As fears over Greece and other peripheral European countries continue to build, one money manager says investors shouldn’t keep money on the sidelines.
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With yields on 10-year Greek paper trading close to 30 percent, Hans Humes, President of New York-based hedge fund Greylock Capital, says snapping up the sovereign debt is a no-brainer.
“I’ve been in this market for a long time and when you see a sovereign debt obligation trading at close to 10 cents to the dollar, it’s best to just close your eyes and buy it. That’s priced like a call option without an expiration,” he said.
Humes suggests that, for private investors at least, the risk of investing in Greek debt has dissipated since the restructuring earlier this year.
“If there is another restructuring [of Greek debt]…. it will probably be an amendment of terms [not a headline restructuring]” he argues. “I think if there’s going to be any other modifications on the debt that Greece has outstanding, it’s going to have to come from somewhere else other than the private sector. “