In a somewhat odd interview at Barron’s, hedge fund managers Kevin Duffy and Bill Laggner of Dallas-based hedge fund Bearing Asset Management lay out their view on what they’re shorting and going long.
What’s strange is that the fund is super tiny — just $60 million under management. But they’ve done well, so for now they get to be experts.
Two years ago, they were shorting Fannie Mae, Freddie Mac, money-center banks and brokers, builders, mortgage insurers, etc. Here’s what Duffy and Laggner are thinking today.
Bearing is long on:
- gold (they think it could rise in value to as much as four times the S&P 500)
- consumer staples, discount retailers and pharmaceuticals
Bearing is short on:
- S&P 500
- Japanese and U.S. government long-term bonds (“heavily short”)
- Goldman Sachs
Why short Goldman? “We’re essentially short the political economy, and the most politically connected firm is Goldman Sachs.”
At the heart of our instability, they say, is fractional-reserve banking. They say the government has essentially socialized risk and prevented the bank run, which used to impose discipline on an unstable system.
Read the full interview with Duffy and Laggner at Barrons — >
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