Who is Paolo Pellegrini?

Group 1:

Who he is?
Who is this relatively unknown man? If you don’t know him you should. He played an integral part in the research and investment ideas that lead to Paulson’s 570% return in 2007 due to the mortgage mess. In 2008, he left hedge fund Paulson & co to start his own called PSQR Management LLC, a global macro fund.

Portfolio Performance
In 2008 he was up over 50% this year. In 2009 he is up over 80%. He made money in 2008 by shorting a lot of financial ETFS and he started shorting long term treasuries (or betting on rising yields). Pellegrini is also bullish on commodities, especially those that are scarce or of daily necessity. In particular, he likes oil and has been buying oil futures. He likes commodities since he sees global competition for them elevating. Given this commodity thesis, he also likes the Australian Dollar as the country benefits from their natural resources.

Future thoughts on the Market
Pellegrini still has a gloomy outlook for the economy. He sees the market essentially trading sideways and could even generate negative returns once you adjust it for inflation as he calls for "anemic real returns." He cites budget deficits, household debt, and increased regulation amongst other things. He has also been shorting long-term Treasuries and still going long crude oil in a wager that was formulated on the basis of dollar devaluation. He cites massive stimulus programs, huge corresponding deficits, and the fact that the US is now a debtor nation. This is also the reason for the currency's value dropping.

More in depth article
http://www.bloomberg.com/apps/news?pid=20601109&sid=akryRHYHS0Sg
Look for Paolo Pellegrin’s Bloomberg Interview on October 2nd.