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“ ‘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 GOOG, -0.82% , Facebook FB, -0.94%, Centene CNC, +0.36%, Humana HUM, +0.60% , and Olympus OCPNF, -4.33% , while grabbing profits from short bets on retailers Gap GPS, +1.50% and Kohl’s KSS, +1.54% .
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 GS, +1.10% 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 DJIA, +0.96% pushing higher out of the gates. The S&P 500 SPX, +0.28% and Nasdaq Composite COMP, -0.40% were slightly lower, at last check.
