Sequoia Fund Q4 Letter: Added to Alphabet, Exited Fastenal & Danaher

Ruane, Cunniff & Goldfarb is out with Sequoia Fund's fourth quarter letter.  They returned 20.07% for the year.

At the end of 2017, their top 10 holdings were:

1. Berkshire Hathaway (BRK)
2. Alphabet (GOOG)
3. Mastercard (MA)
4. Constellation Software (CSU)
5. Dentsply Sirona (XRAY)
6. TJX Companies (TJX)
7. Rolls Royce (RR.LN)
8. Charles Schwab (SCHW)
9. CarMax (KMX)
10. Liberty Media

They exited positions in Fastenal (FAST), Danaher (DHR), Emcor, Croda, Tiffany (TIF), and Costco (COST).  They've also trimmed stakes in BRK, MA, O'Reilly (ORLY), Waters, and TJX.

They've added to positions in GOOG, Hiscox, Jacobs, Omnicom, and Wells Fargo.  They've also started new investments in Credit Acceptance (CACC) and Royal Vopak, Priceline (PCLN).

They've been concentrating their portfolio a bit more, and their cash levels have gone down some.

Embedded below is Sequoia Fund's Q4 letter:



You can download a .pdf copy here.

For other recent fund letters, we've also posted Greenlight Capital's Q4 letter.

Ruane Cunniff (Sequoia Fund) Investor Day Transcript 2017

Ruane, Cunniff & Goldfarb recently released the transcript from their investor day a few months ago.  Known as the managers of the Sequoia Fund, David Poppe and his team talk about many of their investments.

As of the end of June, their top ten holdings were:

Berkshire Hathaway (BRK A / BRK B) 11.28%
US Treasury Bills & Cash 8.65%
MasterCard (MA) 7.72%
Alphabet (GOOGL & GOOG) 6.5%
TJX (TJX) 5.93%
Dentsply Sirona (XRAY) 5.3%
Carmax (KMX) 5.04%
Constellation Software (CSU) 4.83
Rolls Royce (RR.LN) 4.74%
Liberty Media Corp 4.13%

They talked about what they often find in their top investments:

"Hopefully that gives you a sense of the kinds of companies we want to buy: high-quality enterprises trading at discounts to their intrinsic value, with long-duration growth opportunities.  I would note that every great outperformer we have purchased during my eighteen years here - from Fastenal to Idexx to Mastercard to O'Reilly to Precision Castparts to Sirona to TJX - had something in common.  And it was not a low P/E at the time we first invested.  It was a long growth runway and, most often, a long organic-growth runway."

The transcript that follows touches on their thoughts on Priceline.com (PCLN), the threat of Amazon (AMZN) to various businesses, and some of their holdings like TJX and O'Reilly Auto, as well as other positions like Rolls Royce and Charles Schwab.

Embedded below is Sequoia Fund / Ruane Cunniff's 2017 Investor Day Transcript:




You can download a .pdf here.

For more from this firm, you can view their transcript from last year here as well.

What We're Reading ~ 6/22/17

Payments industry overview: Analysis of Visa, Mastercard, American Express [Value Seeker]

Brexit in reverse? [George Soros]

If you can't explain something in simple terms, you don't understand it [Kottke]

On the popular 'FANG' stocks [AQR]

How to survive the retail crisis: a master class from T.J. Maxx [WSJ]

Starbucks' Howard Schultz has something left to prove [Fortune]

Blockchain 101 [CFA Institute]

How a 36-year old Wall Street prodigy saved Burger King [Business Insider]

Why grocery retail is the 'holy grail' [Bloomberg]

A look at subprime auto debt [NYTimes]

Profile of Citron's Andrew Left [NYTimes]

Mary Meeker's 2017 internet trends report [KPCB]

Essilor's CEO on an eyewear megamerger with Luxottica [FT]

Why is Trump causing chaos in Washington but not in the stock market? [Five Thirty Eight]

Chuck Akre's Talk at Google: Three-Legged Stool Investment Construct

Chuck Akre of Akre Capital Management recently had a talk at Google about investing entitled "The Peregrinations of an English Major Trying to Solve the Investment Puzzle."

If you're unfamiliar with Akre, he focuses on finding long-term compounders and runs a somewhat concentrated portfolio.  Here's notes from his talk:


Chuck Akre's Talk at Google

- Reads voraciously to this day.  Cited one of the very first books he liked: The Money Masters.  Also noted that 100:1 in the Stock Market is the book he took the idea of compounding from.  Said he read The Intelligent Investor as well as business biographies.

- What makes a great investment?  "Rate of return is the bottom line of all investing."

- Looks at free cashflow return and focuses on valuation as the key to compounding; buy it right.

- How do they identify investments that will generate above average returns?  "We like to fish in the pond of high return businesses."  Asks: what kind of returns on capital?  What are the net margins?  Thinks an 'average' business returns high single digits.  Cites Mastercard (MA) and Visa (V) with 30% margins.  "What is it about the essence of that business that allows them to earn returns that cause them to have a big bullseye on their back?"

- Three-legged stool:  Their investment construct that lets them think in simple terms.  First leg is the quality of a business: a high return business.  Second leg is operations: want management to have skill and integrity (a demonstrated record) and treat investors as partners.  Third leg is reinvestment: would love the company to put cash back into the business if there's great opportunity.  Cited the book Dear Chairman (which we've reviewed here).

- "I have never been able to learn from other people's mistakes.  I have to make my own."

- Wants to be an investor in a business rather than a speculator in shares.

- His goal is to compound capital at an above average rate while incurring a below average level of risk.  Volatility is only a risk in the short run.

- Akre's separately managed accounts over 27 years have compounded at 12.7% versus S&P at 9.4%.  Also has a partnership that's done 15.25% versus S&P 9.2% and mutual funds that have done 13.2% annual.

- Mastercard: originally purchased in 2010 at around $22 with regulatory worries around Durbin amendment.  Business has fantastic returns, had a low valuation (13-14x at the time).  "Their returns are so high they can't possibly find a place to reinvest their money, so our compounding is diminished modestly because of that."

- Moody's (MCO): Bought in January 2012 at $39.  Any company that wants debt has to get a rating on it and it's basically an oligopoly: MCO, S&P (SPGI), and Fitch.

- Enstar (ESGR): Been involved for 10 years.  They buy insurance that's in run-off.  Paid 3 times book when he bought shares. 

