Investor Who Lost Millions Finally Gives Up on His China Bet

Mark Hart of Corriente Advisors was long-time and vocal bear on China and its currency. It seems that he recently gave up on his short position.

And now he’s lost his conviction: Hart, who called for a more than 50 percent yuan devaluation last year, has turned bullish on China and its currency.

Bloomberg wrote a long profile of his short Yuan bet last year: Mark Hart: The Seven-Year Short

Hart's Yuan short was long and painful trade:

Even at its weakest point, the yuan never dropped enough to move the needle on Hart’s wager, which started in 2009. His dedicated China funds, which had fixed lifespans, bought options that were designed to deliver one of two outcomes: a massive payoff in the event of a currency crash, or a near total wipeout if a major devaluation failed to occur.

The trade went against him almost from the beginning. After holding steady for the first six months of 2010, the yuan strengthened for the next three and a half years. It eventually reversed course, but the sharp devaluation that Hart had anticipated never materialized. His second China fund shut in December. All told, he lost between $240 million and $250 million.

Hart has changed his views and moved on. He thinks the crackdown on capital outflows and overseas M&A deals was effective. 

 

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