Jul 28, 2010, 08.37 AM IST
Corporations in the United States are in "much better shape" than the market is pricing, and present strong growth opportunities even if the economy slips into a "double dip" recession, hedge fund manager Dinakar Singh said on Tuesday.
Singh, a former star trader at Goldman Sachs who oversees more than USD 9 billion at TPG-Axon Capital, said he thinks the world will know in the next six months whether the US economy will slip into a double dip, and chances are that it will not be as bad as some people have predicted.
"I think there are better opportunities in the US than you've seen in a generation," Singh said in an interview with Reuters on Tuesday at an annual Youth Inc charity trading insights round-table here.
Singh said he sees stronger opportunities in equities than in gold, government bonds or the credit markets, contrasting the views of some top fund managers like John Paulson and David Einhorn who have bet heavily on those asset classes this year.
"I think people are right to worry about the fear ... but I think they're wrong in ignoring that there's a ton of upside potential as well," Singh said.
He said his favorite long position in his fund was Stanley Black & Decker, on the view that the tool maker will strongly benefit from the USD billion merger last year and has been too closely linked to troubles in the housing and construction market.
His fund had increased his position in the stock to about 6 million shares, or around 3.7%of the company's shares outstanding as of March 31, according to a regulatory filing.
He said his favorite short bet at the moment is that the prices of US consumer staple company stocks will fall, as costs that the companies eliminated last year are rising again.
Singh said he sees the best risk-reward environments as India and Brazil, followed by the United States.
"In aggregate, there's no lack of growth now in the world," Singh said. "I can't recall a time in my life other than the Asian Crisis when you've had such a diversity of outlook."
(For more news on Reuters India, click http://in.reuters.com)
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