- Quotes Einstein: "You should make everything simple as possible but no simpler."  "We cannot solve our problems with the same thinking we use to create them."  "The only source of knowledge is experience."  "Imagination is more important than knowledge."  That last quote is what's on the front of Akre's book:

- Two of his best investments (100 baggers): Berkshire Hathaway (BRK.A) and American Tower (AMT).  "Most of the time you can buy these businesses at reasonable valuations... sometimes you can buy them at a steal."

- On selling: "The most difficult thing to do in our business is not sell, if you're a long-term investor."

- Bought Visa (V) because they have concentration limits in their funds and were bumping into that with their stake in MA.  Did the same with SBA Communications (SBAC) as it relates to their AMT position.  Gaining more exposure to the themes via competitors since individual position limits kicked in.

Embedded below is video of Chuck Akre's talk at Google:



We've covered many other investor talks at Google, including:

- Howard Marks' talk at Google

- Michael Mauboussin's talk at Google

- Jim Grant's talk at Google

What We're Reading ~ 11/30/16

Warren Buffett's meeting with University of Maryland students [UMD]

Is the next financial crisis on its way? [Steve Eisman]

A write-up on the impending Hilton (HLT) spinoff [Clark Street Value]

CBRE (CBG): industry deep dive to detect an emerging moat [Punch Card]

A look at Discovery Communications (DISCA/K) [Contrarian Edge]

Sustainable sources of competitive advantage [Collaborative Fund]

Why deep learning matters and what's next for AI [Algorithmia]

The unexpected genius of Facebook's Mark Zuckerberg [Fortune]

Google's online travel adventure upsets its biggest advertisers [Bloomberg]

A billionaire's dreams of creating a guns empire [NYMag]

If oil refiners crash, so will the economy [WSJ]

Mastercard, Visa set to reap spoils of India's war on cash [Bloomberg]

How Best Buy (BBY) fought Amazon [WSJ]

The evolution of media & entertainment: conversation with CEOs [YouTube]

How to get comfortable with being umcomfortable [Inc]

Why gut feelings may really help you make risky decisions [Washington Post]

Why stoicism is one of the best mind-hacks ever devised [Aeon]

Ruane Cunniff (Sequoia Fund) Investor Day Transcript 2016: Rolls Royce, Valeant & More

Ruane Cunniff Goldfarb, managers of the Sequoia Fund, recently released the transcript from its investor day.  In it, they talk about many of their investments.

Their top ten holdings as of the end of the second quarter were:  Berkshire Hathaway (BRK.A/B), TJX Companies (TJX), MasterCard (MA), Alphabet (GOOG/L), O'Reilly Auto (ORLY), Mohawk Industries (MHK), Fastenal (FAST), Rolls Royce (RR.L), Constellation Software (CSU.T), and Dentsply Sirona (XRAY).

They outline their thinking on Rolls Royce and also address the Valeant Pharmaceuticals (VRX) saga, which they no longer own.

Embedded below is the transcript of Ruane Cunniff's 2016 Investor Day:



You can download a .pdf copy here.

What We're Reading ~ 3/16/2016

Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism [Jeff Gramm]

Two powerful mental models: network effects and critical mass [Andreessen Horowitz]

How to be wrong as an investor [A Wealth of Common Sense]

A look at the concept of moats in investing [Intrinsic Investing]

The great race: e-commerce in India [The Economist]

A look inside Google's DeepMind [The Verge]

Amazon's Echo brims with groundbreaking promise [NYTimes]

In-depth analysis of Moody's (MCO) [Value Seeker]

A look at Visa & Mastercard [JanaV]

American Express, Synchrony Financial & the changing credit card landscape [PunchCard]

Amex: cheap blue chip or value trap? [Value & Opportunity]

How credit cards tax America [Priceonomics]

After TV: Video's future will be bigger, more diverse & precarious than its past [Redef]

John Malone 'cable cowboy' faces test in rounding up the right mix of assets [Variety]

The television has a business model problem and it's killing good TV [Redef]

The craft beer bubble [VinePair]

The rise and final hours of Chesapeake's Aubrey McClendon [Bloomberg]

Sequoia Fund Investor Day Transcript 2015 (Ruane Cunniff & Goldfarb)

Ruane Cunniff & Goldfarb recently released their Sequoia Fund investor day transcript for 2015.  While the event took place back in May, it's still interesting to get their insight on their investments given their long term focus.

Sequoia Fund's investment management team discussed their thesis and outlook on numerous portfolio companies, including Valeant, Google, Mohawk, Idexx, Fastenal, Rolls Royce, TJX, O'Reilly, and many more.

At the end of the second quarter, Sequoia Fund's top holdings were:

Valeant Pharmaceuticals (VRX): 28.7% of portfolio
Berkshire Hathaway (BRK.A/B): 10.6%
TJX Companies (TJX): 5%
O'Reilly Automotive (ORLY): 4.3%
Fastenal (FAST): 4.2%
MasterCard (MA): 3.2%
Precision Castparts (PCP): 2.7%
Mohawk Industries (MHK): 2.5%
Idexx Laboratories (IDXX): 2.3%
Google (GOOGL): 2% 

This really is an interesting read in its entirety given their candidness about assessing their positions.

Embedded below is Sequoia Fund's investor day transcript for 2015:



You can download a .pdf copy here.

Sequoia Fund's 2014 Year-End Letter

Ruane Cunniff & Goldfarb is out with its 2014 year-end letter for its Sequoia Fund.  They returned 7.56% for the year and run a pretty concentrated portfolio of large bets.  At the end of the year, their largest holdings were: Valeant Pharmaceuticals, Berkshire Hathaway, TJX, Fastenal, O'Reilly Automotive, Mastercard, and Idexx Labs.

Their letter also outlines their latest thinking on the above companies, as well as some of their new positions like Richemont, Cabela's, and Constellation Software.

Embedded below is Sequoia Fund's 2014 annual report:



You can download a .pdf copy here.

Sequoia Fund Investor Day Transcript 2014

Today we wanted to highlight the transcript from Sequoia Fund's investor day earlier this year.  This is old (6 months ago) but is still worth reading due to the in-depth color they provide on their investments and the fact that they're long-term shareholders so most of the positions still remain in their portfolio.

Positions they talk about include Valeant Pharmaceutical (VRX), Allergan (AGN), Google (GOOGL/GOOG),  Mastercard (MA), TJ Maxx (TJX), Omnicom (OMC), IBM (IBM), Ritchie Brothers (RBA), Fastenal (FAST), Costco (COST), Berkshire Hathaway (BRK.A/B), O'Reilly Auto (ORLY), Rolls Royce (LON:RR), Precision Castparts (PCP), and more.

