By James Anderson. Originally published at ValueWalk.
Late last week Paul Tudor Jones told the world that he was going long bitcoin on top of his already public bullishness for gold price exposure.
A famed hedge fund manager, one who wields nearly $40 billion in assets under management, and himself reportedly a five-fold fiat Federal Reserve note billionaire. What does he cite as the drivers for his gold bullion and BTC bets?
Paul Tudor Jones On Gold
According to Jones, investors need to throw away the financial playbook of the past decade and return to monitoring old-school fundamental data such as the now exploding M1 fiat currency supply supplies around the world.
Investors need to prudently bet some capital of the potentially fastest horses in the coming monetary inflation race to debase. Highlighted in his letter are asset classes such as financials, gold, bitcoin, bonds, commodities, long short fiat currency trades, and top Nasdaq tech stocks.
Described is how after this current deflationary wave hits, responding price inflation may eventually come about later in the 2020s. This is a big motivation as for looking for the best investment horses so to speak under such a scenario.
Tudor Investments apparently believes that the fastest horse in the coming years may be bitcoin, yet too in this letter they also illustrate the potential for the US dollar gold price to more than triple in value too. Gold did such a feat in only one year of time (Jan 1979-1980) and the conditions are already again presently currency created (high relative fiat M1 supplies).
With gold bullion, today one has limited loss potential with solid upside precedent. In terms of bitcoin, the upside potential is perhaps today even greater than gold. Yet too one should consider the potential valueless downside of still a somewhat new technology and asset class, and position bet sizes accordingly.
Downside considerations first and foremost. Risk only what you are willing to lose on bitcoin. Risk with gold bullion that capital you refuse to lose outright.
In the video above, we delve into a bit about Paul Tudor Jones’ past and present investing strategies. Using his words to highlight some of his evergreen investing and trading thoughts.
And importantly too in the video embedded above and in the tweet thread below we cover some present day highlights and charts from his firm’s recent letter issued to their clients called, “THE GREAT MONETARY INFLATION.”
THE GREAT MONETARY INFLATION
by Paul Jones & Lorenzo Giorgianni (10 pg, tweet thread)Re: #Gold $Gold $GC_F $IAU $GLD $PHYS & #Bitcoin $BTC #BTC $USD pic.twitter.com/kiKW09AG2W
— James Henry Anderson (@jameshenryand) May 14, 2020
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