By Shawn Langlois, MarketWatch
‘Trump talking down COVID-19 risk gave investors an incredible gift — it kept markets resilient much longer than they should have, and enabled us to ensure our portfolio was sensibly positioned.’
That’s Axon Capital co-founder Dinakar Singh giving a nod to the president and his handling of the coronavirus pandemic in a recent note to investors cited by Reuters .
Trump, of course, has embraced that role, acknowledging he’s had to be “a cheerleader” to avoid creating “havoc and shock” in a country with the world’s highest number of infections and deaths.
“We simply never believed ‘what happens in China stays in China,’” wrote Singh, whose hedge fund overseas about $1 billion in assets and is up about 30% so far this year thanks to big bets on bets on technology giants, managed-care stocks and Japanese companies.
Specifically, the fund capitalized on rallies in Google owner Alphabet /zigman2/quotes/205453964/composite GOOG +1.78% , Facebook /zigman2/quotes/205064656/composite FB +1.47% , Centene /zigman2/quotes/208900023/composite CNC +3.45% , Humana /zigman2/quotes/203095337/composite HUM +1.03% , and Olympus /zigman2/quotes/203009041/delayed OCPNF +0.16% , while grabbing profits from short bets on retailers Gap /zigman2/quotes/206554267/composite GPS +0.87% and Kohl’s /zigman2/quotes/210414114/composite KSS +0.82% .
Axon, as Reuters reported, has trounced the average hedge fund, which lost 3.5% in the first half. Singh said he was able to hedge earlier in the year by “adding some volatility protection,” a move that bogged down “performance in January and early February, but has helped ever since.”
What’s next? Sing, a former Goldman /zigman2/quotes/209237603/composite GS +0.51% stockpicker, offered a bearish take: “All investors should think seriously about buying ‘protection’ against structural rise in interest rates.”
No need for much downside protection in Tuesday’s trading session, with the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.05% pushing higher out of the gates. The S&P 500 /zigman2/quotes/210599714/realtime SPX +1.40% and Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +2.13% were slightly lower, at last check.