There aren't too many better investors than the billionaire hedge fund manager Paul Tudor Jones. Jones launched Tudor Investment Corp in 1980. In 1987, Jones correctly predicted the stock market crash on Black Monday when the Dow Jones fell by an incredible 22%. More than four decades after launching Tudor Investment Corp, Jones still serves as the chief investment officer of the company, which has reportedly generated average annual returns of 19%, according to Hedge Fund Alpha. These accomplishments have made Jones and his firm a must-watch for stock ideas. Recently, Tudor Investment Corp sold Boeing (BA +5.42%) and bought this popular cryptocurrency instead.
Safety concerns and regulatory issues crushed Boeing
Tudor Investment Corp sold its equity position in Boeing in the third quarter and owns many more put options than calls. Puts make money when a stock declines by a certain amount, so Tudor appears bearish on Boeing. Tudor Investment Corp owns more than 2,600 positions, so we don't know if Jones had anything to do with this sale.
If you've been following the news this year, you've likely seen Boeing in the headlines. In January, an Alaska Airlines flight using a Boeing plane was cut short after one of the plane doors was ripped off its hinges. Other airlines found more loose parts on Boeing 737 MAX 9 Jets, leading to scrutiny from the Federal Aviation Administration (FAA) and National Transportation Safety Board (NTSB).
NYSE: BA
Key Data Points
This is not the first time Boeing has experienced problems with its 737 MAX Jet. Two crashes with fatalities in 2018 and 2019 led to the global grounding of the 737 MAX Jet, and Boeing's MAX Jet failed 37% of audits conducted by the FAA. After the January door incident, the FAA allowed the 737 MAX 9 to resume flights but halted production of the MAX 9 until Beoing got better control over its inspection process.
Boeing recently resumed production of the 737 MAX Jet following a labor strike, which ended with Boeing granting its workers a 38% pay bump over the next four years. The struggles have translated into more than $8 billion in losses this year and negative operating cash flow, a trend expected to continue in 2025. Boeing will likely always be an important part of the American economy, but it's going to take time to turn this company around.
A crypto fan
Jones has been vocal about his support of Bitcoin (BTC +1.09%), the world's largest cryptocurrency, and Tudor Investment Corp backed up this view in the third quarter of the year, increasing its position in the iShares Bitcoin Trust ETF (IBIT +1.22%) by more than 400%.
Jones has publicly expressed concern about the U.S. government's fiscal situation, including tens of trillions in debt and a fiscal deficit in which the government spends more annually than the revenue it generates. Jones believes inflation is the inevitable outcome of all this government spending, and said earlier this year on CNBC that "all roads lead to inflation."
US Public Debt data by YCharts
Jones has long viewed Bitcoin as a form of digital gold and therefore a hedge against inflation. Some also view Bitcoin as a flight to safety in times of uncertainty when geopolitical risk is high. Jones is not alone. The price of Bitcoin recently surpassed $107,000. While Bitcoin has often traded like a high-growth stock, it has also survived and rebounded during extremely high inflation and rising interest rate environments. Only 21 million tokens can be mined, and Bitcoin supply currently stands at 19.8 million. So far, Bitcoin advocates like Jones have been correct in their thesis, and the token seems to be accepted by the mainstream more and more each day.