Embedded below is the Sequoia Fund's Investor Day Transcript: 



You can download a .pdf copy here.

And given their long-term focus, we'd also point you to Sequoia Fund's 2013 investor day transcript as well as Sequoia Fund's 2012 annual letter if you haven't read those either.

What We're Reading ~ Analytical Links 9/17/14

Edge, time arbitrage and the shame of short-term thinking [Lux Capital]

A fireside chat with Charlie Munger [WSJ]

Buffett on market valuation [Brooklyn Investor]

Bears at their lowest level since 1987, now what? [Yahoo]

8 lessons from the first year of a registered investment advisory firm [Reformed Broker]

Competition is for losers [Peter Thiel]

An independent Scotland could become an energy powerhouse [Fortune]

Britain needs greater unity not a messy break-up [George Soros]

The tollbooth businesses of Visa & Mastercard [Scuttlebutt Investor]

A discussion on Apple Pay [Twitter]

Why banks are buying into Apple Pay [American Banker]

Thoughts on what the Apple Watch means [Daring Fireball]

Hermes takes the long view in China [FT]

Inflection point for Western Union? [YGC]

Alibaba's coming out party & valuation [Aswath Damodaran]

Alibaba IPO is a bonanza for select firms [WSJ]

On the rise of NY regulator Benjamin Lawsky [Bloomberg]

There is no bond bubble [Barrons]

What We're Reading ~ Analytical Links 2/27/13

2013 comprehensive review of the best online brokerages [StockBrokers]

Vodafone's (VOD) European troubles: bad news = good news? [MicroFundy]

Investing: rules of the game [Dasan]

On buying near 52-week lows or 52-week highs [World Beta]

You're not as good an investor as you think you are [WSJ]

What Barnes & Noble (BKS) retail arm might be worth [NYTimes]

Mastercard (MA) aims at mobile payment market [Yahoo Finance]

Best Buy (BBY) takeover attempt by founder in jeopardy [Reuters]

Leveraged loan market on fire [SoberLook]

USA Mobility (USMO): Cheap, but for how long? [Barel Karsan]

The new MLP landscape [Barrons]

How to find the next Michael Kors (KORS) [The Street]

Loyalty programs, share buybacks drive Safeway (SWY) [Bizjournals]

Reed Hastings on the future of Netflix (NFLX) [GQ]

3-D printing is on the fast track [NYTimes]

Why medical bills are killing us [Time]

Chuck Akre's Presentation on MasterCard: Value Investing Congress

Continuing our coverage, today we're posting up more notes from the Value Investing Congress.  Below are notes from Chuck Akre of Akre Capital Management.  We've already posted up Akre on using good judgment in investing.  Below is his bullish case for MasterCard (MA).


Investment Idea: Purchase MasterCard (MA)

- Payment network, global GDP summation of transactions.  Royalty business on growth of consumer spending worldwide earning small piece of trillions of transactions across the world. 45% FCF return over last 5 years.

- Requires little capital to grow. 5 years was $680mm capex while after tax NI increase $1,900 over the same time (2002 to 2007).  Pricing power.  People: new CEO is solid. 

- Cash is 85% of world's transactions and MA will benefit from the shift to payments.  37% FCF margins in 2011.

- Management like share repurchase over dividends.  Could repurchase billions annually without levering up.

- ACH is banks system but not handle large number of small transactions rather built to handle few large transactions.


Question & Answer Session

Why prefer MA to Visa (V)? US domestic debit transactions, $0.42 interchange fee - Durbin suggestion to $0.11 per transaction (ended up at $0.22).  MA had mid-teens exposure to US while Visa had much more.  Market Folly note: A previous issue of our Hedge Fund Wisdom newsletter has an in-depth analysis of Visa.

The above notes are courtesy of Kyle Mowery from GrizzlyRock Capital.  Be sure to click here for other presentations from the Value Investing Congress.

Julian Robertson Bullish on Apple, Google, Mastercard & Visa

Legendary hedge fund manager Julian Robertson of Tiger Management recently sat down with CNBC's Maria Bartiromo to give his latest thoughts on the market. Tiger saw nearly 32% annual returns between 1980 and 1998.

Equities

He likes the tech sector and thinks the technology boom is far from over and he thinks these stocks can rally further. In particular, he likes Apple (AAPL), even without Steve Jobs, noting that the company would be trading "at 3 or 4 times" what it is now if this were 1980. He calls the multiple it's trading at now "ridiculous." Also, he likes Google (GOOG).

Robertson is also fond of the payment processors such as Visa (V) and Mastercard (MA). He likes these names as they don't bear credit risk (the banks do). We've long detailed Robertson's bullishness on these names in our Hedge Fund Wisdom newsletter as he's owned all the above stocks for some time now.

Currencies

In currencies, Robertson says he's finding opportunities in Europe by going long the Norwegian Krone. Around the rest of the world, he also fancies the Singapore dollar and Canadian dollar. Conversely, he likes shorting the Hungarian forint.

Interest Rates

Robertson also goes on to highlight that while interest rates continue to slide down, it wouldn't be hard for them to skyrocket higher. He points out that if a large seller were to sell US bonds quickly, rates could fly higher. A few years ago, we detailed Robertson's constant maturity swap (CMS) trade as he got hammered with his "short bonds" bet.

Lastly, Robertson expects Greece to default.

Julian's interview is embedded below (email readers come to the site to watch Robertson's interview):



To see the rest of Tiger's equity investments, head to our newsletter. For more on this legendary manager, head to our profile on Julian Robertson.

Todd Combs of Castle Point Capital Joins Berkshire Hathaway as Investment Manager

Warren Buffett just announced that Todd Combs of hedge fund Castle Point Capital will be joining Berkshire Hathaway (BRK.A) as an investment manager at the end of the year. Buffett and Charlie Munger have been tracking Combs for three years and Combs has been running his hedge fund for the past five years.

We'd hypothesize that in the intermediate term, Combs has been brought on as a replacement for Lou Simpson since Combs is said to take control of part of Berkshire's investment portfolio. Simpson, who manages the investments for Berkshire's subsidiary, GEICO, is set to retire at the end of 2010 (the same time when Combs is set to start). On the notion that Combs could manage all of Berkshire's investments, Buffett said, "He’s got the best chance of being the successor, but if we find the right guy or gal, we’d take that person, too."

