It isn't very easy to garner any insights from Paul Tudor Jones' 13F filings. He is usually a short term trader with hundreds of small meaningless positions. Fortunately, we have his latest investor letters and have an idea about what he is thinking. Tudor Jones currently thinks that Chinese and Asian currencies are significantly undervalued against the U.S. dollar. In order to keep their export driven economies humming, these countries opted to import dollar inflation. Jones estimates that Chinese RMB is 35% - 72% cheaper against the U.S. dollar than in 1993. This is what Jones suggests U.S. should do:
"It could intervene in the foreign exchange market against the Hong Kong dollar, and exert its influence on what is by definition a bilateral, not unilateral, exchange rate. This is no different from what Asia does everyday to the U.S. and would speed up RMB appreciation. Just as a matter of prudent reserve management, the U.S. could also intervene against other Asian currency suppressors to diversify its foreign exchange reserves."
Paul Tudor Jones thinks Asian currencies are poised to appreciate significantly and he is betting accordingly. At the end of December, he had the following long positions in his portfolio:
Stock | Ticker | Value (x1000) | |
SPDR DOW JONES IND AVG ETF | 289,075 | Call | |
SECTOR SPDR FINANCIALS | 85,732 | Call | |
SPDR S&P 500 ETF TRUST | 75,450 | ||
ISHARES CHINA 25 | 51,708 | Call | |
ISHARES EMERGING MARKETS ETF | 47,642 | Call | |
ISHARES EMERGING MARKETS ETF | 44,588 | ||
SECTOR SPDR TECHNOLOGY | 37,785 | Call | |
CITIGROUP INC | 18,657 | ||
GAIN CAPITAL HOLDINGS INC | 17,600 | ||
AT&T INC | 15,654 | ||
ISHARES SOUTH KOREA ETF | 12,393 | ||
PROGENICS PHARMACEUTICALS | 11,255 | ||
ISHARES CHINA 25 | 10,773 | ||
MICROSOFT CORP | 10,285 | ||
BARRICK GOLD CORP | 10,051 | ||
PFIZER INC | 9,620 | Call | |
HCP INC | 7,358 | ||
HUNTINGTON BANCSHARES INC | 6,918 | ||
MEAD JOHNSON NUTRITION CO | 5,048 | ||
MARKET VECTORS ETF TRUST | 5,033 | ||
You can see that he had long positions and call options on the China ETF, South Korea ETF, and the Emerging Market ETF. Other than these, he also had some financials, technology, and healthcare plays. He also has smaller positions is Barrick Gold and Agribusiness ETF which are possible hedges against inflation.
Paul Tudor Jones isn't only hedge fund manager who is bearish about the U.S. dollar. Jim Rogers is worried about U.S. inflation and has been betting on commodities. Ray Dalio, the owner of world's largest hedge fund, is extremely bullish about emerging markets and gold.
Disclosure: I am long C, T, MSFT.
