Crispin Odey is predicting markets are bottoming out after the coronavirus sell-off, despite his concerns about the government’s response to the pandemic.
The hedge funder has increased his stake in Vodafone and bought shares in UBS, US cable company Charter Communications, and Dutch shipping company Euronav, according to the Mail on Sunday.
Odey told the newspaper the FTSE 100 “has to rally because a recession has been priced in”. “I’m buying some shares now. It’s a good time to be stock picking.”
His call comes despite criticism of the UK’s initial reaction to Covid-19.
“This feels like war,” Odey said. “The situation is pretty awful. It seems the original advice given to the government wasn’t good enough.”
He added: “I have a feeling that one of the big hedge funds is about to go bust and I worry we will find ourselves with inflation once the chancellor’s £330bn emergency loan scheme kicks in.”
Odey’s bets net him £115m
The Odey European fund has rallied almost 20% year to date despite the fact it was down 12% in February. Odey’s bets have raked in £115m from the market reaction to Covid-19.
“The market hasn’t been this interesting since 2008,” he said. “Going into March, I was down 12% for the year but my fund is now between 18% and 20% up for the year.”
At the start of March, Odey had predicted the FTSE 100 would fall to 5,000 before the year was out. It hit that point briefly last week.
Fevertree, Metro Bank and shopping centre giant Intu were among the British companies he had been betting against, initiating positions in the first couple of weeks of March, according to the Financial Conduct Authority.
He thought automated trading was compounding market effects of coronavirus.
“The big difference between now and the last big crash in the 2008 financial crisis is the trading machines,” he said. “The machines just never stop selling when the market falls. That’s why you are seeing such high levels of volatility and big index moves down.”
