Hugh Hendry

Hugh Hendry

Postby winston » Tue Aug 18, 2009 10:00 pm

Hugh's video was shot quite a while back. So this author must have been sitting on this article for a long time, waiting for the SSE to crash before he can publish this article.... LOL

===================================================

What Chinese Authorities Do Not Want You to See By Tom Dyson, Daily Wealth

If the Chinese authorities had caught him making this video, they would have arrested him...

Hugh Hendry is a hedge-fund manager from Britain. Eclectica is the name of his fund. He's outspoken and critical of the establishment. You could say he's somewhat of a pariah in London's hedge-fund industry. In 2008, his fund generated 32% by making massive bearish bets...

Earlier this year, Hendry took a trip to Guangzhou, China's third-largest city after Beijing and Shanghai. There's been a huge construction boom in China in recent years, and Guangzhou is one of the hot spots. Developers have erected so many skyscrapers, Guangzhou's central business district could easily match Chicago or Boston for the number of modern, high-rise buildings.

So Hendry shot a video of the office buildings in the district. He focuses on one shiny black skyscraper with a giant neon screen at its base. It's close to 100 stories... And it's obviously brand new...

"This is a seriously large building," says Hendry. "We're talking at least half a billion dollars to construct this thing. It's empty! Who is going to fill this thing? Who is going to pay the debt that that building is resting on?"

Hendry's film shows several more skyscrapers... each as large and modern as any new tower you'd find in Manhattan... and they are all completely empty.

"This is astonishing," he concludes... You can watch the whole video here.
http://clicks.dailywealth.com//t/AQ/WQE ... sPkKw/aVx9

Thing is, the Chinese are incredibly touchy about foreign journalism. I experienced it first hand when I was in China last year and tried to organize a tour of a factory in Lanzhou. They almost arrested me when they discovered I didn't have a journalist visa. If the Chinese had known Hendry was filming empty buildings and posting his movie on the web, they would have definitely arrested him...

So why does Guangzhou have so many empty office buildings? It's because of false market signals. The Chinese government's inflation and easy-money policies have led developers to build more office space than Guangzhou needs.

Now that the world economy has fallen apart, the malinvestment sticks out like an empty skyscraper.

From the reports I've heard, it's not just Guangzhou. There are now too many factories, too many buildings, and too much infrastructure relative to demand all over China...

Instead of letting the market liquidate these mistakes when the crisis struck, the Chinese government decided to make it even worse. Over the last nine months, it has forced banks to make more terrible loans and encouraged a new batch of unnecessary construction. A second China bubble has formed. You can see this second bubble in this chart of Shanghai's stock market index. It rose over 100% between November 2008 and July 2009.


But that bubble may be about to end... Three weeks ago, the Shanghai stock market reached a peak and started falling. Now we have the downtrend. We have a fantastic opportunity to short this bubble and make a fortune as the new Chinese miracle falls apart...

There are a lot of ways to go about shorting China. You can sell short commodities like copper and oil. Chinese stocks and commodities tend to trade along with each other. You can also short the big Chinese stock ETF (FXI) or buy an "inverse fund" that profits when Chinese stocks fall. The symbol here is FXP.

( I would be very careful before I short something that is not 100% market driven )
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Re: Hugh Hendry

Postby winston » Sun Aug 30, 2009 8:22 pm

I've seen him on CNBC a couple of times. Outspoken. Brilliant Mind. Lot's of common sense. Not sure of his performance though ..

=====================================================

Hugh Hendry, founder of Eclectica Asset Management, shares his views on the investment scene in his latest “Fund Manager Commentary” that has just been published.

“Good people are becoming desperate. I know a man who is planning to capitulate and buy stocks. He cannot comprehend what is happening today. He is, to employ Churchill, a fanatic; he won’t change his mind and he can’t change the subject. But, fearing the loss of his franchise, he will change his portfolio. He laments that it is as though last year’s events never happened.

Rhetorically, he asks whether we have all been sent through time to invest in equities at the end of the 1970s when stocks were cheap and society had thoroughly deleveraged (the opposite of today). ‘Why do other investors not contemplate the prospect of further household deleveraging when building their profit forecasts?’ he fumes. ‘Can they not see that the private sector’s deleveraging is more than offsetting the public sector’s expansion?’

“Now I know I have not covered myself in glory these last few months. Stock markets have gained 50% from their lows and the Fund has little to show for it except a modest reversal and no wild swings in our monthly NAV. Nevertheless, I would contend that this game of playing ‘chicken’ with the market is not for us. Our ambition has been modest. To survive the onslaught of a positive change in social mood without being forced to capitulate in the face of a frenzy of optimism; so far so good, I think?

“In this regard we have been helped immensely by a quote from Robert Prechter in early April. Having correctly called for a counter-trend rally in stock prices in late February, he then described the most likely nature of the advance, ‘… regardless of its extent, it should generate substantial feelings of optimism.

