Hedge Funds – Perry International Capital Partners

“I thought by now you’d realize, there ain’t no way to hide your lyin’ eyes.”

Stagflation reigns. Slow growth (2.5%) with rising inflation (4%) — driven by the rising cost of labor (+5%) — is the very definition of a stagflating economy. This forecast remains the dominant theme for the economy, markets, and investors. Stagflation has been the Perry International Capital Partners (PICP) forecast for two years, and we continue to be more worried about rising inflation than we are about slower growth.

“The problem with leverage is that you have to pay it back.”

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75% of the Perry Capital Portfolio remains in AAA-rated, very short maturity, and very liquid securities.
I remain underweight the equity market because the valuation metrics of risk assets are not discounting for
persistent inflation and a slowing economy to the degree necessary to be attractive. I would rather watch from
the sidelines at 5% until the strategic risk/reward is in my favor. I must say, though, that the Nasdaq 100 (QQQ)
performance y-t-d is impressive. Perhaps A.I. is a paradigm shift as impactful as the internet.

“The problem with leverage is that you have to pay it back.” Read More »