Opinion
Citrone: Shutting down a fund during downturns betrays investor trust
“I really value the track record, the integrity, and the trust that investors have placed with me for so many years. I just think that would be so disappointing to fold up shop during difficult times.”
Prediction Not checkable as stated
Citrone: $3 Trillion Liquidity Drain Will Hit Asset Prices Significantly
“As we take three trillion out, it has to have a significant impact on asset prices in my view, and we haven't even started.”
Insight
Robertson and Soros Exited Full Positions Immediately Upon Losing Conviction
“The first thing is when they lost conviction in an idea, they got out. They didn't wait around. They didn't get half the position out. They just got out of the position and they took whatever the market price was.”
Disclosure
Tiger Management Was Down $225M on Thai Baht Short Before Devaluation
“I can remember they moved the band stronger against us. So at one point we were losing two hundred and twenty-five million dollars on the position.”
Insight
The Best Shorts Have Flawed Business Models or Face Bankruptcy
“I think the best shorts are ones where there's either a fundamental flaw in the business model or is ultimately going to go bankrupt.”
Insight
Citrone: Macro investors without tech understanding are at a big disadvantage
“I think if you don't understand what's going on in technology in this world, you're at a big disadvantage, even if you're just a macro investor and just doing macro.”
Insight
Emerging Market Equities React Slower Than Debt and Currencies
“Also, I find that in a lot of these markets, especially in emerging markets, the equity markets are really the most inefficient markets. They tend not to react as quickly as the currency or the debt.”
Prediction Not checkable as stated
Citrone: India will be the world's new growth engine
“We think India will be the new growth country of the world.”
Prediction Didn’t hold up
Citrone: Europe will enter recession within months if not already
“I think Europe is, if not in recession now, be in recession within a few months.”
Insight
Credit Volatility Is Half of Equities; Currency Volatility Is One-Third
“We think of it, equities, vol is the highest, and then credit is about half of that, and the currency is about a third of equity vol, generally speaking.”
Prediction Held up
Citrone: Hedge fund fees will continue to decline
“The fees are lower, they're going to be lower.”
Insight
Funds Must Consult External Contacts to Prevent Internal Groupthink
“I think it's really important to try to not get groupthink within the organization to be thinking and talking to people outside the organization that also look at these markets and these positions and see what they think and what's their view and how are we di…”
Assertion Not checkable as stated
Very Few Hedge Funds Hold Discovery's Top 10 Positions
“Now, when I look at my portfolio, our ideas are so different than other people's ideas. I've went through my top 10 longs. Very few hedge funds would have any of the names I have in the top 10. The same thing on the short side.”
Prediction Not checkable as stated
Citrone: Markets May Bottom in Six or Seven Months at Lower Levels
“It's possible the markets may bottom in the next six or seven months, but probably at much lower levels than here.”
Disclosure
Discovery Lost Money in 2019 on Trump Administration Regulatory Reversals
“In 2019, we had two large positions that were required regulatory issues in the U.S. And the U.S. Government to make certain issues. And under the Trump administration, things changed dramatically and they were never consistent. So we had two ideas that I thin…”
Disclosure
Citrone Managed Capital for the Soros Family for Over 20 Years
“I also managed a lot of money for the Soros family for over 20 years. And I used to speak to George very frequently the first five years or so, almost every day.”
Disclosure
Discovery Capital Generates 80% of Ideas From Top-Down Macro Analysis
“And I would say that we generate probably 80% of our ideas from our macro side of things, but then we can populate them with securities that are much more efficient using the bottom-up analysis.”
Disclosure
Discovery Holds 120 to 150 Positions Across 10 Macro Themes
“We have probably about 10 themes on at a time, and then each of those themes may have 10 to 15 positions, so we're between a 120 to a 150 positions.”
Disclosure
Discovery Will Hit 25% Net Short When Expressing Severe Macro Concern
“Well, we'll get to 20, 25% net short if we really get incredibly concerned.”
Disclosure
Discovery Capital Launched With $5M, Including $4M of Citrone's Own Capital
“We started the fund with five million dollars with one million of fee payment. Four of it was mine.”
Disclosure
Citrone Has Woken Up at 3:00 AM Nightly for 23 Years
“So we have a 24 hour trading desk. I get woken up at three o'clock in the morning every night and have for 23 years. I see the close of Europe. I see the open of Asia. It really gives me an edge. I can feel what the markets are doing a little bit. We do some t…”
Insight
Citrone: Central Banks Meet and Share Ideas Extensively Through BIS
“Central banks talk a lot to each other. I never really understood how much they do speak to each other, especially now through the BIS, they meet quite frequently and they do share ideas and thoughts.”
Insight
Citrone: Analysts who refuse to change views when facts change are the most dangerous
“The worst analyst is the one who just gets dug in his position and just says, okay, no, no, no, even though the facts have changed, my view hasn't changed. That's the dangerous analyst. Being able to change your mind is a very valuable thing in this business. …”
Insight
Three-and-a-Half Hours of Undisturbed Sleep Beats Seven Interrupted Hours
“The key is the first three and a half hours that you sleep. So I always try to get to bed before 1130, because you need that first three and a half hour REM sleep. If you get that three and a half hour REM sleep, studies have shown that you'll be much more res…”
