Profiting by going against bullish market

New York

THE stock market has been rising for years, hitting new highs almost every week. So how is it that one of Wall Street's most bearish investors can claim to have profited strongly over this period?

Universa Investments, a hedge fund founded by Mark Spitznagel, is one of the few firms that is set up with the aim of making money in an economic and financial collapse. In the market turmoil of 2008, Mr Spitznagel earned large returns. Large pessimistic bets usually lose a lot of money when stocks are rising, as they have ever since 2009. But Universa is saying that its investment strategy has been able to produce consistent gains since then, including a 30 per cent return last year, according to firm materials that were reviewed by The New York Times. In comparison, the benchmark Standard & Poor's 500 stock index in 2013 had a return of 32 per cent with dividends reinvested.