Back in April 2011, hedge fund manager Kyle Bass advised the University of Texas (disclosure: my Alma Mater) on taking delivery of nearly $1 billion worth of gold bars.
Now that bet has gone sour.
Gold’s slump has saddled the second-largest U.S. college endowment with more than $300 million in paper losses. But the swoon hasn’t shaken the faith of Bruce Zimmerman, who since 2007 has been chief executive of University of Texas Investment Management Co.
“We always prefer that our assets go up, rather than down, but we’re not day traders,” said Mr. Zimmerman, whose company invests $29.5 billion for the benefit of the University of Texas and Texas A&M systems. “Gold is a hedge, and it still fills that role.”
This is utterly hilarious.
“Macro Tourists” is a phrase that was coined by former policy economist and global macro trader Mark Dow to characterise investors who left their comfort zone to make big pronouncements about how macroeconomics really works.
Kyle Bass’s expertise is in private credit, mortgages, and so forth. He recently unveiled an intriguing contrarian bet on a phone book company. This stuff is his wheelhouse. He’s been famously incorrect on Japan blowing up, and his arguments about a “Keynesian endpoint” is a made-up phrase.
So in other words, the term Macro Tourist was originally coined to describe an investor like Bass going from private credit to global economics and sovereign debt. Now slamming other people about this? Hilarious.
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