Bacon to Return Money to Investors
I'm talking about Louis Bacon, who has made a lot of money and who is not nearly as tasty as the real bacon. Mr. Bacon is a hedge fund titan and has recently decided to return a ton of money over to his investors after what he described as eighteen months of "disappointing" investing returns.
If you weren't certain how bad of a situation the world economy is in before, you should have at least a grasp on things now. When someone like Bacon—a high-stakes macro investor with more than twenty years of experience in the markets under his belt—makes a few moves to protect his investments instead of trying to grow them; let's just say that means the economy has been in better shape.
With his main fund down 3.18 percent in the second quarter of the year, Mr. Bacon said he felt "more comfortable" reducing the size of his fund, so he could give his clients a decent return based on the fees they have to pay.
Mr. Bacon's decision is the kind of thing we ought to expect from major investors in lieu of extreme volatility and slumped markets. Nowadays, many Financial Advisor are warning against most drastic moves in the market.
Despite what the media is saying, Financial Advisors by and large don't think that we are out of the recession, but our own economic state is not the big issue here. Most of the hesitation and turmoil we are witnessing now is because of the European debt crisis, which, by the way, is still veering toward total chaos.
Europe is in a risky situation. Mr. Bacon is in a position to perform a macro trade that would make his entire career. Like other macro investors (such as George Soros, who has accumulated his wealth at the downfall of several national currencies), Mr. Bacon could have capitalized on the crisis in the euro zone.
Mr. Bacon noticed that the massive debt continues to grow. He saw that with their deficits and competitive imbalances, Europe would collapse in one way or another. He stood to make a bundle off of Europe's misfortune. Yet, he found himself unable to do that.
"It is amazing," said Bacon, "how important the decision-making of one person, Angela Merkel, has become to the world markets."
Most of the political officials across the pond want more bailouts, more summit meetings, and more austerity. They don't want to admit to their losses, and that indecision has muddied the waters for investors, leaving them on the fence as to which way to move.
Amateur investors would be wise to learn from the professionals. Mr. Bacon, who is believed to be worth around $1.4 billion, is probably one of the best people whose footsteps you could walk in when it comes to managing your money.
If you weren't certain how bad of a situation the world economy is in before, you should have at least a grasp on things now. When someone like Bacon—a high-stakes macro investor with more than twenty years of experience in the markets under his belt—makes a few moves to protect his investments instead of trying to grow them; let's just say that means the economy has been in better shape.
With his main fund down 3.18 percent in the second quarter of the year, Mr. Bacon said he felt "more comfortable" reducing the size of his fund, so he could give his clients a decent return based on the fees they have to pay.
Mr. Bacon's decision is the kind of thing we ought to expect from major investors in lieu of extreme volatility and slumped markets. Nowadays, many Financial Advisor are warning against most drastic moves in the market.
Despite what the media is saying, Financial Advisors by and large don't think that we are out of the recession, but our own economic state is not the big issue here. Most of the hesitation and turmoil we are witnessing now is because of the European debt crisis, which, by the way, is still veering toward total chaos.
Europe is in a risky situation. Mr. Bacon is in a position to perform a macro trade that would make his entire career. Like other macro investors (such as George Soros, who has accumulated his wealth at the downfall of several national currencies), Mr. Bacon could have capitalized on the crisis in the euro zone.
Mr. Bacon noticed that the massive debt continues to grow. He saw that with their deficits and competitive imbalances, Europe would collapse in one way or another. He stood to make a bundle off of Europe's misfortune. Yet, he found himself unable to do that.
"It is amazing," said Bacon, "how important the decision-making of one person, Angela Merkel, has become to the world markets."
Most of the political officials across the pond want more bailouts, more summit meetings, and more austerity. They don't want to admit to their losses, and that indecision has muddied the waters for investors, leaving them on the fence as to which way to move.
Amateur investors would be wise to learn from the professionals. Mr. Bacon, who is believed to be worth around $1.4 billion, is probably one of the best people whose footsteps you could walk in when it comes to managing your money.
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