Swiss hedge fund manager Felix Zulauf participated in Barron’s annual Roundtable, and he came with a couple of trades.Three of those trades involved Japan.
“The moment has arrived where the Bank of Japan needs to bridge the gap and buy more JGBs with newly printed yen,” he said. “In other words, the supply of yen will increase dramatically. Japanese inflation will be pushed from slightly below zero to 2%, and the yen will be weakened. This is a major change for Japan, because the yen has been one of the world’s strongest currencies for a long time, right behind the Swiss franc.”
Here are his trades:
- U.S. dollar vs. Japanese yen
- USD/JPY Call Option Strike 95 Exp. 12/31/2014
- WisdomTree Japan Hedged Equity Fund (DXJ)
- iSharesMSCIBrazil Index Fund (EWZ)
- iShares FTSE China 25 Index Fund (FXI)
- iShares MSCI Emerg Mkts Index Fund (EEM)
“The last time I discussed Japanese stocks was at the 1990 Roundtable, when Paul Tudor Jones and I recommended selling the Nikkei at 40,000,” he said. “We said it would be cut in half. The Nikkei hit a low of 7,000 in 2009 and since then has traded in a range of 7,000 to 11,000.”
Maybe he’ll be right again.
For Zulauf’s commentary on each of his trades, read the transcript at Barrons.com.
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