Showing posts with label institutions. Show all posts
Showing posts with label institutions. Show all posts

Thursday, April 23, 2009

Sprott Asset Management (Eric Sprott) Older Special Report

Great commentary and special report from Eric Sprott's Sprott Asset Management that is older yet very relevant: Move over Adam Smith: The Visible Hand of Uncle Sam. Many readers have requested that we start covering them, and we are gladly obliging, as you will see information on them from here on out. Since they are Canadian based and we are American based (and hence focus mainly on American funds), we would gladly welcome any information or updates our Canadian readers receive on Sprott. So, feel free to share with us. We've been assembling a good amount of information and content, but we surely have missed a few things. Without further ado, courtesy of Zero Hedge. (RSS & Email readers may need to come to the blog to read it).


Posted by market folly at 7:50 AM View Comments
Labels: , , , ,

Wednesday, April 22, 2009

Daniel Loeb's Hedge Fund Third Point LLC: 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, we have Daniel Loeb's Third Point LLC. Third Point is a $2 billion activist and value based hedge fund. Specifically, they deem themselves to be "event driven, value oriented investors." Loeb founded the firm back in 1995 with $3.3 million in seed capital and is still running the show these days. While Third Point is technically an activist fund, Loeb often has numerous passive investments as well. Loeb himself is quite well known for his searing and critical letters to management of various companies. Third Point has seen annual returns averaging over 15% since inception (including the crazy year that was 2008), a Sharpe Ratio of 0.9, and a correlation to the S&P500 of 0.4. In terms of recent portfolio performance, Third Point was -3% for March, and -1.44% year to date as of then, according to our list of March hedge fund numbers. As per their recent April investor update, we saw that they were net long healthcare and utilities, while being heavily net short consumer.

If you want a more historical perspective on Third Point's portfolio, you can check out their holdings from Q3 2008, the quarter prior to the positions detailed below. We track these funds on a quarter by quarter basis to establish their longer-term moves. Slight disclaimer: Third Point has been pretty active with 13D & 13G filings in the time period that has elapsed from this filing to the present. As such, certain positions in their portfolio have been updated and we will be covering all of those more recent moves in another post tomorrow, to distinguish the moves from the list of their entire portfolio below.

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):
Gold (GLD)
Wachovia (WB)
Liberty Acquisition (LIA)
Potash (POT)
Trian Acquisition (TUX)
Triplecrown (TCW)
Sapphire Industrials (FYR)
Global Brands (GQN)
Guaranty Financial (GFG)
Global Consumer (GHC)
Hicks Acquisition (TOH)
LifeTime Fitness (LTM)


Some Increased Positions (A few positions they already owned but added shares to)
PHH (PHH): Increased by 160%
UST (UST)): Increased by 60%


Some Reduced Positions (Some positions they sold some shares of - note not all sales listed)
Vanguard Natural Resources (VNR): Reduced by 65%
Rohm & Haas (ROH): Reduced by 64%
CoreMark Holding (CORE): Reduced by 37%
Telephone & Data (TDS): Reduced by 32%
Energy XXI (EXXI): Reduced by 32%
Teradata (TDC): Reduced by 30%
Txco Resources (TXCO): Reduced by 27%
Victory Acquisitions (VRY-WS): Reduced by 24%
Maguire Properties (MPG): Reduced by 23%
Phoenix Companies (PNX): Reduced by 22%
Dineequity (DIN): Reduced by 20%
Epicor Software (EPIC): Reduced by 18%


Removed Positions (Positions they sold out of completely)
Dr Pepper Snapple (DPS)
Plains Exploration (PXP)
Lorillard (LO)
Leap Wireless (LEAP)
Time Warner (TWX)
Tibco (TIBX)
Anheuser Busch (BUD)
American Eagle Outfitters (AEO)
Liberty Acquisition (LIA-U)
Thompson Creek (TC)
Orient Express Hotels (OEH)
Meadwestvaco (MWV)
CVS Caremark (CVS)
Hewlett Packard (HPQ)
Covidien (COV)
Target (TGT)
Flow (FLOW)
Enpro (NPO)
Verigy (VRGY)
GLG Partners (GLG)
Global brands (GQN-U)
Global Consumer (GHC-U)
Trian Acquisition (TUX-U)
Augusta (AZC)
Vantage Energy (VTG)
Heckmann (HEK-WS)
OSI Systems (OSIS)
Heckmann (HEK)
Emcore (EMKR)


Top 15 Holdings (by % of portfolio)

