Tudor Visions: Bear Market Rally in Stocks, More Weakness for Dollar

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Paul Tudor Jones made some interesting observations in a letter to investors which Bloomberg picked up this weekend…

On the Bear Market Rally:

Slowing growth in China and the return of front-page stories on swine flu may be “further catalysts for global equity markets to pause in September”.

“Impressive counter-trend rallies are a feature, not an oddity, of secular bear markets, we are not inclined to aggressively chase the market here. Many doubts remain about the sustainability of this recovery, most prominently the weakness of household income growth.”

On the US Dollar:

Tudor said it expects the U.S. dollar to fall by the end of the year as money managers diversify their currency reserves.  “Reserve accumulation and diversification trends will be persistent and mutually reinforcing the direction of the U.S. dollar,”

On Japan:

Tudor was “intrigued” by Japan, saying that a loss in lower-house elections by the ruling Liberal Democratic Party could lead to increased investments in the country by the end of the year, according to the letter.

Regular readers of TRB know that I’m a follower and fan of PTJ’s career, even though I’m kinda upset about his quest to erase any trace of the 1987 The Trader miniseries that popped up recently on Youtube.  He doesn’t come off that badly in it, and he’s 22 years younger than he is now.  So what if he’s seen drinking a beer while he trades Deutsche Marks at 2 in the morning?  Also, the haircuts, the brick-sized cell phones etc were so cool…the footage looked like that Beastie Boys video for Sabotage would have if it were based on Wall Street instead of cop shows.

Anyway, here’s the full article:

PTJ on the Bear market Rally (Bloomberg)