Crescat Capital says buy gold, sell stocks in ‘trade of century’


According to Crescat Capital, gold must be bought and shares sold in the “commerce of the century”. One of the hedge funds with better results last year says that the “trade of the century” is to buy gold and sell shares since the risk assets are due to another collapse.

In this way, Crescat Capital LLC suggests that it is only a matter of time until the bearish bet yields great results. While the Denver-based firm has only about $ 50 million under its management, it has a history of exceeding the S & P 500 index, with its Global Macro Fund, which gained 41% last year alone. Likewise, the investment company says it is ready to capitalize on an end of the economic cycle since the indicators warn that a recession is imminent in the coming quarters.

Hedge fund strategy

It is necessary to mention that the long term of gold in terms of yuan and the reduction of global shares currently explains three quarters of the hedge fund strategy. While the firm uses the MSCI World Index in models to visualize trade, it goes a little deeper with its short position, selecting individual stocks and exchange-traded funds to bet against. Likewise, the last two times that the credit markets had such a high distortion, asset bubbles began to fall apart shortly thereafter.

Now, among the warning signs, Crescat cites the corporate executives who are currently selling shares in hand, indicating a potential bubble burst. At the beginning of 2017, those investors sold shares while the S & P 500 continued to rise. That happened again in 2018. With the smart money selling once again, “the third time should be the charm of the stubborn US market”, at least that’s what Crescat expressed to customers.

Likewise, Tavi Costa, Crestat’s global macro analyst, assured by telephone that the consensus points to a recession in 2020 or 2021, “We think it is much closer than that and we have a series of macro timing indicators that we observe”.

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Source: Bloomberg News | MINING

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