It’s a pretty strong signal: China’s Sovereign-Wealth Fund is in talks with Black-Swan-author Nassim Taleb’s Hedge Fund, Universa’s Bearish Wagers, The Wall Street Journal reports. China is said to be willing to invest between 6 and 10 billion dollar in the fund that gives a payout of 60% if the market drops 20%. Some of the world’s biggest investors are planning to do the same.
“Stocks are not a robust investment. Make sure you have a garden that bears fruits.”
Nassim Nicolas Taleb
The famous author, philosopher and Wall Street trader, professor Nassim Nicholas Taleb was in his native northern Lebanon last week, thinking about instability in the pricing of goods and services. He suggests that investors around the world strap in for a wild ride of deflation and inflation. And says it therefore makes sense for him to pour money into farming, especially olives, which are indispensable to the Mediterranean world.
The mathematical finance scholar who lectures at New York University and wrote the 2007 book “The Black Swan” says he is as pessimistic as ever about the prospects for sustained global economic recovery.
He suggests that investors around the world strap in for a wild ride of deflation and inflation. And, therefore, he said, it makes sense for him to pour money into farming, especially olives, which are indispensable to the Mediterranean world, The Wall Street Journal writes.
“Healthy investments are those that produce goods that humans need to consume, not flat-screen TVs,” Mr. Taleb says over the phone from near his family’s ancestral home in Amioun.
“Stocks are not a robust investment. Make sure you have a garden that bears fruits.”
In For A Wild Ride
Nassim Nicholas Taleb also says investors around the world should strap in for a wild ride of deflation and inflation.
Some of the world’s biggest investors are planting the same seeds, according to WSJ.com.
The Santa Monica, Calif., investment firm Mr. Taleb helped start and still advises, Universa Investments LP, is in talks with China’s $300 billion sovereign-wealth fund, China Investment Corp., and Middle East government funds about investing in Universa, according to a person familiar with the matter.
Specifically, sovereign-wealth funds are willing to pay the firm in the hopes that if the market dives, at least some part of their portfolio will profit.
Panic is a profit-driver for Mr. Taleb, who has gained renown for his pessimism, a viewpoint that proved prescient in the market collapse of 2008.
The interest from the likes of the Chinese and Middle East funds, which control some of the world’s biggest pools of money, suggests more mainstream adoption of Universa’s bearish conviction.
The outcome of the talks isn’t certain, according to a person familiar with the matter.
But if the investments materialize, they likely would boost the Universa fund’s client assets from $6 billion to about $10 billion, two people familiar with the matter says.
CIC didn’t respond to a request for comment by the WSJ.
“Healthy investments are those that produce goods that humans need to consume, not flat-screen TVs. … Stocks are not a robust investment. Make sure you have a garden that bears fruits.”
Nassim Nicholas Taleb, author of ‘The Black Swan’
Read the full post at The Swapper.
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