Hugh Hendry Embraces The Central-Planning Matrix: “I Am Taking The Blue Pills Now”

Hugh Hendry’s Eclectica Fund has had a great Q4 (up 3.3%, 4.0%, and 5.0% in the last 3 months) despite portfolio risk being quadruple his ‘old normal’. How did he achieve this? He begins… “There are times when an investor has no choice but to behave as though he believes in things that don’t necessarily exist. For us, that means being willing to be long risk assets in the full knowledge of two things: that those assets may have no qualitative support; and second, that this is all going to end painfully. The good news is that mankind clearly has the ability to suspend rational judgment long and often… He who hangs on to truth has lost. The economic truth of today no longer offers me much solace; I am taking the blue pills now.”
Via Hugh Hendry’s Eclectica Fund’s Letter to Investors,
Apples are not the only fruit
There are times when an investor has no choice but to behave as though he believes in things that don’t necessarily exist. For us, that means being willing to be long risk assets in the full knowledge of two things: that those assets may have no qualitative support; and second, that this is all going to end painfully. The good news is that mankind clearly has the ability to suspend rational judgment long and often.

This post was published at Zero Hedge on 12/31/2014.