Hedge fund magnate Daniel Loeb is increasing his bets against a suddenly volatile stock market.

Following a quarter in which his two flagship funds posted losses, the head of Third Point said he is increasing short positions that proved to be profitable during an otherwise rough first quarter.

“An important shift in markets happened in the first quarter,” Loeb said Thursday on an earnings conference call for Third Point Reinsurance, which posted a 26 cent per share loss for the first three months of the year.

“Investors have become increasingly concerned about multiples, particularly since after many years of low rates, there finally was an alternative to equities in the form of relatively riskless two-year money,” he added.

Indeed, the quarter marked a number of changes, with rising bond yields being one of the biggest market movers.

In the years since the financial crisis, the search for yield had forced most investors into higher than normal stock allocations, fueling a nine-year bull market run that had seen few interruptions. However, major indexes have seen multiple dips into correction territory so far in 2018, and allocations to bonds have been rising as government yields have hit multiyear highs.

Loeb’s major funds at Third Point posted losses for the first quarter. The Offshore Fund lost 0.6 percent and the levered Ultra Fund was off 1.5 percent, according to a letter he sent last week to clients.

The firm posted an 18.1 percent return for 2017, which was below the S&P 500’s total gain of 21.8 percent.

In addition, he disclosed during the conference call that the reinsurance company’s portfolio was off 0.2 percent for the first quarter, actually outperforming the S&P 500, which declined about 0.8 percent.

However, he said an equity short allocation returned 2.4 percent, “and we intend to further increase short exposure to fundamental single names and quantitative-derived baskets in 2018, and less on market hedges to dampen volatility and reduce net exposure.”

Stock pickers like Loeb generally like periods of market volatility as it presents pricing opportunities.

“Looking ahead, we still see S&P growth in the U.S. supported by fiscal stimulus in 2018,” he said. “We remain focused on maintaining a portfolio that can deliver compelling risk-adjusted returns across market cycles and will opportunistically adjust the portfolio across expected further waves of volatility.”

Loeb said the firm also is watching the economy “to see if a recession, which we don’t think is close, might be getting closer.”