Famed hedge fund manager boosts long positions to 65% of holdings;
Barton Biggs, the hedge fund manager who bought stocks when the market bottomed in March 2009, boosted bullish bets on equities in his Traxis Global Equity Macro Fund on improving U.S. economic data.
The fund's net long position rose to 65 percent from 40 percent about a month ago, according to Biggs, the founder of Traxis Partners LP, in an interview with Betty Liu on Bloomberg Television's “In the Loop” program. Biggs said on Sept. 22 that bullish bets at all Traxis funds had fallen to 20 percent.
U.S. stocks have recovered from the brink of a bear market amid optimism European leaders will take action this month to solve the region's debt crisis. The Standard & Poor's 500 Index surged 6 percent between Oct. 7 and Oct. 14, the biggest weekly rally since July 2009.
“I'm inclined to stay where I am, which is moderately, cowardly bullish,” Biggs said. “The thing that makes me want to hang in there is that the high frequency economic news from the U.S. has definitely improved. It's gotten pretty good.”
The Citigroup Economic Surprise Index for the U.S. turned positive last week for the first time since April 29, the day the S&P 500 peaked at an almost three-year high. It climbed to 2.2 on Oct. 14, up from minus 117.20 on June 3. The reading four months ago showed reports were missing the median economist projection in Bloomberg surveys by the most since January 2009.
The S&P 500 fell 1.1 percent to 1,211.76 at 11:18 a.m. New York time today, as Wells Fargo & Co. reported third-quarter revenue dropped and a German government spokesman damped optimism of a quick fix to Europe's debt crisis.
Biggs predicted on Aug. 18 that the S&P 500 may be bottoming after an 18 percent drop between April 29 and Aug. 8. Last month, he said bets that stocks will gain made up 20 percent of holdings at Traxis, down from as much as 85 percent six months prior, as the threat of a recession makes equities too risky.
“I wish I was minus 20,” he said during a Sept. 22 interview on Bloomberg Television. Markets were indicating policy makers have to change or the economy will slip into a double-dip recession and stocks will plunge another 20 percent, he said at the time.
--Bloomberg News--
