Kyle Bass sure seems to know when a housing crisis is on its way, but he doesn’t seem to know when energy stocks are going to go back up or stay stagnant. At least this seems to be the reason why his hedge fund management firm, Hayman Capital has been performing poorly despite others in his sector doing all right. It was reported that Bass recently went to meet with energy tycoon, T. Boone Pickens to discuss where oil prices were going. Pickens had mentioned that the “domestic supply wasn’t going to exceed storage space,” and to Bass that must have meant that oil prices were going to see a rebound. But it certainly hasn’t happened that way, and now it seems Hayman capital has lost some money as a result.
It wasn’t just 8 years ago that Kyle Bass became a legend in the real estate community when he had predicted a housing crisis leading into 2008. Bass had worked as a senior manager for several large investment banks including Prudential Securities, Bear Stearns and Legg Mason, and he was an ambitious young investor who had promised he would have a financial firm of his own soon. Sure enough he followed through on that promise when he started Hayman Capital, and while others seemed to downplay the fallout that was coming in the housing market, Bass prepared for the storm by investing in credit default swaps, a move that paid off handsomely.
But as Useful Stooges reports, Kyle Bass seems to have lost his way somewhere in between 2008 and now. It can’t totally be explained, but he’s lost profits along the way, and probably mostly due to his poor choice in company. The first poor choice in that regard is Cristina Fernandez de Kirchner, the former president of Argentina. Somehow, Kyle Bass’s money got tied to her country, and his associations there hurt his company’s reputation, even more so when he tried to defend Fernandez de Kirchner’s decision to default on the country’s debt. Kyle Bass’s second bad choice of company was GM, the automobile producer that found itself in big trouble over failed safety features. And last but not least, Kyle Bass got tied up in a patent abuse scandal when he tried to hurt pharmaceutical stocks and then sell them at a low price. Perhaps karma has struck back at Bass for his terrible associations.