Skip to main content

Steve Cohen on trading, global macro

If you caught our last post on Steve Cohen's ISI chat with Paul Tudor Jones (coverage courtesy of Dealbook), it's highly likely that you clicked through to read the details of Steven's interview.

Here's one item from that discussion that really grabbed my attention, Steve Cohen talking global macro:

"...Mr. Cohen, who said probably 25 percent of his investments were made outside the United States, has been emphasizing to his traders that global macro themes are more important than ever in investing.


For this reason he went to Davos, Switzerland, last month for the World Economic Forum and said that he found “the development of the next phase of the consumer economy in China is very intriguing.” He recognized that there “could be more situations like Egypt” and “you have something going on here that could be a tinderbox.”".

This piece of info really jumped out at me for a few reasons.

Firstly, as far as I know, Cohen has not been identified as a global macro trader in the past. SAC Capital seemed to grow from Cohen's roots in proprietary stock trading, with SAC's traders eventually taking on a larger role in fundamental analysis as time went on.

The fact that such a prominent, fundamental and technical-driven US stock trader is now stressing the importance of global macro themes and their influence on markets is quite noteworthy.

His recent comments to PTJ on the firm's growing exposure to international investments were also touched on in an earlier, 2008 interview with AR:

"...
How much does SAC invest outside the U.S.?

[SC] Probably 15 to 20 percent of our activity is outside the U.S. There’s a lot of opportunity for growth in both Europe and Asia. The game is changing. Stock markets are starting to develop all over the world, and that creates opportunity....
"

This brings to mind two separate interviews, with
Passport Capital's John Burbank and California investor Michael Burry, that we shared last fall in our global macro post series. Both stressed the importance of international investing and the profound influence that global macro themes now have over US markets.

The observations made by Burry and Burbank were soon echoed by well-known hedge fund manager, David Einhorn, who noted the shift that had occurred in his investing style due to the impact of big picture, macro trends.

These interviews are a rare glimpse into the thinking of some of our most astute investors, and are all must hear/must read material. Hoping you will be informed by, and profit from, them.

Related articles and posts:

1. Must hear interview with John Burbank - Finance Trends.

2. Michael Burry: an up & coming macro star? - Finance Trends.

3. Macro themes dominate investing world - Finance Trends.

Popular posts from this blog

Nasdaq credit rating junked.

S&P cut Nasdaq's credit rating to junk status citing debt burdens and its questionable strategy to buy a controlling interest in the London Stock Exchange. Financial Times reported that the exchange's counterparty credit & bank loan rating were lowered fromm BBB- (lowest investment grade rating) to BB+. The change will increase Nasdaq's borrowing costs should it wish to pursue aquisition targets. For an earlier look at the exchange consolidation trend that brought about Nasdaq's push for a stake in the LSE, please see "Exchange fever" .

Clean Money - John Rubino: Book review

Clean Money by John Rubino 274 pages. Hoboken, New Jersey John Wiley & Sons. 2009. 1st Edition. The bouyant stock market environment of the past several years is gone, and the financial wreckage of 2008 is still sharp in our minds as a new year starts to unfold. Given the recent across-the-board-declines in global stock markets (and most asset classes) that have left many investors shell-shocked, you might wonder if there is any good reason to consider the merits of a hot new investment theme, such as clean energy. However, we shouldn't be too hasty to write off all future stock investments. After all, the market declines of 2008 may continue into 2009, but they may also leave interesting investment opportunities in their wake. Which brings us to the subject of this review. John Rubino, author and editor of GreenStockInvesting.com , recently released a new book on renewable energy and clean-tech investing entitled, Clean Money: Picking Winners in the Green Tech Boom . In Clean ...

Jesse Livermore: How to Trade in Stocks (1940 Ed. E-book)

If you've been around markets for any length of time, you've probably heard of 20th century supertrader, Jesse Livermore . Today we're highlighting his rare 1940 work, How to Trade in Stocks (ebook, pdf). But first, a brief overview of Livermore's life and trading career (bio from Jesse Livermore's Wikipedia entry). "During his lifetime, Livermore gained and lost several multi-million dollar fortunes. Most notably, he was worth $3 million and $100 million after the 1907 and 1929 market crashes, respectively. He subsequently lost both fortunes. Apart from his success as a securities speculator, Livermore left traders a working philosophy for trading securities that emphasizes increasing the size of one's position as it goes in the right direction and cutting losses quickly. Ironically, Livermore sometimes did not follow his rules strictly. He claimed that lack of adherence to his own rules was the main reason for his losses after making his 1907 and...