Investors could be looking at a ‘lost decade’ in the stock market, the world’s bigges

[Peter1469]

Investors could be looking at a ‘lost decade’ in the stock market, the world’s biggest hedge fund warns

I have read about this 'lost decade' before and I may have posted about it here not all that long ago, but before the COVID lockdowns. Or it could have been some other forum. Anyway, some economists predict the 2020s will not be great for the economy and investments. But the 2030s will be a golden age for the US.

‘Even if overall profits recover, some companies will die or their shares will devalue along the way. Left with lower levels of profits and cash shortfalls, companies are likely to come out on the other side of the coronavirus more indebted.’

That’s part of the reason why Bridgewater Associates, the world’s biggest hedge fund, issued a warning to clients this week that equity investors could be facing a “lost decade” in terms of returns.


“Globalization, perhaps the largest driver of developed world profitability over the past few decades, has already peaked,” Bridgewater said in a note obtained by Bloomberg News. “Now the U.S.-China conflict and global pandemic are further accelerating moves by multinationals to reshore and duplicate supply chains, with a focus on reliability as opposed to just cost optimization.”


Intel Corp. INTC, -0.76% and Taiwan Semiconductor Manufacturing TSM, -1.49% were cited in the note as two examples of high-profile technology companies that plan to build their production facilities in the U.S., despite the higher costs that will pinch margins.


It’s been a rough stretch for Ray Dalio’s Bridgewater, which has earned an estimated $58.5 billion for clients since its launch in 1975. The fund took a 15% hit in assets under management during March and April, dropping to $138 billion from $163 billion at the end of February.




Here’s Dalio’s infamous “cash is trash” call that preceded the market’s big drop earlier this year:

Read the rest at the link.

[Captdon]

Seems we are doing fine.

[Peter1469]

Seems we are doing fine.

So far so good for me.

[carolina73]

Investors could be looking at a ‘lost decade’ in the stock market, the world’s biggest hedge fund warns

I have read about this 'lost decade' before and I may have posted about it here not all that long ago, but before the COVID lockdowns. Or it could have been some other forum. Anyway, some economists predict the 2020s will not be great for the economy and investments. But the 2030s will be a golden age for the US.



Read the rest at the link.

Would it be to the benefit to someone running hedge funds to provide a negative outlook for the future stock market?

[Peter1469]

Would it be to the benefit to someone running hedge funds to provide a negative outlook for the future stock market?

Probably.

[Cotton1]

Would it be to the benefit to someone running hedge funds to provide a negative outlook for the future stock market?

If "hedge funds" only engaged in true hedging it would be quite beneficial. Hedge funds have ventured into many areas of incestments from African Land grabs on behalf of Harvards Endowment Fund to spreading out into all asset classes tgru use of leveraged derivatives. At the core of your question hedge funds would likely show incredible year over year returns in a tanking market. The reason is markets drop much quicker than rhey rise. Hedge funds use a lot of synthetic shorts and longs that give tremendous leverage while actually decreasing short term risk as the mechanics of a synthetic create a greater margin of error.