Hedge fund managers don’t know macro

Listen I know John Paulson made an enormous amount of money betting against the housing markets in 2007. He made some excellent calls and made a tonne of cash.

As Nassim Taleb would say though, that doesn’t necessarily mean he has skill or insight. He could just have been lucky. Most people lost money in that market; it would be almost impossible if nobody had the opposite positions and made large amounts of money.

I’m also not saying Paulson doesn’t have skills or insight.

But I am saying that there is no reason to listen to hedge fund managers as a guide to the economy.

Paulson’s hedge funds are in total down significantly this year. ┬áHe got it right and now he got it wrong.