Bulletin
Investor Alert

New York Markets Open in:

Key Words Archives | Email alerts

Feb. 28, 2021, 3:43 p.m. EST

‘Head-smacking craziness’ has reached new heights in today’s markets, says hedge-fund billionaire Paul Singer

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Dow Jones Industrial Average (DJIA)
  • X
    S&P 500 Index (SPX)
  • X
    NASDAQ Composite Index (COMP)

or Cancel Already have a watchlist? Log In

By Mark DeCambre

That’s billionaire Paul Singer of Elliott Management suggesting that the market for equities has pretty much jumped the shark, in a Jan. 28 letter to clients, as reported by Bloomberg on Friday .

Stocks on Friday capped a bruising week with sharp losses as interest rates have taken a slow and then sudden course higher, with investors also fretting about lofty valuations in everything from so-called meme stocks, being whipped higher by investors massing on Reddit, to bonds, which may be facing a reckoning on elevated inflation expectations.

Long-dated U.S. government bonds saw their biggest monthly yield gain since 2016, meaning prices of risk-free fixed-income bets got hammered. And investors are worrying that the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.16% , the S&P 500 index /zigman2/quotes/210599714/realtime SPX -0.41% , and the highflying and technology-fueled Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -0.99% face a tough road ahead as higher lending rates make speculative equities less attractive.

In any case, Singer believes that the market is out of whack and warns that wagers on bitcoin /zigman2/quotes/31322028/realtime BTCUSD +0.53% and richly valued companies like electric-vehicle maker Tesla Inc. /zigman2/quotes/203558040/composite TSLA -3.95% , championed in his estimation by an investment mob, will eventually have him and his team at Elliott declaring, “We told you so.”

Bloomberg reported that Elliott Management, which braced for the pandemic stock-market crash far earlier than other investors, made money in every month of 2020, even during the carnage of March. Stock benchmarks hit the year’s nadir on the 23rd of that month.

Elliott, which manages more than $40 billion, has registered annualized gains of about 13% in its 44 years, beating the S&P 500 index. Singer’s net worth, meanwhile, stands at $3.6 billion, according to Forbes .

Even before the advent of the coronavirus-borne disease COVID-19 , Singer had been preparing for a big market drop. Back in 2017, he raised $5 billion for a rainy-day fund in preparation for what he described in a letter as a time when “all hell” breaks loose. Back then the market was in a period of quiescence, remaining stubbornly buoyant, due partly to investors’ propensity to buy leveraged VIX /zigman2/quotes/210598281/delayed VIX -0.65% products and treat market dips as opportunities, until that trade imploded .

It is unclear what hell looks like to Singer now, but it is apparent that he maintains less-than-favorable outlooks on the economy and the market, even as vaccine rollouts and pandemic relief legislation make the prospect of a solid recovery from the worst pandemic in over a century likelier.

/zigman2/quotes/210598065/realtime
US : Dow Jones Global
33,730.89
+53.62 +0.16%
Volume: 318.67M
April 14, 2021 5:15p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
4,124.66
-16.93 -0.41%
Volume: 2.09B
April 14, 2021 5:15p
loading...
/zigman2/quotes/210598365/realtime
US : Nasdaq
13,857.84
-138.26 -0.99%
Volume: 3.60M
April 14, 2021 5:16p
loading...
/zigman2/quotes/31322028/realtime
US : CoinDesk
62,689.57
+332.61 +0.53%
Volume: 0.00
April 15, 2021 6:11a
loading...
/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 732.23
-30.09 -3.95%
Volume: 49.02M
April 14, 2021 4:00p
P/E Ratio
1,165
Dividend Yield
N/A
Market Cap
$731.72 billion
Rev. per Employee
$445,694
loading...
/zigman2/quotes/210598281/delayed
US : Cboe Indices
16.88
-0.11 -0.65%
Volume: 0.00
April 15, 2021 4:56a
loading...

This Story has 0 Comments
Be the first to comment
More News In
Markets

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.