The big news of the day is that Bill Ackman’s big new investment is a long bet on the Hong Kong Dollar.
Specifcally, he thinks Hong Kong will repeg its currency from the US Dollar to the Yuan, in part because their economies keep getting more integrated.
So Ackman is long calls on the HKD, and he thinks he’ll make gobs and gobs of money.
This is absolutely perfect. We don’t mean in the sense that it’s a great trade (we have no idea).
We mean in the sense that a “value” investor has now drifted into the red-hot area of global macro/currency trading.
Everyone of course is into global macro these days (currencies, sovereign bonds, gold, etc.). Meanwhile, intra-stock correlation is close to all-time highs.
So how much longer will this last? We’re not sure, but Ackman’s move perfectly captures the zeitgeist of markets these days.
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