George Soros' Hedge Fund Adjusts Three Holdings

Legendary investor George Soros has recently filed three updated positions with the SEC through his hedge fund firm Soros Fund Management. Firstly, Soros has filed a 13G on BPZ Resources (BPZ). The filing was made due to activity on November 10th, 2009 and they now show a 5.58% ownership stake in the company with 6,415,700 shares. This is an increase of 1,034,035 shares (a 19% boost). Back on September 30th, 2009 they owned 5,381,665 shares per their most recent 13F filing. So, within the past two months Soros has added a decent chunk to their pre-existing BPZ position.

Secondly, George Soros has also filed an amended 13G on Global Ship Lease (GSL). This was filed due to activity on November 13th, 2009 and they are now showing an ownership stake of 7.45% of the company with 3,750,000 shares. This means that Soros' hedge fund has sold a large portion of their position. As we covered in Soros' previous GSL stake, he used to own 13.66% of the company with 6,847,753 shares. What's interesting to note here is that of his previously stated position, 3,750,000 of those shares were represented by warrants. Seeing how Soros currently only holds 3,750,000 shares as per the updated filing, they have sold all of their common stock (3,097,753 shares worth) and now solely own warrants (with 3,750,000 shares issuable upon exercise of warrants held). The situation becomes more intriguing when you consider that he has sold shares at a substantial loss given that he was holding since before the reverse merger in this name and his cost basis is likely above $6 per share while it currently trades around $1.50. The warrants are more difficult to sell and aren't necessarily worth a whole lot, but we'll continue to watch to see what they do with the remainder of the position.

Lastly, we also see that Soros Fund Management has filed an amended 13G on Audiocodes (AUDC). The filing was due to activity on November 9th, 2009 and they now own 0% of the company with 0 shares. Taken direct from the filing we see that "As of November 9, 2009, the 2.00% Senior Convertible Notes due 2024 held for the account of Quantum Partners were tendered to the Issuer pursuant to the put option in that certain Convertible Note indenture and accepted for payment by the Issuer on November 10, 2009 and as such, each of the Reporting Persons may be deemed to be the beneficial owner of no Shares issuable upon conversion of the Convertible Notes." So there you have it, they no longer have a position in AUDC. For more activity from Soros, check out post detailing changes to three of his other positions.

As we mentioned in one of our hedge fund news updates, Soros cautiously believes the market is overdue for a correction. He and many other fund managers have been expecting this for a while, yet the market continues to rally higher. Investment strategist Jeff Saut recently attributed this factor to under-invested portfolio managers and performance chasing as the year-end approaches. We'll have to wait and see if we get the pullback that so many have been looking for. More of Soros' thoughts on the crisis laden financial markets are detailed in his latest book, The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means.

While the above are individual position updates reflected by separate 13G filings with the SEC, keep in mind that we will also be penning a detailed post on their entire portfolio in our hedge fund portfolio tracking series, so check back to see what other positions George Soros owns.

Taken from Google Finance,

BPZ Resources is "an independent oil and gas company focused on the exploration, development, and production of oil and natural gas in Peru and Ecuador. The Company has rights and license agreements for oil and gas exploration and production covering a total of approximately 2.4 million acres, in four blocks, in northwest Peru."

Global Ship Lease "acquires and charters vessels to container shipping companies. The Company was incorporated to acquire a fleet of containerships of diverse sizes."

Audiocodes "designs, develops and markets enabling technologies and system products for the transmission of voice, data, fax and multimedia communications over packet networks, which it refers to as the new voice infrastructure. The Company’s products are sold primarily to original equipment manufacturers (OEMs), system integrators and network equipment providers in the telecommunications and networking industries."

Jeff Saut: Underinvested Managers & Performance Chasing Fuel Further Upside

Raymond James chief investment strategist Jeffrey Saut is back with his weekly market commentary. This week he takes a look back at their call many weeks ago to be cautious in the markets given that they felt things were melting up and were due for a pullback. He questions that call and wonders if they made a bad decision. Saut then goes on to note that he thinks the upside in markets actually continues.

In Saut's commentary last week, we noted hints of him 'giving in' to the rally and that many other portfolio managers were doing the same. Saut sticks with these thoughts again this week as he thinks the upside will be driven by a few factors. He mainly cites game theory in that under-invested portfolio managers have to get into the markets in order to catch up to their benchmarks before year end. Many managers right now have 'bonus risk,' and then ultimately 'job risk' as they can't be underperforming the markets after the large rally this year. So it seems he thinks the market melt up will continue based on performance chasing and cash on the sidelines coming back into the market.

In the end, Saut does not want to see the S&P 500 fall below 1083 as that would ultimately shift his view. He ends his note by mentioning the seemingly overlooked fact that the Japanese stock market is certainly breaking down now; something definitely worth paying attention to.

Embedded below is Jeff Saut's investment strategy for the week of November 23rd, 2009 (RSS & Email readers come to the blog to view it):



You can download the .pdf here.

Check out more of Saut's investment strategy where he examines whether or not this is the beginning of a new secular bull market as well as some of his past market commentary.