 In This Issue
The Sharpe Angle Interview: Robert Koenigsberger CIO of emerging market investment firm makes the case for buying Ukrainian bonds  Investors are running away from Eastern Europe sovereign debt right now. Few are running in. Robert Koenigsberger is one of them. Amid the war, he's been buying Ukrainian bonds at the long end of the curve – 2033 bonds, which are currently trading at 33 cents on the dollar, up from their lows in the high teens. "Our base case is that Ukraine will continue to exist, we don't think it will be absorbed by Russia, it will continue to have debt stock," Koenigsberger, the chief investment officer of Gramercy Funds, a $5.5 billion emerging markets investment firm, said in an interview for the Delivering Alpha Newsletter. "I would not argue that the debt stock is worthless. Koenigsberger has been investing in emerging markets for more than three decades, with a stomach for distressed situations. He said he started his firm in the late '90s, buying Russian debt following its default on ruble-denominated bonds a year prior. But he said Russia today is very different from Russia in the late '90s. Therefore, he said he had no exposure to the country months before the invasion and has no intention of buying bonds, even as they teeter on the brink of a hard default. "After [the 1998] default, you know, a lot of the pain that Russia suffered back then wasn't necessarily all self-inflicted," he said. "A lot of the pain today is obviously self-inflicted." He's talking about the impact of sanctions and how they preclude the ability of Russia to service its debt in foreign currency. But if the country can't meet its obligations for two dollar-denominated bonds' interest payments in a month – a hard default – and it's still under sanctions, then there are going to be a lot of willing sellers and few possible buyers. "I see a bit of a bottoms up tsunami coming where there's inelastic supply that holders are told to stop holding this in a world where it's hard to get rid of holding it, which should mean lower prices," Koenigsberger said. "And then top down, you know, what is Russia going to look like, quote, 'the day after.'" In the grand scheme of things, whether or not Russia can and will pay interest on its external debt won't change its current standing in the world. "I don't really think whether they pay or not, it's going to make a difference as to whether Russia isn't an isolated economy," he said. And for many investors, including Koenigsberger, it's now hard to envision a scenario in which Russia is able to ingratiate itself back into the global economy anytime soon.
Hedge funds are doubling down on commodities bets Hedge funds have ramped up their commodity bets as prices surged during geopolitical turmoil, and managers with big exposure are reaping sizable profits.
The energy sector saw the most net buying from hedge funds last month compared to other groups of stocks, according to Morgan Stanley prime brokerage data. The combination of the buying and energy's outperformance resulted in net exposure reaching a two-year high for the hedge fund community, the data said.
Commodities have been a clear winner on Wall Street this year as global demand and the war in Ukraine strained supply. WTI crude oil topped $130 per barrel briefly last week — a 13-year high — during escalated geopolitical tensions. On the back of surging oil, the S&P 500 energy sector has rallied 30% this year, far outpacing the broader market. 
Other commodities prices have also shot up amid the disruption. Aluminum recently reached record highs, while wheat futures hit multiyear peaks amid a supply crunch. Nickel prices more than doubled in a matter of hours on March 8, climbing above $100,000 a metric ton amid a massive short squeeze. Heating Oil futures have surged more than 30% this year.
Contrarian value-focused hedge fund Equinox Partners, which is concentrated on precious metals miners and exploration & production companies, has returned over 14% year to date, according to a person familiar with the firm.
"They are good inflation hedges and good geopolitical hedges," said Sean Fieler at chief investment officer at Equinox Partners. "There is a longer term story. Metals are the energy of the future, and I think it's going to take the market some time to get its head around that."
Meanwhile, Soroban Capital made at least several hundred million dollars from its commodity bets since February, the Wall Street Journal reported. Soroban didn't respond to CNBC's request for comment.
Other notable investors are also doubling down on the energy sector.
Warren Buffett's Berkshire Hathaway continued to scoop up shares of Occidental Petroleum this week, bringing its total stake in the oil giant to over $7 billion after the recent buying spree.
Billionaire investor Leon Cooperman said earlier this week energy stocks are cheap relative to commodity prices. He said his two favorites are Canadian companies Tourmaline Oil and Paramount Resources. 
Delivering Alpha Headlines Big thoughts from the big money Leon Cooperman says stocks are still the best game in town Billionaire investor Leon Cooperman said he has become less optimistic about the market given the geopolitical risks, but he still believes that stocks are the best asset for investors right now. "Even though I'm not overly optimistic, I do think stocks represent the best game in town. Stocks are the best asset in a bad neighborhood," he said.
Brad Gerstner says tech is in the neighborhood of a tradeable bottom Altimeter Capital CEO Brad Gerstner said some tech stocks are at historic lows and could see a rebound soon. "We are in the neighborhood of a tradeable bottom. If you have a two- to three-year time horizon, there is no doubt that there are a lot of stocks that are going to be up well over 100% off this bottom," Gerstner said. Jeffrey Gundlach says stocks could roll over after a few rate hikes DoubleLine Capital CEO Jeffrey Gundlach said stocks are having a relief rally after the Federal Reserve's initial rate hike partly because equities are in extreme oversold condition. The so-called bond king warned that the market could roll over once the Fed raises rates a few more times.
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