I like long dollar vs. sterling and euro too, and long treasuries,

Good stuff Aki. You can see some of Thiels latest portfolio moves here: http://www.marketfolly.com/2009/07/peter-thiel-clarium-capitals-huge-oil.html

Tyler, I don’t totally disagree, but Soros wouldn’t be around today if his bet against the pound hadn’t worked. Let’s say the british government had implemented a buy pound program when Soros was short. Even though his fundamentals were correct he would have been killed when other traders piled on (sort of like we’re seeing in the treasury bonds today). No one would know who he is and he’d be chalked up as another rogue trader. I’m totally against diversification that puts your entire portfolio at risk of an overnight beheading….

“Diversification is overrated because you can go broke trying to diversify. Henry Ford never diversified, Bill Gates didn’t diversify. The way to get rich is to put your eggs in one basket, but watch that basket very carefully. And make sure you have the right basket. ” – J. Rogers

I like the “feel” of this strategy better. Diversification sometimes feels like spreading eggs into baskets that I dont really care for. Rogers says here and Thiel implies that you can be a successful disciplined focused investor. Interesting thoughts in light of the money management discussions on this site/forum.

Are you going to get more information about Clarium’s June performance? I collect these things because it is my favorite hedge fund. I am big fan of Peter Thiel. I guess I find global macro to be a high octane strategy that requires lots of risk, although one has to be very flexible. They need to have the ability to read the sentiment of the market, have an understanding of macroeconomics, the securities market, and politics, some comprehension of technical analysis, and the ability to change one’s mind. BTW, Clarium uses three-sigma volatility as their main risk control. They assume all their positions have a correlation of 1, and add up the individual volatility of each position and 3-sigma volatility of their portfolio cannot exceed 15% of NAV. Clarium follows George Soros, and they believe diversification is bullshit in some cases. To quote Stanley Druckenmiller:

“Soros has taught me that when you have tremendous conviction on a trade, you have to go for the jugular. It takes courage to be a pig…As far as Soros is concerned, when you’re right on something, you can’t own enough”