"Our extraordinary times offer extraordinary opportunities, but as with most opportunities, there will be winners and losers." So began legendary macro investor Paul Tudor Jones ' October investor letter. Jones runs Tudor Investments, one of the largest macro hedge funds in the world, where he makes top-down bets about how markets will move. In his letter, he set out what he believed would happen in the markets as a result of the Federal Reserve's second round of quantitative easing, aka QE2. His bets: commodities, emerging markets, and U.S. government bonds.

The bet
Jones believed that the market would react to the large increase in liquidity much the same way it did in 1999, when the fear of the Y2K computer disaster led central banks to pump liquidity into the market to compensate for any possible global communication and banking system failures. Most of that excess liquidity ended up in just a few markets.

These markets were the winners from the past nine months. The winners continued to outperform, and the losers continued to underperform. According to Jones, in 1999, "half of the winners in the first nine months made it into the top 10 list of the last quarter, and 70% of the losers in the first three quarters found themselves among the 10 worst performers of the fourth quarter."

The result
How did his bets do? I list the top five asset classes below, as well as ETFs and trusts that represent them, and stocks that represent the trend:

Market Representative Performance* Stock Performance*
Silver iShares Silver Trust (NYSE: SLV) 50.4% Silver Wheaton (NYSE: SLW) 52.3%
Emerging markets consumer basket Dow Jones Emerging Markets Consumer Titans Index Fund (0.7%) Philip Morris International (NYSE: PM) 13.3%
U.S. bonds iShares Barclays 7-10 Year Treasury (NYSE: IEF) (4.5%) N/A N/A
Gold SPDR Gold Trust (NYSE: GLD) 6.6% Rubicon Minerals (NYSE: RBY) 24.5%
India Nifty Fifty iShares S&P India Nifty 50 Index (15%) ICICI (NYSE: IBN) (13.8%)

Source: Yahoo! Finance.
*Performance from Oct. 1, 2010 to Feb. 25, 2011.

U.S. bonds
Ten-year Treasury bonds hit their highest prices in October, subsequently falling as investors took profits on their bond holdings. Large investors may have also been expecting a larger QE2, which a fall in bond prices would also reflect. Needless to say, this part of Jones' bet went south.

Emerging markets
Jones' bets on emerging-market consumers and India both fell. The emerging-markets consumer basket fell 0.7%, while India's Nifty Fifty fell 15%, underperforming the S&P 500's 16.1% return. Although a bet in the consumer-titans index fund would have gone nowhere, Philip Morris International managed to gain 13.3%, just lagging the S&P 500's return. While neither of these are huge losses, this second part of Jones' bet did not do as expected.

Precious metals
Jones' precious-metals bet accounted for the biggest gains of his strategy, outperforming by a long shot. Silver crushed the market's return, while gold underperformed but was still positive. Silver streamer Silver Wheaton more than kept up with the metal's return, and gold exploration firm Rubicon Minerals surpassed gold's gains. This part of Jones' bet perhaps more than made up for the underperformance of the other parts. For more on silver, check out precious-metal expert Eric Sprott's case for silver.

My Foolish takeaway
Even a great investor has trouble investing from a top-down perspective, playing on big macroeconomic themes; the economy is just too complicated. This type of top-down investing is not for me. I'm much more comfortable investing with the likes of Warren Buffett in strong companies and shareholder-friendly managers. For some opportunities that fit Buffett's investing style, click here to get our free report: "3 Stocks Warren Buffett Wishes He Could Buy."

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.