In the past, many have questioned Berkshire Hathaway's succession plans and this year there has been much talk of Li Lu joining as an investment manager. However, Buffett has just revealed that Lu will be staying with his own fund. Buffett also emphasized that Berkshire's succession will include one person handling the CEO role, and then multiple individuals could still act as investment managers in a multi-pronged approach.

Why Todd Combs?

This is the question many people are asking as he doesn't seem to be particularly well-known. Here are some potential reasons for the hire:

First, his focus on financials. Given the recent financial crisis, Combs' familiarity with these companies and niche focus on the sector gives him an advantage. In an increasingly complex financial world (derivatives, etc), Combs' expertise will come in handy considering Berkshire owns very large stakes in financials including: Wells Fargo (WFC), American Express (AXP), US Bancorp (USB), Moody's (MCO), and M&T Bank (MTB).

Second, his risk management skills. Buffett apparently described Combs' performance during the crisis as, "pretty good." According to Bloomberg, Castle Point returned +6.2% in 2009, -5.7% in 2008, +19% in 2007, and +13.6% in 2006. In Berkshire's 2007 shareholder letter, Buffett discussed the topic of hiring investment managers. In it, he said that this person needs to be, "genetically programmed to recognize and avoid risk, including those never before encountered." Given this stringent requirement, it's obvious that Buffett and company feel Combs possesses a risk management skill-set that is beyond satisfactory. (And speaking of risk, Buffett recently talked about his worst trade).

Third, his personality blends with Berkshire's culture. According to the New York Times, Buffett said that, "He’s always been enamored with Berkshire. I know he’ll be good, but he’s the right type of guy. We don’t want someone who’s trying to figure out if they can make $100 million with us, or $200 million with the next guy." And, this ties somewhat into the next reason.

Fourth, his age. Given the fact that Berkshire's leading men Warren Buffett, Charlie Munger, and Lou Simpson are getting older, Berkshire wants to bring in younger talent that can add longevity to the company. At the young age of 39, Combs can slide into Berkshire's organization and stay there for many decades, just as Buffett has. And, based on his personality, it appears that Combs is in it for the long haul. Combs received his degree in finance and multinational business operations from Florida State University. He has experience working for Florida's comptroller as well as Progressive Insurance.

Castle Point Capital's Portfolio

Given Berkshire's stamp of approval, it's only appropriate to look under the hood at Todd Combs' hedge fund to see what he's invested in. The following were Castle Point's long equity holdings as of June 30th, 2010 according to their most recent 13F filing with the SEC. The new disclosures reflecting their Q3 portfolio will be released in the middle of November.

Keep in mind that you can see what Berkshire Hathaway and prominent hedge funds are investing in via our newsletter, Hedge Fund Wisdom. But for the time being, here's Castle Point's $279 million in reported assets:

New Positions
CIT Group (CIT)
Broadridge Financial (BR)
Leucadia (LUK)
Hartford Financial (HIG)
PNC Financial (PNC)
Wells Fargo (WFC)
Chatham Lodging (CLDT)

Increased Positions
Blackrock (BLK): Increased by 78.5%
Aercap (AER): Increased by 78%
Mastercard (MA): Increased by 70%
State Street (STT): Increased by 60%
Genworth Financial (GNW): Increased by 53%
Charles Schwab (SCHW): Increased by 43%
Annaly Capital (NLY): Increased by 43%
Western Union (WU): Increased by 36%
US Bancorp (USB): Increased by 27.5%
Chubb (CB): Increased by 27.5%

Reduced Positions
JPMorgan Chase (JPM): Reduced by 39%
MB Financial (MBFI): Reduced by 21.5%
Goldman Sachs (GS): Reduced by 18.4%

Sold Out of Completely
Assurant (AIZ)
Signature Bank (SBNY)
Reinsurance Group America (RGA)
TD Ameritrade (AMTD)
First Citizens Bancshares (FCNCA)
Two Harbors Investment (TWO)

Top 25 Positions

1. US Bancorp (USB): 8.2% of reported assets
2. Mastercard (MA): 7.3%
3. State Street (STT): 6.8%
4. Western Union (WU): 6.5%
5. CME Group (CME): 5.1%
6. Renaissance Re (RNR): 5.1%
7. Pennymac Mortgage (PMAC): 4.6%
8. Chubb (CB): 4.6%
9. Starwood Property Trust (STWD): 4.5%
10. Annaly Capital Management (NLY): 4.4%
11. CIT Group (CIT): 4.3%
12. Progressive (PGR): 4.1%
13. JPMorgan Chase (JPM): 4.0%
14. Goldman Sachs (GS): 3.8%
15. Charles Schwab (SCHW): 3.6%
16. Broadridge Financial (BR): 3.5%
17. Aercap Holdings (AER): 3.4%
18. MB Financial (MBFI): 3.4%
19. Genworth Financial (GNW): 2.9%
20. United America Indemnity: 1.9%
21. Blackrock (BLK): 1.8%
22. Leucadia National (LUK): 1.8%
23. Hartford Financial (HIG): 1.6%
24. PNC Financial (PNC): 0.8%
25. First Financial (FFBC): 0.8%

As you can see, Castle Point's portfolio is very financial-laden. And, they share the same large position in US Bancorp (USB) as Berkshire Hathaway. We'd also point out Combs' preference for payment processors & money transfer services such as Mastercard (MA) and Western Union (WU). These types of companies have been long favored by hedge funds we track. The last takeaway here is that he runs a somewhat concentrated portfolio as well.

So, at least one of Berkshire's future investment managers seems to be in place. Li Lu appears to be out of the running. The question that remains is, will there be more managers added? Only time will tell. You can view Buffett's past comments on succession plans here as well as a video that examines potential Berkshire successors here.

For more on Berkshire's new hire, Carol Loomis at Fortune penned an article here.

Goldman Sachs VIP List & Hedge Fund Trend Monitor: Stocks That Matter Most to Hedgies

Every quarter, Goldman Sachs releases a list of stocks predominantly owned by hedge funds. The aptly named Goldman Sachs VIP list (or 'Very Important Positions' list) aggregates positions held by hedge funds utilizing fundamental strategies. This is just one part of the data aggregation found in Goldman's quarterly Hedge Fund Trend Monitor and we'll detail the latest findings below.

