Tuesday, March 17, 2020

Hedge fund Bridgewater places $15 billion in bets against Europe and UK

Keeping in mind that the filings don't require disclosure of offsetting (or enhancing) positions in derivatives and, as we've seen over the last few years, don't explain what may be esoteric pair trades unfathomable to anyone but the AI.
Try explaing that to your investors. *
Via Yahoo Finance:
Hedge fund behemoth Bridgewater has shown its hand in Europe with roughly $15 billion in bets against companies on the continent and in Great Britain, filings reviewed by Reuters show.

The world's biggest hedge fund manager's short positions amount to more than $5.3 billion in France and $4.7 billion in Germany, while in Spain its shorts add up to almost $1.4 billion and $821 million in three Italian companies.

In the Netherlands, Bridgewater amassed $2.7 billion in short positions compared with just one new bet of $176.3 million made against a British company, building materials business CRH .
Hedge funds engage in the practice of 'shorting' by borrowing a stock from an institutional investor, such as a pension plan, and selling it back at a profit when the price drops.

Billionaire investor Ray Dalio, whose main hedge fund Bridgewater Associates LP fell sharply amid the coronavirus market slump on Monday, said in a note that he was concerned about the combination of a zero interest rate policy and the growing health pandemic.

The European filings show Bridgewater has bet against firms ranging from Dutch chip maker ASML Holding to France's biggest bank BNP Paribas and German industrial group Siemens ....
...On a related subject see also 2017's post on simultaneous discovery and other stuff:

Let Me Be Clear: I Have No Inside Information On Who Will Win The Man-Booker Prize Next Month (hedge funds, AI and simultaneous discovery)

...On Saturday September 23,  6:28 AM PDT we posted "Cracking Open the Black Box of Deep Learning" with this introduction:
One of the spookiest features of black box artificial intelligence is that, when it is working correctly, the AI is making connections and casting probabilities that are difficult-to-impossible for human beings to intuit.
Try explaining that to your outside investors.

You start to sound, to their ears anyway, like a loony who is saying "Etaoin shrdlu, give me your money, gizzlefab, blythfornik, trust me."

See also the famous Gary Larson cartoons on how various animals hear and comprehend:...
Today Bloomberg View's Matt Levine commends to our attention a story about one of the world's biggest hedge funds and prize-putter-upper of what's probably the most prestigious honor in  literature, short of the Nobel, the Man Booker Award.

On Tuesday September 26, 2017, 11:00 PM CDT Bloomberg posted:
The Massive Hedge Fund Betting on AI

The second paragraph of the story:
...Man Group, which has about $96 billion under management, typically takes its most promising ideas from testing to trading real money within weeks. In the fast-moving world of modern finance, an edge today can be gone tomorrow. The catch here was that, even as the new software produced encouraging returns in simulations, the engineers couldn’t explain why the AI was executing the trades it was making. The creation was such a black box that even its creators didn’t fully understand how it worked. That gave Ellis pause. He’s not an engineer and wasn’t intimately involved in the technology’s creation, but he instinctively knew that one explanation—“I can’t tell you why …”—would never fly with big clients looking for answers when Man inevitably lost some of their money... 
Now that is just, to reuse the phrase, spooky. Do read both the Bloomberg Markets and the Bloomberg View pieces but I'll note right now it's only with Levine you get:
"I imagine a leather-clad dominatrix standing over the computer, ready to administer punishment as necessary."...