Why has the so-called “smart money” been so dumb when it comes to gold? We interview Anthony Scaramucci of SkyBridge Capital on hedge funds and the yellow metal.
As the Founder and Managing Partner of SkyBridge Capital, a firm with nearly $8 billion that invest in various hedge funds, Anthony Scaramucci has his finger on the pulse of the hedge fund community.
“Most hedge funds finally wiped their hands of gold after the early Q2 plunge,” says Scaramucci, who cites Daniel J. Loeb’s Third Point fund as one such example. “But, some diehards like [John] Paulson (of Paulson & Co.) and [David] Einhorn (of Greenlight Capital) continue to hold reduced positions as depreciation and outright sales of gold and gold mining stocks have reduced their exposure.”
In some situations, according to Scaramucci, funds are long gold because they have to be. “It appears they are going to keep their share class funds around as that is their mandate – for now,” says Scaramucci, who says exposure has gone down by about a quarter compared to last year.
Even within a long gold play, there are differences in how a fund takes that position. “Some guys like [John] Burbank (of Passport Capital) have been long gold and short gold miners,” says Scaramucci, noting that there are also those who are outright short. “Some guys like Stephen Roberts of Horseman have been just short miners. And, some macro and CTAs (commodity trading advisors) have gotten short with relatively tiny positions in the past six months.”
So does Scaramucci believe in gold?
Watch the video above to hear Scaramucci's take on gold.