Hedge Funds Ramped Up Leverage in Stocks Just Before Market Rout

Discussion in 'Wall St. News' started by helpme_please, Feb 29, 2020.

  1. https://www.bloomberg.com/news/arti...up-leverage-in-stocks-just-before-market-rout

    Individual investors weren’t the only ones falling in love with stocks right before they went south. Turns out the savviest of institutions were in equally high spirits.

    Hedge funds, which use borrowed money to amplify returns, went risk-on in a major way this month. Net leverage, a measure of industry risk appetite that takes into account long versus short positions, rose by about 5 percentage points, one of the fastest expansions in years, according to data compiled by Morgan Stanley’s prime brokerage unit.

    At Goldman Sachs Group Inc., clients have also ramped up their leverage after holding it steady since late 2019. At 48.4% on Thursday, the ratio stood at the 95th percentile over the past year, the firm’s data showed.

    The burst of optimism is a departure from much of 2019, when hedge fund stock pickers resisted the the rally.
     
  2. Figured as much once Ray Dalio said he was super bullish on stocks in 2020
     
    FriskyCat likes this.
  3. ironchef

    ironchef

    Don't tell me they listened to @dozu888 too?
     
  4. dozu888

    dozu888

    well this goes along nicely with what I been saying - HFs are short term speculators... they are not in it for the long term otherwise the subscribers could have just bot SPY.... so the speculators need to be knocked off the rally train before it goes much further NORTH!!