These positions are derived from 13F filings that hedge funds file with the SEC and those of you with Bloomberg Terminals can find this compilation at: GSTHHVIP. First, some background performance of their VIP list. Goldman writes that the VIP list, "contains the 50 stocks that appear most frequently among the top 10 holdings of fundamentally-driven hedge fund portfolios. The basket of stocks that 'matter most' has outperformed the S&P 500 by 71 bp on a quarterly basis since 2001, with a Sharpe Ratio of 0.26. The VIP list underperformed the S&P 500 during 2Q 2010 by 268 bp (-14.1% vs. -11.4%). Since then VIP list has outperformed the S&P 500 by 247 bp (8.8% vs 6.3%)."

Last quarter, we posted up the previous iteration of the Goldman Sachs VIP list and for Q2 there are a few new additions to the list this time around including: Fidelity National Information (FIS), a stock many hedgies added after the company announced a leveraged recapitalization plan. Another new stock on the list, Comcast (CMCSA), has been a favorite of Columbia's University's value investing professor, Bruce Greenwald.

Two other stocks just added to the VIP list have been favorites of 'Tiger Cub' hedge funds as Andreas Halvorsen's Viking Global has a sizable position in Tyco International (TYC), and Stephen Mandel's Lone Pine Capital is bullish on Cognizant Tech Solutions (CTSH). Other stocks added to Goldman's VIP list in Q2 include: Barrick Gold (ABX), Viacom (VIA.B), Covidien (COV), Freeport McMoran (FCX), Covanta (CVA), Davita (DVA), Schlumberger (SLB), US Bancorp (USB), Halliburton (HAL) and General Electric (GE). These stocks previously did not have enough hedge fund ownership to make the cut, so it's apparent that hedgies were buying those names in Q2.

Without further ado, here are the top 10 stocks on the VIP list ranked by the number of hedge funds with the stock as a top 10 holding:

1. Apple (AAPL): 75 funds
2. JPMorgan Chase (JPM): 42
3. Pfizer (PFE): 36
4. Bank of America (BAC): 34
5. Microsoft (MSFT): 34
6. Citigroup (C): 32
7. Alcon (ACL): 30
8. Google (GOOG): 24
9. Exxon Mobil (XOM): 23
10. Mastercard (MA): 22

In our brand new quarterly newsletter, hedge fund wisdom, we highlighted that many hedgies had been adding Alcon (ACL) in Q2 and the stock consequently has now garnered a place in the top 10 of Goldman's VIP list. What's interesting is that 8 out of the 10 stocks above have seen negative returns year-to-date. Despite Apple's solid performance this year, the weakness in other top holdings could potentially be why so many hedgies are struggling. Mastercard (MA) recently hit a new 52-week low and many hedgies were buying at higher levels in Q2. This stock just broke into the top 10 of the VIP list this quarter.

On a sector basis, hedge funds had their highest weighting in consumer discretionary at 17% followed by information technology at 16%. One interesting find in Goldman's data is that stocks with the least hedge fund ownership have actually outperformed stocks with the highest hedge fund ownership concentration. This just ties into the notion of the hedge fund herd mentality that we've discussed before. Sometimes it's best to head in the opposite direction of the pack.

Embedded below is Goldman Sachs' Hedge Fund Trend Monitor report in its entirety for the second quarter. It includes the VIP list and much more:



You can download a .pdf copy here.

Keep in mind that you can receive complete portfolio updates on 20 of the top hedge funds in the industry via hedge fund wisdom by market folly, our brand new quarterly publication. Readers can receive a free sample issue here.

Stocks vs Bonds & Risk vs Reward: Value & Risk in the Eye of the Beholder

Herbert Abramson and Randall Abramson's Trapeze Asset Management is out with their second quarter market commentary and in it they touch on two choices that often confound investors: stocks versus bonds and risk versus reward. They argue that both stocks and bonds involve risk but given the current potential reward each offers, the choice is a no-brainer: stocks. Given the low rates associated with bonds these days, they believe these vehicles are more akin to cash than investments.

In particular, Trapeze (like many other value investors) have shifted their focus to undervalued large-cap stocks. The interesting dynamic here is that this is essentially the first time investors have been able to purchase such high quality companies at what many are deeming cheap prices. You'll recall that during the panic, cyclical and leveraged businesses declined the most and then subsequently rallied the most during 2009. High quality stocks were seemingly left behind and this theme has been highlighted by numerous managers and strategists including Jeremy Grantham, Legg Mason's Bill Miller, hedge fund manager Whitney Tilson, and many more.

Trapeze interestingly intertwines compelling valuations with contrarianism by highlighting the current investor distaste for equities. Just yesterday we highlighted how market strategist Jeff Saut viewed massive equity fund outflows as a possible contrarian indicator. Investors are fearful of numerous economic factors ranging from unemployment, to a double-dip recession, to deflation. This resulted in a stampede into bonds. Such positioning requires a dose of macro outlook and Trapeze's viewpoint appropriately falls in line with the "no double-dip" crowd.

Trapeze writes, "It has been argued that, if one takes a longer term horizon to smooth out the fluctuations, equities can be viewed as long-term bonds with an earnings yield in lieu of a bond yield and often with a fixed dividend yield, mostly reliable, mostly growing. In the current environment if one takes, say, a 5-year horizon to even allow for the possibility of an interim double-dip recession with a lower stock market from a poorer outlook for earnings, stocks should still be the preferred asset class in that extended period."

Many investors have often quoted Warren Buffett in saying, "Be greedy when others are fearful." Investors certainly seem more fearful of equities than they have been in quite some time. While equities haven't experienced extreme declines in absolute value, many investors have traded in their stocks for the supposed safety of bonds. And the problem with that, Trapeze argues, is that cash is desperately searching for return and yield; something that is currently better found in stocks than bonds. They feel that eventually all of the cash and fixed income parked on the sidelines will seek higher returns, eventually ending up back in equities.

In terms of specific stocks, Trapeze offers Clorox (CLX), Aflac (AFL), Kroger (KR), Aetna (AET), Hewlett Packard (HPQ) and Jack in the Box (JACK) as some of the large-cap stalwarts that they've been playing. Additionally, they also continue to hold positions in Oracle (ORCL), IBM (IBM), Walgreens (WAG), Wal-Mart (WMT), Mastercard (MA) and more.

For the bullish case on equities, we highly recommend reading Trapeze Asset Management's second quarter letter to investors in its entirety, embedded below:



You can download a .pdf copy here.

