Hugh Hendry - The Crash Ahead and Opportunities of a Lifetime

Hugh Hendry is one of a handful of legendary investors whose views on markets are always worth strong consideration. Among that group, none are more determined to generally remain out of the news. Luckily, Hendry was recently willing to discuss his opinions with the Financial Times. While he remains bearish on the BRICs and Europe, his take on the US is slightly more optimistic. But don’t get too excited:

He believes that financial markets are single-digit years away from a crash that will present investors with opportunities of a lifetime. “Bad things are going to happen and I still think the closest analogy is the 1930s.”

Professional money managers may not have the luxury staying defensive but, for other investors who believe Hendry’s view may prove true, the lesson is clear: Preserve capital.

Points of Public Interest

1. Restraining unit labor costs is a right-wing conspiracy - Steve Randy Waldman discusses how the Federal Reserve’s explicit actions are helping reduce labor’s share of output over time.
2. The rule of more - A former professor of mine, Susan Dudley, is quoted on the subject of inconsistent cost-benefit analysis that allows the regulatory system to be gamed. (h/t Cafe Hayek)
3. Keeping an Eye on Wealth Creation - Renowned investor Hugh Hendry continues to expect a Chinese hard landing and, most importantly, expresses his view that “ the road to hyperinflation is via hyperdeflation.”
4. Hayek, Equilibrium and Complexity - Paul Omerod succinctly explains the importance of Hayek’s thinking to the study of complex systems.
5. The Longest Quarterly Letter Ever - Legendary investor Jeremy Grantham offers his updated investment outlook and continues to recommend patience. (h/t Zero Hedge)