  1. SPDR Gold Trust (GLD): 9.73% of portfolio
  2. Wachovia (WB): 8.66% of portfolio
  3. PHH Corp (PHH): 8.29% of portfolio
  4. Exco Resources (XCO): 8.15% of portfolio
  5. Liberty Acquisition Holdings (LIA): 7.2% of portfolio
  6. Potash (POT): 5.5% of portfolio
  7. Teradata (TDC): 5.2% of portfolio
  8. SPDR S&P 500 (SPY): 5.17% of portfolio
  9. Telephone & Data Systems (TDS): 3.8% of portfolio
  10. UST (UST): 3.5% of portfolio
  11. Victory Acquisition (VRY): 3.17% of portfolio
  12. Trian Acquisition (TUX): 3% of portfolio
  13. Nabi Biopharma (NABI): 2.9% of portfolio
  14. Phoenix Companies (PNX): 2.9% of portfolio
  15. Triplecrown (RCW): 2.7% of portfolio


Like so many other hedge funds, Third Point's top holding is Gold (via GLD), and they brought it on as a new holding last quarter. As you can tell, Third Point's portfolio is slightly more concentrated than many other hedge funds, with a large percentage of their portfolio in their top 6 or 7 holdings. Some of their notable sales include Dr Pepper, Plains Exporation, and Lorillard, all which were at one point greater than a 4.5% position for Third Point; they no longer own those names. We would like to make special note of the current list of Third Point's holdings seen above. Since filing this 13F, they have been busy filing various 13D's and 13G's with the SEC, detailing changes to some of their positions. As such, we will cover these more recent moves in a separate post to which we can compare the holdings. Assets from the collective long US equity, options, and note holdings were $1.7 billion last quarter and were $799 million this quarter. 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:


We cover a new hedge fund each day and you can see the complete list of hedge fund portfolios here.


Posted by market folly at 7:57 AM View Comments
Labels: , , , ,

Hedge Funds: March Redemptions & Mid-April Performance Numbers

We wanted to touch on two quick data points really quickly. Firstly, HedgeFund.net is out saying that Hedge Fund assets only fell by 1% in March 2009. This is a mix of net redemptions of around 3% and a performance of 2% for the same month. As we've pointed out before, this is still a pretty significant number, but overall, the redemption wave is decelerating a little bit, rather than accelerating. We have postulated numerous times that October and November was the major splash in the pool and that various ripples will be felt for the next year or two until the industry stabilizes.

Secondly, Here's a quick look at how some major hedge funds are performing midway through April 2009, courtesy of our friends over at Zero Hedge.




(click to enlarge)

Keep in mind that we've covered the portfolios of numerous hedge funds listed above. So, if you're curious as to what many of those funds are holding, check out our cumulative list of hedge fund portfolio coverage.

And then we also wanted to toss in a few other interesting pieces. As of 4/17/09, here is the Hedge Fund Performance Review (in downloadable .pdf format) courtesy of Dealbreaker. Lastly, we covered the March 2009 performance figures in a previous post as well if you've missed that. Hedge Fund land marches on.


Posted by market folly at 7:50 AM View Comments
Labels: , , , ,

Tuesday, April 21, 2009

Hedge Fund D.E. Shaw & Co: 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 D.E. Shaw & Co. D.E. was founded in 1988 by David E. Shaw and manages around $33 billion as of December 1st 2008. They focus on intertwining technology and finance and are a hedge fund, private equity firm, and technology development shop all in one. They employ mainly quantitative strategies and do a lot of statistical arbitrage. Shaw oversees strategic maneuvers at the firm, but no longer is active in the day to day operations. He received his Ph.D. from Stanford University. Shaw also was recently seen on Forbes' billionaire list, as well as the list for Top 25 highest paid hedge fund managers for 2008. Some notable former employees include Jeff Bezos (before founding Amazon.com) and Lawrence Summers, who left the firm to serve on President Elect Obama’s economic team. Shaw has had a decent year thus far, seeing their Composite fund +0.8% for March and sitting at +5.59% year to date (through 3/31/09) as detailed in our March hedge fund performance numbers update. In terms of somewhat recent activity, we had noted their activity in Orient- Express Hotels (OEH) back in January, in an ongoing saga.

In Alpha's hedge fund rankings, D.E. Shaw is ranked 6th in the world. Taken from their website, they invest “in a wide range of companies and financial instruments within both the major industrialized nations and a number of emerging markets. Its activities range from the deployment of investment strategies based on either mathematical models or human expertise to the acquisition of existing companies and the financing or development of new ones.” Lastly, for those of you potentially interested in working at such an outfit, check out some of their past interview questions.

Disclaimer: Do note that tracking DE Shaw through 13F filings is not beneficial due to the quant nature of their firm. We are tracking them because they are a popular, prominent fund with solid returns and many readers continually request it. While the majority of funds we cover are appropriate for tracking given their strategy and research methods, there is no way for us to know the exact rhyme or reason behind DE's positions. So, we are simply posting this up for fun. Use this information for entertainment purposes only.