In the end, it's an epic and ongoing debate: stocks versus bonds, risk versus reward. Add in your stance on the macro environment and the decision is essentially made for you. However, what Trapeze is trying to illustrate is that such extreme pessimism (among other factors) can be interpreted as an opportunity for contrarian optimism. We'll end with another quote from Trapeze's letter: "Like beauty, value and risk too are often in the eye of the beholder."

To see what stocks prominent hedge funds have been investing in, head to our brand new quarterly newsletter, hedge fund wisdom by market folly (receive a free sample here). And if the above article is just too bullish on equities for you, last month we presented the opposite side of the coin with David Gerstenhaber's hedge fund Argonaut Capital who thinks that deflation is the greater risk.

Brett Barakett's Tremblant Capital Bets Big On Research In Motion (RIMM): 13F Filing

(This post is part of our series on tracking hedge fund portfolios. If you're unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund 13F filings.)

Next up is Brett Barakett's hedge fund Tremblant Capital Group. Before founding his own firm, Brett previously was a portfolio manager for Louis Bacon's global macro hedge fund Moore Capital. Taken from their site, Tremblant Capital Group's objective is "to achieve superior risk adjust returns for our investors through our focused and disciplined investment process." The name Barakett might ring a bell because his brother Timothy used to run fellow hedge fund Atticus Capital (who previously announced they'd be shutting down). So while Timothy may have stepped away from the hedge fund game, Brett is still going at it. And, in his spare time he enjoys ice hockey.

The positions listed below were their long equity, note, and options holdings as of December 31st, 2009 as filed with the SEC. All holdings are common stock unless otherwise denoted.


Brand New Positions
Mastercard (MA) Calls
Macys (M) Calls
Chipotle Mexican Grill (CMG)
Macys (M)
Liberty Media Starz (LSTZA)
CVS Caremark (CVS)
Citigroup (C)
The rest of their new stakes were less than 0.5% of reported assets each: Apollo Group (APOL) Calls, Lowe Companies (LOW), AGA Medical (AGAM), DirecTV (DTV), Symmetry Medical (SMA), Union Pacific (UNP) Calls, Greatbatch (GB), Liberty Media (LINTA) Calls, America Movil (AMX), Apollo Group (APOL) Puts, Cypress Semiconductor (CY), Gannett (GCI) Calls, & Liz Claiborne (LIZ)


Increased Positions
Research in Motion (RIMM) Calls: Increased by 312%
Procter & Gamble (PG) Calls: Increased by 107%
Charles Schwab (SCHW): Increased by 37.9%
Hologic (HOLX): Increased by 20.5%
Green Mountain Coffee Roasters (GMCR): Increased by 13.6%
Integra Lifesciences (IART): Increased by 13%


Reduced Positions
Walmart (WMT): Reduced by 33%
Visa (V): Reduced by 32%
Apple (AAPL): Reduced by 26%
Mastercard (MA): Reduced by 25%
Procter & Gamble (PF): Reduced by 20%
Redhat (RHT): Reduced by 11.3%


Removed Positions (Sold out completely):
Qualcomm (QCOM) Calls
Chipotle (CMG-B)
DirecTV (DTV) Calls
Redhat (RHT) Calls
Liberty Media (LMDIA)
CBS (CBS) Puts
Viacom (VIA-B) Puts
Palm (PALM) Puts
The rest of their sold positions were less than 0.5% of assets reported on previous filings each: iShares HongKong (EWH) Puts, Intuitive Surgical (ISRG) Calls, iShares FTSE (FXI) Puts, Werner (WERN) Calls, Baidu (BIDU) Puts, Lamar Advertising (LAMR) Calls, Corporate Executive Board (EXBD) Calls, Burlington Northern (BNI), Peet Coffee (PEET), & China Biotics (CHBT)


Top 15 Holdings by percentage of assets reported on 13F filing

1. Research in Motion (RIMM) Calls: 28%
   
2. Procter & Gamble (PG) Calls: 8.37%
   
3. Procter & Gamble (PG): 3.34%
   
4. Visa (V): 2.15%
   
5. Mastercard (MA): 2.13%
   
6. Mastercard (MA) Puts: 2.09%
   
7. Research in Motion (RIMM): 1.98%
   
8. Mastercard (MA) Calls: 1.97%
   
9. Green Mountain Coffee Roasters (GMCR): 1.91%
   
10. Hologic (HOLX): 1.91%
    
11. Macys (M) Calls: 1.86%
    
12. Baidu (BIDU): 1.67%
    
13. Walmart (WMT): 1.65%
    
14. Apple (AAPL): 1.64%
    
15. Charles Schwab (SCHW): 1.63%
    

Tremblant Capital uses options to express a lot of their positions so keep in mind that this can get tricky when trying to assess their net exposure to a specific stock. For instance, they own Mastercard (MA) common stock, but also own both calls and puts on the name. Since we don't know the strike prices or expiration dates, it's nearly impossible for us to know what their overall bet is on the name. At the same time though, we know they are bullish on Research in Motion (RIMM) because they own both the common stock and and calls. Not to mention, they added massively to their call position over the past quarter.

In terms of other additions, they doubled their stake in Procter & Gamble (PG) calls and started new call positions in both Macys and Mastercard. Of the positions they completely sold out of, Qualcomm was notable because it had previously been a sizable stake for Barakett's hedge fund. Overall though, their portfolio looks pretty similar to last quarter and they've certainly retained (and even expanded) their large exposure to Research in Motion.

There are also a few transactions we need to clarify. In regards to their Chipotle positions, you'll notice they "sold out" of Chipotle's B shares and added a 'new' stake in Chipotle's A shares. In actuality, Chipotle converted into a single shareclass of common stock in the fourth quarter. As such, Tremblant owns the regular CMG shares. In addition, Barakett's hedge fund 'sold out' of LMDIA and started 'new' stakes in DTV and LSTZA. In reality, this was just a result of a merger transaction.

Assets reported on the 13F filing were $3.8 billion this quarter compared to $3.0 billion last quarter, an increase of 28% in exposure to equities and options. Remember that these filings are not representative of the hedge fund's entire base of AUM.

We'll be tracking 40+ prominent funds in our fourth quarter 2009 hedge fund portfolio tracking series. We've already covered Seth Klarman's Baupost Group, Mohnish Pabrai's Investment Fund, Carl Icahn's hedge fund Icahn Partners, David Einhorn's Greenlight Capital, Stephen Mandel's Lone Pine Capital, John Griffin's Blue Ridge Capital, David Tepper's Appaloosa Management, Warren Buffett's portfolio, John Paulson's hedge fund Paulson & Co, Lee Ainslie's Maverick Capital, Dan Loeb's Third Point, Eddie Lampert's RBS Partners, David Ott's Viking Global, and Chris Shumway's hedge fund Shumway Capital Partners, Chase Coleman's Tiger Global, Philip Falcone's Harbinger Capital Partners, Roberto Mignone's Bridger Management, Thomas Steyer's Farallon Capital, and John Burbank's Passport Capital. Check back daily for our new updates.

