks where he’d put his money
-
Beware the bubble in bitcoin treasury companiesBitcoin treasury companies are no longer coining it. Short this one, says Matthew Partridge
-
Klarna leads a financial revolution – should investors buy?Klarna has ambitions to rewire the global payments system and has huge growth potential
-
New faces don’t solve old problems – why strategy also matters when it comes to investment trustsOpinion Changing managers often fails to boost a trust’s performance, says Max King
-
How to profit from silver’s record riseSilver often lets investors down, but there may now be room for further gains, says Dominic Frisby
-
Are venture-capital trusts worth investing in?Venture-capital trusts are a tax-efficient way to invest in early-stage companies. But are they worth the risk?
