George Soros Hedge Fund Soros Fund Management 13F Filing: Q4 2008 ~ market folly

Monday, February 23, 2009

George Soros Hedge Fund Soros Fund Management 13F Filing: Q4 2008

This is the 4th Quarter 2008 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings preface.

Next up is Soros Fund Management ran by George Soros. Soros is famous for his stellar returns with partner Jim Rogers when they ran their Quantum fund. Now, he has carried his investment style over to his own firm, Soros Fund Management. Whether it be equities, bonds, currencies, debt, or commodities, Soros is more of a global macro player, seeking investments in whatever market they can gain an edge. So, keep in mind that these equity positions only represent a portion of the fund's overall holdings. They are not required to disclose holdings outside of equities, notes, and stock options. 2008 was an interesting time to be investing, to say the least. Recently, Soros detailed his thoughts about his portfolio from 2008 and it makes for a good read. His fund finished '08 up 8% as noted in our hedge fund year end performances post. His success in 2008 came from making correct bets on the US dollar and betting that short term interest rates in the UK would decline. Interestingly enough, Soros was down for much of the year, until he fought his way back with overtrading.

Soros is good to track because of his excellent macro sense and formidable track record as an investor. His thoughts on the current financial landscape are detailed in his latest book, The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means. Soros sees a vast consolidation in the hedge fund space in the near future, as we noted when we recently checked in on Quantum Fund ex-partners Jim Rogers & George Soros. If you want to get a better sense as to how Soros formulates his investment theses, we highly recommend reading his first book, The Alchemy of Finance. This book is a staple in our recommended reading list and after you read it, you'll understand why. We like to track Soros since he has a solid track record and a great macro sense. We'll see what he has in his portfolio this time around.

The following were their long equity, note, and options holdings as of December 31st, 2008 as filed with the SEC. We have not detailed the changes to every single position in this update, but we have covered all the major moves. All holdings are common stock unless otherwise denoted.

Some New Positions (Brand new positions that they initiated in the last quarter):
Merrill Lynch (MER)
Mylan (MYL)
Homex (HXM)
R.R. Donnelly & Sons (RRD)
Harmonic (HLIT)
Kinross Gold (KGC)
Streettracks Gold ETF (GLD)
Genworth Financial (GNW)
Solera (SLH)
CBL & Associates (CBL)
Discovery Communications (DISCK)
Discovery Communications (DISCA)
Yahoo (YHOO)
Amdocs (DOX)
Texas Instruments (TXN)
JB Hunt (JBHT)
Symantec (SYMC)
Cirrus Logic (CRUS)
Covidien (COV)
...among others

Some Increased Positions (A few positions they already owned but added shares to; major moves listed)
Petroleo Brasileiro (PBR)
Potash (POT)
Best Buy (BBY)
Hess (HES)
Conoco Philips (COP)
Union Pacific (UNP)
Arch Coal (ACI)
Schlumberger (SLB)
Lorillard (LO)
Teradata (TDC)
Google (GOOG)
Consol Energy (CNX)
Lattice Semiconductor (LSCC)
...among others

Some Reduced Positions (Some positions they sold some shares of - note not all sales listed, just the major moves)
Walmart (WMT)
Wind River (WIND)
JetBlue (JBLU)
...among others

Removed Positions (Positions they sold out of completely)
Research in Motion (RIMM), ishares Dow Real Estate (IYR), Powershares QQQ (QQQQ), Auxilium Pharmaceuticals (AUXL), Whiting Petroleum (WLL), Suncor (SU), Chesapeake Energy (CHK), International Rectifier (IRF), Buffalo Wild Wings (BWLD), Anheuser Busch (BUD), Frontline (FRO), Bank of America (BAC), Collective Brands (PSS), Companhia Siderugica (SID), Centennial Communications (CYCL), Entergy (ETR), Suntrust Banks (STI), Nasdaq (NDAQ), General Growth Properties (GGP), Kimco Realty (KIM), Bank of New York Mellon (BK), CSG Systems (CSGS), Tekelec (TKLC), GATX (GMT), Carmax (KMX), Echostar (SATS), Extreme Networks (EXTR), Amazon (AMZN), Radisys (RSYS), Medivation (MDVN), ITT Corporation (ITT), Micron Technology (MU), Alcatel (ALU)

Top 20 Holdings (by % of portfolio)

  1. Petroleo Brasileiro (PBR): 19.53% of portfolio
  2. Potash (POT): 9.4% of portfolio
  3. Merrill Lynch (MER): 5.84% of portfolio
  4. Best Buy (BBY): 5.79% of portfolio
  5. Hess (HES): 4.74% of portfolio
  6. Conoco Phillips (COP): 3.84% of portfolio
  7. Union Pacific (UNP): 1.77% of portfolio
  8. Arch Coal (ACI): 1.7% of portfolio
  9. Schlumberger (SLB): 1.56% of portfolio
  10. RR Donnelly (RRD): 1.48% of portfolio
  11. Homex (HXM): 1.37% of portfolio
  12. Consol Energy (CNX): 0.75% of portfolio
  13. Map Pharmaceuticals (MAPP): 0.62% of portfolio
  14. Walmart (WMT): 0.57% of portfolio
  15. Hologic (HOLX): 0.57% of portfolio
  16. Heinz (HNZ): 0.53% of portfolio
  17. JetBlue Airways (JBLU): 0.52% of portfolio
  18. Home Depot (HD): 0.52% of portfolio
  19. Lowes (LOW): 0.51% of portfolio
  20. Citi Trends (CTRN): 0.29% of portfolio

The major moves in Soros' portfolio come from energy and agriculture. He added large to his PBR and POT positions, among many other global growth type names. He definitely seems to think all these energy related names are attractive. He sold out of a lot of his Walmart (WMT) and all of his Research in Motion (RIMM). He also added heavily to his position in Best Buy (BBY). He also started a new, large position in Merrill Lynch (MER). Assets from the collective long US equity, options, and note holdings listed above were $4.6 billion. If you want to hear some more insightful thoughts from George Soros himself, head over to our post on Hedge Fund manager interviews or check out his recent interview with Fareed Zakaria to discuss the current crisis. This is just one of many funds in our hedge fund portfolio tracking series in which we're tracking 35+ prominent funds. We've already covered Paulson & Co (John Paulson), Carl Icahn, Warren Buffett, and Stephen Mandel's Lone Pine Capital. Look for our updates each day over the next few weeks.

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