Last year’s bear market pushed many investors deep into the red, but hedge fund manager Neal Berger has bucked the trend. Berger is the founder and president of Eagle’s View Capital Management. The hedge fund’s Contrarian Macro Fund produced returns of more than 160% in 2022 by using futures contracts on short stocks and bonds, valuations of which Berger saw as skewed by years of easy money. He joins other hedge fund managers like Satori Fund’s Dan Niles, who have successfully grown their wealth by taking short positions in the market during a turbulent year. “The fundamental core thesis of the contrarian macro fund is that the global central bank’s stance on liquidity has changed 180 degrees from a liquidity infusion stance to a liquidity withdrawal stance,” he told CNBC’s Street Signs Asia on Thursday. Berger said the $25 trillion injection of liquidity into the global financial system over the past decade has led to “massive” asset price inflation. And while central banks around the world are now scrambling to unwind bloated balance sheets, the process is likely to take “many years” and have a negative impact on the market, he added. “The massive injection of liquidity has given all asset prices a tailwind for a dozen years. The reversal of this liquidity injection will now be a huge headwind for asset prices for the foreseeable future,” he said. “My bible is price action” That’s why the experienced fund manager is sticking to his proven playbook. The Contrarian Macro Fund currently holds short positions in S&P 500 futures, US 10-year note futures, German Bund futures and Japanese government bond futures, Berger told CNBC. “As a trader, price action is my bible. I am a price action student and I will trade the market in accordance with the longer term trends,” he said. He noted that the one-year trend of all asset prices like stocks, bonds, and crypto is down. “I have to follow the price movements of the markets and it would be arrogant of me to predict that this downtrend in asset prices will end now,” he added. Berger said investors should be patient and watch price movements “over a period of weeks and months” rather than days to determine if trends have really changed. And while many investors want to “hit bottom,” Berger said he’s “okay with missing the first step.” “If we have real move up and we’re going to go up a few 100% like we’ve been doing for the last decade or so, it’s okay to miss the first 10% to be sure the trends are trending.” have done so,” he added.
