| Louis Bacon (Bloomberg) |
Macro maven Louis Bacon has heavily scaled back his exposure to the financial markets.
The founder of New York–based Moore Capital Management is said to have very little risk on these days, despite the stock market’s snapback since mid-February from its early year sell-off.
Bacon declined to comment for this story. However, he is said to believe the economy will slow down in the U.S. toward the latter part of the year, according to an individual familiar with his thinking. He has told people he is surprised by the recent rally, unsure of what investors are pricing in.
Moore managed a total of $15.5 billion at year-end. It operates two main funds — Moore Global Investments, which is run mostly by Bacon, and the larger Moore Macro Managers Fund, which is a collection of about two dozen money management teams that deploy various strategies. Bacon is not heavily involved with the latter fund.
Last year MGI gained 3.4 percent, its second straight year of low single-digit gains. MMM returned 3.1 percent in 2015 after gaining 5.5 percent the previous year. This year through early March, MGI was down less than 1 percent, while MMM was off more than 4 percent.
Moore’s funds were doing a little better earlier in the year, when the markets looked headed for bear territory. For example, MGI was positive in January.
This is because Bacon was negative on the global financial markets heading into the year. In fact, he was bearish heading into December and is said to have been perplexed by the year-end market rally in general.
According to the person familiar with Bacon’s thinking, Bacon continues to see a number of clouds on the horizon. They include such disparate macro factors as China, energy, Federal Reserve rate increases and the potential for negative interest rates.
However, as unclear as these macro factors are, Bacon is said to believe the U.S. political situation is even worse. Bacon is telling people he thinks Donald Trump would be bad for the markets, except for maybe the pharmaceuticals and health care industries.
According to insiders, Bacon thinks Ted Cruz seems mean and that Trump is out to lunch. On the other hand, he thinks Ohio governor John Kasich would be great for the markets.
Interestingly, Bacon is telling people he believes the markets would be relieved if Hillary Clinton became president but the Republican Party retained control of the Senate, since the markets like continuity.
Bacon was initially supporting Jeb Bush, having donated about $1 million to a super PAC that was backing Bush, according to published reports.
Bacon, a noted conservationist, also co-founded America’s Conservation PAC to back pro-conservation candidates for Congress.
