Adam Fisher, chief investment officer of CommonWealth Opportunity Capital, says European sovereign debt will rise while Japanese bonds fall.
Betting against European bonds would be a “widow-maker” trade, Fisher said at the Sohn Investment Conference in New York on Wednesday.
“The 30-year bond in Japan may be the most overpriced security on the face of the Earth,” he said.
Low interest rates haven’t stimulated private-sector borrowing, especially in Japan, and it’s unlikely that they will in Europe, according to Fisher. Public borrowing must replace the lack of private debt growth and that’s more likely to occur in Japan than in Europe, he said.
Fisher said the firm is making the Europe-Japan wager through forward contracts.
CommonWealth managed $1.3 billion in assets including leverage as of Jan. 31, according to regulatory filings. Fisher co-founded the firm, which wagers on macro-economic events, in 2008.