Billionaire hedge fund manager Paul Singer, founder of the $27 billion Elliott Management, called the bond market “the biggest bubble in the world.”
Speaking at the CNBC Delivering Alpha Conference, Singer’s best idea to the room of investors was to sell their bonds.
“I think owning medium to long-term G-7 fixed income is a really bad idea. By removing these things that are bad ideas, that’s a helpful think. Sell your 30-year bonds. ”
The bond market is $60 trillion. Right now, nearly $10 trillion in fixed income is negative yielding. He added that these prices and yields contain a “tremendous, never-before seen asymmetry between potential further reward and risk.”
Another investment Singer favors right now is gold.
He thinks that the precious metal is “underrepresented in many portfolios as the only money and store of value that has stood the test of time.” He added that at current prices gold is “undervalued.” For Singer, owning gold is “opposite confidence in central banks.”
Singer is among a number of hedge fund managers who have become increasingly vocal against central bank policy. He said that central banks have created a “tremendous increase in hidden risk.”
Earlier at the conference, Bridgewater’s Ray Dalio warned of the diminishing returns on the increasing amounts of debt being accumulated by the world’s central banks.
“There’s only so much you can squeeze out of the debt cycle,” he said.
Julia La Roche is a finance reporter at Yahoo Finance.