Below please find the link to Bill Ackman's presentation on the HKD/USD trade that he gave recently at the delivering alpha conference. Basically he thinks the Hong Kong dollar (HKD) is undervalued and thinks that the USD in respect is depreciating against it so there will be some readjustment in the not too distant future (next five years). This readjustment possibility presents a very asymmetric bet (i.e. heads I win tails I don't lose much).
Ackman says there are four principal revaluation alternatives:
1. Allow the HKD to float
2. Repeg the HKD to a trade-weighted basket
3. Repeg the HKD to the RMB
4. Keep the USD peg, but revalue to an appropriate exchange rate
It is an interesting presentation to say the least. What is interesting is that this is very much a shift from his typical stock / real estate bread and butter. This may worry some investors but personally I think its interesting when people scour the world for value (ala Michael Burry).
Enjoy the presentation:
Bill Ackman's Presentation on the Hong Kong Dollar: Linked to Win