At its peak, the President’s popularity will be higher, the government will be taking credit for successfully bailing out the economy, the Fed will appear to have saved the banking system, and investors will be convinced that the bear market is behind us.’

“So far his prophecy reads well. It is reminiscent of Warburg’s line that the business cycle is ‘a subject for psychologists’ rather than economists. Bernanke is already being compared favourably with Volcker. Continental Europe has apparently ‘escaped’ from recession. Positive economic growth across the world for the remainder of the year seems certain. And yet Prechter went on, ‘Be prepared for this environment: it will be hard for most investors to resist. But beware… [the next move] will be the most intense collapse in stock prices.’

http://www.investmentpostcards.com/wp-c ... -fund1.pdf
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Re: Hugh Hendry

Postby helios » Sun Aug 30, 2009 10:42 pm

good article.

let us not chase the market when it has gulped > 50% ...
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Re: Hugh Hendry

Postby kennynah » Mon Aug 31, 2009 12:48 am

‘Why do other investors not contemplate the prospect of further household deleveraging when building their profit forecasts?’ he fumes. ‘Can they not see that the private sector’s deleveraging is more than offsetting the public sector’s expansion?’

in simple engrish....means what???? what deleveraging??? an overused...and under comprehended term....
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Re: Hugh Hendry

Postby winston » Mon Aug 31, 2009 8:11 am

Maybe he meant that people are now paying off their credit card balance, no longer getting a second mortgage on their existing home, no longer having 3 or 4 mortgages etc.
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Re: Hugh Hendry

Postby winston » Wed Nov 18, 2009 8:03 am

Eloquent guy. However, I gave up on his report below after a few paragraphs. This is the internet age. I dont have time to read a book. If you cant say something in a few paragraphs then I dont have time for you...

===========================

Eclectica November Fund Commentary by Hugh Hendry, Eclectica Fund Manager

"The power to become habituated to his surroundings is a marked characteristic of mankind."

John Maynard Keynes
The Economic Consequences of the Peace, 1921

http://www.investorsinsight.com/blogs/j ... ntary.aspx
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Re: Hugh Hendry

Postby winston » Fri May 28, 2010 7:49 am

This guy is always a "Half-Empty" glass type . I have put a "Warning Sign" on this thread ..


Hugh Hendry: "I Would Recommend You Panic" by Tyler Durden

BBC Newsnight held another great financial round table discussion (why do these occur only in Canada and across the Atlantic? Is it so difficult to have 20 minutes of commercial free debate here in the US where people can actually tell the truth?) which brought together Hugh Hdenry, Gillian Tett and Jeffrey Sachs.

As usual, Hendry takes it odd with a bang: "I would recommend you panic. The European banking system is in a crisis." He continues: "Let's purge this system of its rottenness. Let's take on a recession. It's going to be tough, people are gonna lose their jobs. They are going to lose their jobs anyway.

We can spread this over 20 years, or we can get rid of it over 3 years." Of course, the Columbia professor, is completely against purging the system: how else can US higher "educators" continue to indoctrinate generation after generation with the flawed principles of a bankrupt ideology, and continue getting getting paid handsomely if there is an global reset?

Even funnier, Jeffrey Sachs loses it when Hendry calls him out on his BS at 5 minutes into the clip. The ensuing smackdown is worth the price of admission alone.

http://www.zerohedge.com/article/hugh-h ... -you-panic
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Re: Hugh Hendry

Postby winston » Tue May 01, 2012 6:11 am

Hugh Hendry Is Back - Full Eclectica Letter by Tyler Durden

"We are, as a result, long the debt saddled west and short the vastly over vaunted and over owned BRICs."

More on this: "There is a near consensus that China will supplant America this decade. We do not believe this.

We are more bullish on US growth than most.


http://www.zerohedge.com/news/hugh-hend ... ica-letter
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Re: Hugh Hendry

Postby winston » Sat May 05, 2012 6:49 am

Didn't he tell this same story in 2009 when he posted those Youtube videos ?


Hugh Hendry Predicts Crisis Will Spread to Asia

Hugh Hendry, one of the hedge fund industry's most outspoken managers, has warned that the economic crisis is headed for Asia, with the region's largest economy, China, struggling under a bursting property bubble and tumbling demand for its exports.

http://www.cnbc.com/id/47288348
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Re: Hugh Hendry

Postby winston » Wed Jul 18, 2012 2:35 pm

Hmm.... The Big Bear has come out of 2 year hibernation. Go ahead and frighthen youself on this nice day :P

Hendry: Market's single digit years from 1930s style crash - FT

Hendry: US govt bond yields will continue to fall - FT

Hendry: Using CDS to bet against debt of leveraged Japanese firms - FT

http://search.cnbc.com/main.do?target=a ... es=exclude
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