Chase Coleman's Tiger Global Shows Large DirecTV & Apollo Group Stakes: 13F Filing

(This post is part of our series on tracking hedge fund portfolios. If you're unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund 13F filings.)

Next up is Chase Coleman's hedge fund Tiger Global. Chase Coleman is a 'Tiger Cub' because he previously plied his trade under mentor Julian Robertson at Tiger Management. Coleman is also considered a 'Tiger Seed' because he is one of the few managers that Robertson actually seeded himself in an effort to recognize talented up and coming managers. Coleman is one of the many managers selected to be in the Tiger Cub Portfolio created with Alphaclone where you can piggyback the investment portfolios of some of the top investors out there.

The positions listed below were Tiger Global's long equity, note, and options holdings as of December 31st, 2009 as filed with the SEC. All holdings are common stock unless otherwise denoted.


Brand New Positions
DirecTV (DTV)
Apollo Group (APOL) ~ this position was disclosed back in January
Lockheed Martin (LMT)
Liberty Global (LBTYA)
Harbin Electric (HRBN)
Ebix (EBIX)
Hewlett Packard (HPQ)


Increased Positions
IAC Interactive (IACI): Increased by 212%
McDonald's (MCD): Increased by 100%
Qualcomm (QCOM): Increased by 63.5%
Monsanto (MON): Increased by 62%
E*Trade Financial (ETFC): Increased by 52%
Pepsico (PEP): Increased by 43.5%
Apple (AAPL): Increased by 36%
Western Union (WU): Increased by 32%
Yahoo (YHOO): Increased by 15%


Reduced Positions
Teradata (TDC): Reduced by 66.3%
Discovery Communications (DISCA): Reduced by 49%
Gushan Environmental (GU): Reduced by 42.7%
Google (GOOG): Reduced by 39.5%
Priceline.com (PCLN): Reduced by 35%
Lorillard (LO): Reduced by 33.5%
IMS Health (RX): Reduced by 32.8%
Visa (V): Reduced by 27.7%
Longtop Financial (LFT): Reduced by 21.5%
Cablevision (CVC): Reduced by 19.6%
Mastercard (MA): Reduced by 17%


Removed Positions (Sold out completely):
American Tower (AMT)
Electronic Arts (ERTS)
Advisory Board (ABCO)
Airvana (AIRV)


Top 15 Holdings by percentage of assets reported on 13F filing

1. DirecTV (DTV): 11.14%
   
2. Apollo Group (APOL): 9.28%
   
3. Mastercard (MA): 7.63%
   
4. Pepsico (PEP): 7.19%
   
5. Monsanto (MON): 6.16%
   
6. Google (GOOG): 5.33%
   
7. Mercadolibre (MELI): 5.16%
   
8. Transdigm Group (TDG): 4.43%
   
9. Lorillard (LO): 4.07%
   
10. Qualcomm (QCOM): 3.87%
    
11. Visa (V): 3.81%
    
12. IAC Interactive (IACI): 3.58%
    
13. Priceline.com (PCLN): 3.28%
    
14. Lockheed Martin (LMT): 3.23%
    
15. Yahoo (YHOO): 3.09%
    

Keep in mind many of these portfolio moves we had covered in our previous Tiger portfolio update. Their brand new position in Apollo Group is notable as fellow hedgie Stephen Mandel's Lone Pine Capital is also bullish on education plays. They also started a huge new stake in DirecTV (DTV). Tiger apparently believes that DTV will increase leverage to buyback shares and then their cashflow will cover current debt.

They completely sold out of American Tower which diverges from what we've seen from hedgies as of late. The vast majority of hedge funds we track have been bullish on tower stocks. Tiger Global also sold off some Google shares and this falls directly in line with previous research that showed many hedge funds slowly turning sour on GOOG. Lastly, we saw Tiger dump shares of Electronic Arts and this also fits the meme of hedgies shorting video game makers that are losing out to online games. Tiger also sold shares of Priceline.com, something we saw fellow hedgie Stephen Mandel do when his Lone Pine Capital dumped PCLN as well.

Data used for this article comes from Alphaclone, our source for backtesting strategies and sorting through all the hedge fund portfolio maneuvers with just a few clicks. Assets reported on the 13F filing were $3.3 billion this quarter compared to $2.3 billion last quarter, a 40% increase. Remember that these filings are not representative of the hedge fund's entire base of AUM.

We'll be tracking 40+ prominent funds in our fourth quarter 2009 hedge fund portfolio tracking series. We've already covered Seth Klarman's Baupost Group, Mohnish Pabrai's Investment Fund, Carl Icahn's hedge fund Icahn Partners, David Einhorn's Greenlight Capital, Stephen Mandel's Lone Pine Capital, John Griffin's Blue Ridge Capital, David Tepper's Appaloosa Management, Warren Buffett's portfolio, John Paulson's hedge fund Paulson & Co, Lee Ainslie's Maverick Capital, Dan Loeb's Third Point, Eddie Lampert's RBS Partners, David Ott's Viking Global, and Chris Shumway's hedge fund Shumway Capital Partners. Check back daily for our new updates.

David Ott's Viking Global: Long Visa, Invesco, Mastercard & Express Scripts: 13F Filing

(This post is part of our series on tracking hedge fund portfolios. If you're unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund 13F filings.)

Next up is hedge fund Viking Global Investors. Previously, we've only referenced Andreas Halvorsen with the fund, but that's not been fair since it was co-founded by Brian Olson and David Ott (pictured left) in 1999. All three had considered starting their own hedge funds when Halvorsen suggested they try a team approach. However, Olson left in 2005 while Ott and Halvorsen still remain.

Prior to Viking, Ott was a Managing Director at Tiger Management where he was focused on consumer companies. Ott received his MBA from Harvard Business School (a Baker Scholar) and previously graduated from the Wharton School at the University of Pennsylvania. Doesn't sound like a hedge fund guy at all, does he? Halvorsen attended Williams College and then received his MBA from Stanford.

