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Elliott hedge fund warns investors of ‘fear of being wiped out’ in market
Elliott Investment Management, a hedge fund with about $80 billion in assets, warned investors that the current market resembles the boom before the Great Depression and introduced the term FOGO, or “fear of getting obliterated.” The Wall Street Journal reported this.
Elliott Investment Management, the hedge fund founded by Paul Singer and managing about $80 billion in assets, issued one of its sharpest market warnings in years in an October letter to investors, The Wall Street Journal reported.
The fund assessed that the current situation resembles the boom of the 1920s that preceded the Great Depression, while nearly all major bear-market signals have already flashed. Elliott identified the U.S. federal budget deficit, persistent inflation, private-credit risks and an investment bubble in artificial intelligence among the risks.
In the letter, the fund introduced the term FOGO (Fear of Getting Obliterated) and warned that market sentiment could shift sharply from FOMO, the “fear of missing out” that drives investors to chase returns, to FOGO.
Elliott has adopted a defensive strategy focused on preserving capital. During the first nine months of the year, however, the fund’s return was less than 2%, while the S&P 500 gained nearly 13%.
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