'Everything is going down': A hedge fund manager who returned 163% in 2022 says the stock market pain is only beginning
He got way ahead of the Fed's rate hikes and was rewarded with 163% returns last year that defied a brutal market.
Veteran trader Neal Berger is betting that global assets are going to feel more pain, after scoring a massive gain last year when stocks had their worst performance since 2008. According to a Bloomberg report, he ran Eagle's View Capital Management as a fund of funds for 16 years before launching the Contrarian Macro Fund, which in April 2021 piled up bets on an increasingly hawkish Federal Reserve. The new fund delivered a return of about 163% in 2022."The reason why I started the fund was that central bank flows were going to change 180 degrees. That key difference would be a headwind on all asset prices," he told Bloomberg.
"One had to believe that the prices we saw were, to use the academic term, wackadoodle." Per the report, Eagle's View has about $700 million in assets under management, and roughly $200 million in the Contrarian Macro Fund. The turbulence of the previous year brought losses for many money managers, but Berger found the opposite. He told Bloomberg he's shorting stocks and bonds with futures contracts, targeting assets he believes have been skewed by easy money policies.In particular, his Contrarian Macro Fund is mostly betting against Europen and American assets, though it also has hedges that will pay returns in upswings."The $19 trillion of sovereign debt trading at negative yields, the SPAC boom, the crypto boom, private equity valuations and public equity valuations — they're all stripes of the same zebra," he explained.
"The zebra being the ocean of liquidity, first in response to the Great Financial Crisis and then to Covid." After the Bank of Japan took the surprisingly hawkish step last month to widen the trading range of 10-year bond yields, Berger added bets against Japanese bonds. He anticipates maintaining his short positions for years and predicted pain in the stock market won't become evident until markets go sideways for months."Big picture, everything is going down," Berger said. "Price action is ultimately the bible."