Stephen Diggle made a lot of money by trading volatility. The British pound fell to a record low against the US dollar on Monday.
Diggle invested 10% of the funds assets in sterling. He wants to use the currency to fund his UK investments, mostly stocks of companies that incur most of their costs in pounds. Businesses that use a weak sterling are more profitable.
The pound plummeted after the UK's new chancellor outlined a number of tax cuts. The Bank of England was forced to raise interest rates more aggressively because investors feared the cuts would increase the government debt and fuel inflation.
The pound looks cheap to Diggle, but he doesn't know if it will stay that way.
I'm not saying it's a low. He asked who the hell knew. Against an average of 5 or 10 years, sterling is very cheap.
The boss of Vulpes Investment Management questioned whether the decline in the pound was justified. The country has a lower debt-to-GDP ratio than many other developed nations, which could allow it to borrow more and not run into any major problems.
Insider requested a comment from vulpes.
Diggle started his hedge fund with $4 million. During a time when the US housing bubble burst, markets crashed, and a global financial crisis took hold, its assets under management peaked at almost $5 billion. All of its investors' money was returned in 2010.
During the financial crisis, the Vulpes chief made his name and fortunes. The author of "The Big Short" and the author of "The Greatest Trade Ever" both made money from the 2008 crash.
9 stocks that can weather a recession are shared by the chief investment strategist at a $42 billion firm.
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