Markets

Michael P. Regan is a Bloomberg Gadfly columnist covering equities and financial services. He has covered stocks for Bloomberg News as a columnist and editor since 2007. He previously worked for the Associated Press.

(Updated )

If you've spent any time listening to pundits on financial television this week, you know there's a crisis going on with a certain Asian currency.

We're talking, to state the obvious, about the fact that financial pundits haven't the foggiest idea how to properly pronounce China's currency, the yuan. The most popular pronunciations appear to be:

1. "You on." As in: "Were you on drugs when you decided to go long China last summer?"
2. "You wan." Like how they say "you want" in Philly: "You wan dat cheesesteak wit onions or witout?" "You wan me getcha anudder bottle a wooter outta da 'frigerator?" 
3. "Juan." Like the sweathog on "Welcome Back Kotter." (RIP.) 
4. "Renminbi." This makes no phonetic sense based on the spelling of "yuan," but has become quite popular nonetheless. 

Bitcoin Again? Seriously?
Yes, it's back. The digital currency had a good week as stock markets crumbled.
Source: Bloomberg

Sadly, this confusion is only the tip of the iceberg when it comes to how baffled investors are with China. As a result, stocks got off to their worst start to a year ever. Meanwhile, gold and bitcoin were among the only long trades to be in this week, proving that the two most annoying people at the Thanksgiving table -- the crazy, drunk uncle and the millennial coder bro -- may have been right after all.

Indeed, in perusing Bloomberg's most-read stories to identify the Gadfly Trade of the Week, the only headline about people making any real money was almost too depressing to click on: "Meet the Two Brothers Making Millions Off the Refugee Crisis in Scandinavia."

Which brings us to Martin Taylor, a London hedge fund manager who wins because he's like Kenny Rogers: He knows when to hold 'em, knows when to fold 'em, knows when to walk away, and knows when to run. 

Beating a benchmark index is great and all, but when it comes to measuring success or failure as a hedge fund manager there are three other metrics that matter most, at least as far as we are concerned here among the nonaccredited investor class in the financial press: 

1. The name of your fund must have a really cool backstory. 
2. You must not lose the majority of investors' money and/or end up with more than, say, one or two members of the front office in prison.
3. When you quit the game, you must send out an epic goodbye letter that people will talk about for years. This is similar to what's known as "dropping the mic" among rappers, as well as those of us who can't rap but like to pretend we're not in our mid-40s and living in the suburbs. 

Taylor's score on all three metrics is off the charts. First, his fund's name, Nevsky Capital, harks back to the days of Alexander Nevsky, a 13th-century Russian warrior who defeated German crusaders by luring them onto the thin ice of a frozen lake and letting the frigid water do much of the dirty work. Second, though the fund hit a rough patch in the last two years,  its 18.4 percent annual gain since 2000 was nearly 10 times more than average peers in the HFRX Index, according to a Bloomberg article on the statement. 

Lastly, his explanation for why he's shutting down is a classic Festivus-season airing of the grievances that pushes all the hot buttons of the day. See this column by Bloomberg View's Mark Gilbert for the details of the rant, but the executive summary is that old-school  stock picking just isn't that fun any more because of the influence of computerized trading, the popularity of index funds and -- most timely -- the "obfuscation and distortion of data" from China that has made forecasting next to impossible.  

All these points surely hit home with countless old-school investors who've tried to out-trade the robots, the indexers and the People's Bank of China for far too long. The frustration with competing with algos, especially, will resonate. At the risk of overdosing on nostalgic Americana in an effort to explain Taylor, this is reminiscent of the old folk tale about John Henry, a 19th-century railroad worker who "died with a hammer in his hand" while trying to compete with the disruptive new technology of a steam-powered hammering machine.

There's something romantic and heroic to the notion of dying with a hammer in your hand to prove you're better than a machine. But as Taylor's tale shows, maybe there's a happier ending to be had if you realize when the time is right to drop the hammer, collect your hammering wages and get on with your life. If you must die with a trademark item in your hand, maybe there are better choices than hammers -- say a sand wedge, or a martini glass, or the frozen, decapitated head of some vanquished crusader. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

(Corrects spelling of "Welcome Back Kotter" in third paragraph.)

  1. This is at least according to the movie version of events. Wikipedia is a bit skeptical. 

To contact the author of this story:
Michael P. Regan in New York at mregan12@bloomberg.net

To contact the editor responsible for this story:
Daniel Niemi at dniemi1@bloomberg.net