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):
Ventas (VTR), Apogent Tech (inactive), Essex Property Trust (ESS), US Bancorp (USB) Bond, Encana (ECA), Wendys/Arbys (WEN), Sybase (SY) Bond, Gilead (GILD) Bond, PSS World Medical (PSSI) Bond, Burlington Northern (BNI) Puts, Danaher (DHR), Medco Health (MHS), Best Buy (BBY) Bond, Occidental Petroleum (OXY) Puts, Dicks Sporting Goods (DKS) Bond, Kohls (KSS), Cliffs Natural Resources (CLF), Highwoods (HIW), Symantec (SYMN) Bond, Jones Lang Lasalle (JLL), Royal Dutch Shell (RDS-A), Senior Housing Properties (SNH), OReilly Automotive (ORLY), World Fuel Services (INT), L3 Communications (LLL), Ebay (EBAY) Puts, Dupont (DD) Puts, Kilroy Realty (KRC), NV Energy (NVE), & Hewitt Associates (HEW)


Some Increased Positions (A few positions they already owned but added shares to)
Abbott Laboratories (ABT): Increased by 467%
Bank of America (BAC) Calls: Increased by 110%
Apple (AAPL) Puts: Increased by 102%
Qualcomm (QCOM): Increased by 45%
Walmart (WMT): Increased by 28%
Laboratory Corp (LH) Bond: Increased by 20%
Abraxis Bioscience (ABII): Increased by 13%
Warner Chilcott (WCRX): Increased by 11%


Some Reduced Positions (Some positions they sold some shares of - note not all sales listed)
Exxon Mobil (XOM): Reduced by 65%
Equity Residential (EQR): Reduced by 60%
Burlington Northern (BNI): Reduced by 45%
Union Pacific (UNP): Reduced by 44%
Pfizer (PFE): Reduced by 33%
News Corp (NWS-A): Reduced by 31%
Cephalon (CEPH): Reduced by 26%
Coca Cola (KO): Reduced by 20%
Mastercard (MA): Reduced by 19%
Anadarko Petroleum (APC): Reduced by 14%


Removed Positions (Positions they sold out of completely)
Anheuser Busch (BUD), Merill Lynch (MER) Calls & Puts, Symantec (SYMC), Procter & Gamble (PG) Puts, CA (CA), DRS Tech (inactive), Imclone (IMCL), Prudential (PRU) Bond, Allied Waste (AW), SLM (SLM), Lehman Brothers (LEHPQ) 7.25% Preferred, Nabors (NBR) Note, Autozone (AZO), Invitrogen (IVGN), Mylan (MYL-PA), Anheuser Busch (BUD) Calls, Everest RE group (RE), Wrigley (inactive), Nationwide Health (NHP-PB), Barr Pharma (BRL), Coca Cola (KO) Puts, Hutchinson Tech (HTCH) Note, Best Buy (BBY), Brookfield Asset Management (BAM), Developers Diversified (DDR), Kimco (KIM), Grey Wolf (GW), & Sierra Pacific (SRP)


Top 15 Holdings (by % of portfolio)

  1. Endo Pharma (ENDP): 1.25% of portfolio
  2. Vertex Pharma (VRTX): 1.23% of portfolio
  3. Warner Chilcott (WCRX): 1.19% of portfolio
  4. Pfizer (PFE): 0.97% of portfolio
  5. Goldman Sachs (GS) Calls: 0.9% of portfolio
  6. Google (GOOG) Calls: 0.87% of portfolio
  7. Mylan (MYL): 0.87% of portfolio
  8. Owens Corning (OC): 0.83% of portfolio
  9. Qualcomm (QCOM): 0.8% of portfolio
  10. Walmart (WMT): 0.78% of portfolio
  11. Mastercard (MA) Calls: 0.72% of portfolio
  12. Anadarko Petroleum (APC): 0.67% of portfolio
  13. AvalonBay Communities (AVB): 0.64% of portfolio
  14. Davita (DVA): 0.6% of portfolio
  15. Coca Cola (KO) Calls: 0.6% of portfolio


Again, please keep in mind that since Shaw is quant in nature, we aren't going to attempt to explain the rationale behind their holdings. Also note that they literally hold a ton of positions. After all, their top holding makes up ony 1.25% of their entire portfolio. They have numerous positions that only comprise of < href="http://www.marketfolly.com/2009/02/hedge-fund-portfolio-tracking-q4-2008.html">portfolio tracking series in which we're tracking 35+ prominent funds. We've already covered:


We cover a new hedge fund each day and you can see the complete list of hedge fund portfolios here.


