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‘It wasn’t meant to be like this’: Hugh Hendry’s farewell letter than three years later he quit Odey to set up his hedge fund boutique Eclectica. Below we repost his full final letter in its entirety, and wish Hendry good luck in his next endeavour. * * *. CF Eclectica Absolute Macro Fund. Hugh Hendry is back with a bang after a two year hiatus with what so many have been clamoring for, for so long – another must read letter from.

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We just need the last shoe to drop. And with the end of the current term of QE looming it could be set to get even worse. I meet a lot of inquisitive and extremely intelligent people in this business and I have come to think that maybe this is something of a problem.

And the so far robust performance of the UK economy since the vote will do little to dissuade others from following suit. He would like to publish his Eclectica investment letters as a book. They wanted to tighten credit conditions gradually. Hendry blames the firm’s tough times on factors including quantitative easing, Donald Trump’s “news bombs” and his own modus operandi: Scroll for more of this story.

To contact the ehndry of this story with feedback or news, email Tom Teodorczuk.

Please click the verification link in your email to activate your newsletter subscription. I cannot be reached by telephone. I suspect he would have made a fine macro manager. Hendry studied Accounting and Eclecticaa at Strathclyde. It seems to me that wage or cost push inflation is far more difficult to prevent and contain than asset price inflation.

Never Miss A Story! My contention is simply that fixed income volatility has over shot to the downside, that such moments are fleeting and that you are not necessarily dependant on a correction in treasury prices. And so we fear a storm is coming. For the implications of a sustained bout of economic growth are good for you. What if the hyper but short lived shrew like performance of previous US expansions has metamorphosed into the slothful giant tortoise that can live for years?


No long-distance commuting after Brexit How to stay married ec,ectica you work in banking.

Hugh Hendry Q3 Letter: Dramatic Fulcrum Point; Only Precedent Is s

The bond market hated the idea as it was expected to cause a severe inflation problem. In a letter to investors he said he’ll sit out of trading until the next downturn, but said he’s optimistic about the global economy.

The question now is just how we can make money in the tough business of global macro investing this year. Sadly I will be unable to participate with such trades during the next upheaval in global letfer with the Fund but I hope that this commentary has at least roused you into contemplating scenarios that are presently deemed less plausible.

People did not believe he had truly changed tack.

Hugh Hendry Eclectica Fund Investor Letter ~ market folly

This is all the more ominous as the Fed has been reluctant to unwind its balance sheet. We have previously commented on the notion of a Chinese growth tax, whereby its insatiable appetite for commodity heavy economic expansion drove the super-cycle and persistently led to western headline inflation rates greater than core and by implication tighter monetary policy than was warranted. A best in class risk technique that stop losses the narrative and responds early with loss mitigation procedures i.

However if an inflationary path like is gestating then I fear there is very little chance that anything timely will be done about it.

As I am sure you by now know, I am nothing but a worrier. And for several years we have studiously hjgh investing in companies exposed to industrial commodities and have been circumspect in sizing equity shorts mindful of the torturous upside price volatility short squeezes that has made monetization of the narrative almost impossible.

It would distribute incremental dollars to those with a much higher propensity to spend. I suspect daily VaR budgets are anchored at 50 bps or less. The National Bureau of Economic Research defines eleven business cycles since towith the average expansion lasting just letted five and a half years.


In our view the answer is obvious: Unfortunately for him, he did not realize just how far the central planners were willing to take their monetary experiment, so after the market troughed inhe kept his bearish perspective, which cost him dearly in terms of missed gains and lost capital under management, until one day in Novemberhe capitulated and turned bullish, infamously saying ” I cannot look at myself in the mirror; everything I have believed in I have had to reject.

That is to say, I fear the financial evlectica is in danger of harvesting a monoculture of fund returns that could prove less than robust should the global economy suffer another deflationary reversal So it is entirely rational especially if you have never met a hedge fund manager to assume the industry attracts the brightest, smartest minds.

As you know, I have a proclivity to make money in a bear market. Enter a valid email address.

An audience with Hugh Hendry: ‘We need more pirates’

And with the bond market, wrongly in my opinion, infatuated with the likelihood of hugn approaching US recession, the Treasury market is unlikely to move much. Typically I made money when everyone lost money, and when they made money, I didn’t make money. He has since decided to move to Paris, and says his challenge is to find out what makes him happy.

Editor’s Picks Bitcoin peaked one year ago: And if anything remotely close to the Hugu bear scenario, or a political disaster in Europe stemming from Brexit or migration issues does play out, this spread will almost certainly explode to the upside. Not 17th century sailors, but the s hedge fund pioneers.