Crispin Odey clocked losses to the tune of 18.1 percent for the year, according to a recent piece in the FT.
September was a particularly challenging year for the founder of London based Odey Asset Management where the fund lost 12.7% in September.
“Crispin Odey clocked losses to the tune of 18.1 percent for the year, according to a recent piece in the FT”
Crispin Odey clocked losses were primarily due to a rapid rotation out of top-performing stocks into oversold value stocks
Value stocks are those that trade below the intrinsic value of the company. If the market price is below the value of the company as determined by the investor, the stock is considered undervalued, or a value stock.
In 2019 investors piled into the neglected and fast-moving technology sector, which caught a lot of money managers by surprise.
Crispin Odey clocked losses were most likely due to the Fed’s transition from tightening to easing, which spurred on capital rotation into value stocks
Moreover, the spike in crude prices mid-month following strikes on Saudi oil processing facilities was quickly reversed.
“In 2019 investors piled into the neglected and fast-moving technology sector, which caught a lot of money managers by surprise”
Crispin Odey clocked losses were also partly due to buying puts in banking stocks in anticipation that bank stocks would fall in price during a set amount of time
But UK financials which have been hit by Brexit have since reversed their fortunes.
As we reported last year, Crispin Odey ‘s bearish wagers included banking which he described as a “serial lagging sector, luring every year value investors to their deaths”.
Crispin Odey’s bets against financial stocks including insurer Lancashire Holdings, the fund’s biggest equity market position, according to a letter to investors seen by the FT. Lancashire’s shares jumped nearly 9 percent in cahoots with financials, which rose strongly in September.
“Crispin Odey’s fund has endured three years of losses. The fund’s worst drop of nearly 50 percent occurred in 2016”
Crispin Odey clocked losses could also be due to the recent recovery in GBP
Last year Crispin Odey wagered billions on a slump in the pound. But since the election of Boris Johnson as UK Prime Minister who pledges his campaign on let’s get Brexit done, the GBP has made a comeback.
Crispon Odey clocked losses were mitigated with a bet against Metro Bank, whose shares crashed after the lender failed £200m bond offering
Crispin Odey’s fund has endured three years of losses. The fund’s worst drop of nearly 50 percent occurred in 2016. Crispin Odey’s fund also rebounded last year, when it was among one of the top-performing funds.
Crispon Odey clocked losses in 2019 and so too have computer-driven trend-following funds, which bet on falling bond yields
September also saw large moves in government bond markets. US 10-year Treasury yields soared from 1.51 percent to 1.91 percent by the middle of the month. A batch of improved economic data and no doubt Fed intervention as it targeted the short end yield curve to put out the fire in the Repo market and fix the 2s10s inversion set the stage.