Viking employs bottom-up fundamental stockpicking, like most all other 'Tiger Cub' hedge funds. They can analyze businesses with the best of them and that's why we track them. In Alpha's 2008 hedge fund rankings, Viking was ranked #70 in the world. We haven't seen many of their letters as of late, but when we did, we learned in Viking's commentary that they (like many other hedge funds) had trouble on the short side of the portfolio in 2009. Viking is part of the Tiger Cub Portfolio created with Alphaclone where you can replicate the portfolios of some of the top hedge funds around.

The positions listed below were Viking Global's long equity, note, and options holdings as of December 31st, 2009 as filed with the SEC. All holdings are common stock unless otherwise denoted.


Brand New Positions
Wellpoint (WLP)
Danaher (DHR)
Capital One (COF)
Aetna (AET)
News Corp (NWSA)
Oracle (ORCL)
Hess (HES)
CME Group (CME)
Lincare (LNCR)
Wells Fargo (WFC)
Manulife (MFC)
Rockwell Collins (COL)
Devon Energy (DVN)
Dollar General (DG)
Host Hotels (HST)
Banco Santander (BSBR)
Health Management (HMA)
Biovail (BVF)
The rest of their brand new stakes were all less than 0.5% of the portfolio each: Pall (PLL), Illumina (ILMN), Brocade (BRCD), Qwest Communications (Q), Pfizer (PFE), Manitowoc (MTW), Metlife (MET), & Pharmaceutical Prod (PPDI)


Increased Positions
Universal Health (UHS): Increased by 227%
Autodesk (ADSK): Increased by 183.3%
Hewlett Packard (HPQ): Increased by 153%
Atlas Energy (ATLS): Increased by 99.5%
Tyco (TYC): Increased by 59%
CVS Caremark (CVS): Increased by 55.9%
Qualcomm (QCOM): Increased by 53.4%
Mastercard (MA): Increased by 50.2%
Beckman Coulter (BEC): Increased by 48%
Halliburton (HAL): Increased by 47.8%
Ace (ACE): Increased by 26.6%
Citigroup (C): Increased by 20.8%
Flowserve (FLS): Increased by 17%


Reduced Positions
Apollo Group (APOL): Reduced by 84%
Franklin Resources (BEN): Reduced by 77.5%
Owens Illinois (OI): Reduced by 74%
DirecTV (DTV): Reduced by 51.6%
Google (GOOG): Reduced by 48.7%
Allegheny Energy (AYE): Reduced by 40.5%
Davita (DVA): Reduced by 37%
Visa (V): Reduced by 36.6%
Virgin Media (VMED): Reduced by 36.3%
Ingersoll Rand (IR): Reduced by 35.8%
JPMorgan Chase (JPM): Reduced by 21.9%


Removed Positions (Sold out completely):
Bank of America (BAC)
Goldman Sachs (GS)
Marsh & Mclennan (MMC)
AmerisourceBergen (ABC)
XTO Energy (XTO)
Pepsico (PEP)
Owens & Minor (OMI)
Priceline (PCLN)
RenaissanceRe (RNR)
Medco Health (MHS)
Rovi (ROVI)
Ralcorp (RAH)
CBS (CBS)
Terex (TEX)
Lender Processing (LPS)
St Jude Medical (STJ)
Hospitality Properties (HPT)
Thoratec (THOR)


Top 15 Holdings by percentage of assets reported on 13F filing

1. Visa (V): 8.3%
2. Invesco (IVZ): 7.6%
3. Mastercard (MA): 6.3%
4. Express Scripts (ESRX): 4.2%
5. JPMorgan Chase (JPM): 4.0%
6. CSX (CSX): 3.9%
7. Goodrich (GR): 3.3%
8. Wellpoint (WLP): 3.3%
9. Beckman Coulter (BEC): 2.7%
10. Hewlett Packard (HPQ): 2.7%
11. Autodesk (ADSK): 2.7%
12. Danaher (DHR): 2.6%
13. Cigna (CI): 2.6%
14. Capital One (COF): 2.4%
15. CVS Caremark (CVS): 2.4%
    

Of their top holdings, three of them were brand new stakes in Wellpoint, Danaher, and Capital One. Viking Global also added significantly to their pre-existing stakes in Autodesk and Hewlett Packard. Visa, JPMorgan Chase, Invesco, CSX and Express Scripts have been towards the top of their portfolio for a few quarters now. They ramped up their Mastercard stake to bring it to the top tier of holdings and Viking owns sizable chunks of both payment processors now (MA & Visa). These are by far some of the most widely held stocks amongst hedge funds.

Their JPMorgan position sticks with the long 'too big to fail' banks and short regional banks meme that we've seen so many hedgies employ. Their CSX stake is intriguing because as you know, Warren Buffett's Berkshire Hathaway acquired rail competitor Burlington Northern. CSX had previously been owned by tons of hedge funds, but not as many as of late. We'll have to see if other hedge funds start to pile into other rail names now.

Probably one of the most notable portfolio changes was Viking's massive reduction in their Apollo Group (APOL) stake. This had previously been a very large position for the hedge fund and it seems that they agree with Conatus Capital, who also sold out of education plays. More hedge funds seem to be concerned about regulatory risk, etc. In the quarter prior, Franklin Resources was Viking's fourth largest US equity long, and this time around they sold off a ton of shares. It was also interesting to see Ott's hedge fund sell completely out of financial stakes in Bank of America and Goldman Sachs. Additionally, they dumped high-flyer Priceline.com (PCLN), a company we've seen many Tiger Cub hedge funds own previously.

All data used for this article comes from Alphaclone. We use it for backtesting strategies and sorting through hedge fund portfolio maneuvers. Assets reported on the 13F filing were $8.7 billion this quarter compared to $7.6 billion last quarter, so $1 billion added in long US equity exposure. Remember that these filings are not representative of the hedge fund's entire base of AUM.

We'll be tracking 40+ prominent funds in our fourth quarter 2009 hedge fund portfolio tracking series. We've already covered Seth Klarman's Baupost Group, Mohnish Pabrai's Investment Fund, Carl Icahn's hedge fund Icahn Partners, David Einhorn's Greenlight Capital, Stephen Mandel's Lone Pine Capital, John Griffin's Blue Ridge Capital, David Tepper's Appaloosa Management, Warren Buffett's portfolio, John Paulson's hedge fund Paulson & Co, Lee Ainslie's Maverick Capital, Dan Loeb's Third Point and Eddie Lampert's RBS Partners. Check back daily for our new updates.