Louis Bacon optimistic about macro investment in 2013

Louis Bacon, founder of New York- based Moore Capital Management, has reassured investors that opportunities exist for those who are willing to play the worldwide capital markets.

The direction of the financial markets has shifted rapidly in recent years through a series of issues with stocks, bonds, currencies and central banking policies.

Other uncertainties with European economies such as Spain and Greece, political unrest in Egypt, the U.S. elections and ‘fiscal cliff’ have all contributed to the volatility in the markets.

Louis Bacon communicated the difficulty of such a climate in a letter to investors last summer. He said: “The result has been short start-stop-start growth cycles that exacerbate trendless volatility, particularly relative to returns.

“The bulk of rallies occur at turning points on low trading volume. Subsequent momentum and trends are much less rewarding.”

Despite these negative influences, Moore Global Investments managed an impressive recovery during December’s trading period with a 4.29 percent increase, making an 8.82 percent increase in total for a year when the market was down by 1 percent.

The company has carried this form into the New Year with an addition 3.58 percent growth in January reinforcing Bacon’s idea that the markets still pose opportunities to savvy macro investors.

Moore Global has put this increase down to positive currency markets. The firm, which manages a total of $13.5 billion, attributes the recovery of the markets down to improving currency markets in Europe and decreasing strength of the Yen due to Japan’s own controversial monetary policy.

Bacon also expects central governments to use their own finance to boost their economies as other measures seem to be failing. Coupled with the Japanese Stock Market’s positive performance, while the Yen is falling, it suggests a great opportunity for macro investors.

Bacon also highlights a positive outlook for long-term growth in the U.S. economy, although there may be some fluctuations as congress debate budget cuts. He suggested that the cuts may affect the first-quarter GDP but any negative change would be short-term.

Any negative turns in the U.S. will undoubtedly affect other markets but Louis Bacon thinks this provides a fantastic opportunity for macro investors and long-short equity managers to exploit if they are able to navigate potential trouble spots.