Posted by market folly at 7:57 AM View Comments
Labels: , , , ,

Peter Thiel's Clarium Capital: Investor Letter (Market Commentary)

Just wanted to share this great read from Peter Thiel's global macro hedge fund Clarium Capital. Their latest investor letter is entitled 'The Wonderful Wizard of Oz' where they lay out some interesting market commentary. If you've missed it in the past, we've covered Clarium's equity portfolio as well as their detailed performance breakdown from February 2009. Enjoy:

(Email & RSS readers may need to come to the blog to view the slidedeck)


Posted by market folly at 7:55 AM View Comments
Labels: , , , ,

Monday, April 20, 2009

Raj Rajaratnam's Hedge Fund Galleon Group: 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 Galleon Group. Galleon was founded by Raj Rajaratnam in 1997 and currently manages in excess of $7 billion. Raj previously worked for Needham & Company, and when he left was responsible for a compounded rate of return of 37% over 4 years while overseeing $250 million. Raj received a Bsc in Engineering and then an MBA in Finance from the University of Pennsylvania. And, in 2009 we saw that Raj's accomplishments have paid off as he is on Forbes' billionaire list. Galleon Group's Buccaneer fund was up 13.39% as of late February 2009. Additionally, their Diversified fund was up 9.87% through the same time period, as noted in our January & February hedge fund performances (March '09 numbers here).

Taken from their website, the Galleon Group “manages a series of funds that specialize in the technology and healthcare industries. Currently The Galleon Group manages five different long/short equity funds: Technology, Healthcare, New Media (Internet), Communications and Life Sciences. Galleon’s philosophy and approach differs from that of other hedge funds in the fundamental belief that it is possible to deliver superior returns to our investors without employing leverage. Combine strong fundamental investment analysis with superior trading capability Galleon places a strong emphasis on both fundamental investment analysis and trading. This enables us to identify companies with superior long-term growth prospects while maintaining the flexibility to profit from short-term market fluctuations.”

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):
S&P500 (SPY) Calls, SAP AG (SAP) Puts, Intel (INTC) Puts, Bank of America (BAC) Calls, PNC Financial (PNC), Wyeth (WYE), Atmel (ATML), QQQ (QQQQ), Semi Conductor ETF (SMH) Calls, Genentech (DNA), American Eagle Outfitters (AEO), Yahoo (YHOO), Starbucks (SBUX), FTI Consulting (FCN), AK Steel (AKS), Steel Dynamics (STLD), Schering Plough (SGP), America Movil (AMX), CIT Group (CIT), Amphenol (APH), Maxim (MXIM), Fedex (FDX), NRG Energy (NRG), AT&T (T), Lam Research (LRCX), Kellogg (K), Compuware (CPWR), Shaw Group (SGR), Linear Technology (LLTC), & Ascent Media (ASCMA)


Some Increased Positions (A few positions they already owned but added shares to)
United States Oil Fund (USO): Increased by 14,217%
Yingli Green Energy (YGE): Increased by 755%
Ultrashort Real Estate (SRS): Increased by 537%
Sandisk (SNDK): Increased by 400%
Corning (GLW): Increased by 313%
Seagate (STX): Increased by 120%
Semiconductor HOLDRS (SMH): Increased by 95%
Advanced Micro Devices (AMD) Bond: Increased by 68%
Ishares China (FXI): Increased by 58%
Western Digital (WDC): Increased by 44%


Some Reduced Positions (Some positions they sold some shares of - note not all sales listed)
Nokia (NOK): Reduced by 85%
Apple (AAPL): Reduced by 78%
Synaptics (SYNA): Reduced by 77%
Netapp (NTAP): Reduced by 76%
Qualcomm (QCOM): Reduced by 75%
Applied Materials (AMAT): Reduced by 72%
SPDR S&P500 ETF (SPY): Reduced by 52%
Amag Pharma (AMAG): Reduced by 45%
Microsoft (MSFT): Reduced by 43%
Electronic Arts (ERTS): Reduced by 43%
Marathon Oil (MRO): Reduced by 41%
First Solar (FSLR): Reduced by 40%
Mylan (MYL): Reduced by 40%


Removed Positions (Positions they sold out of completely)
Humana (HUM), Xilinx (XLNX), Qualcomm (QCOM) Calls, Oil Services (OIH) Puts, F5 Networks (FFIV), Cigna (CI) Puts, Shire (SHPGY), Walmart (WMT), Citigroup (C) Puts, Halliburton (HAL) Puts, Apple (AAPL) Calls, Marvell (MRVL), Eli Lilly (LLY) Calls, Advanced Micro Devices (AMD) Calls, Cisco Systems (CSCO) Puts, Transocean (RIG), SPDR Gold Trust (GLD), Intel (INTC), Eli Lilly (LLY), Analog Devices (ADI), Baidu (BIDU), People Support (inactive), Mastercard (MA), Select Sector Financials ETF (XLF), & Advanced Micro Devices (AMD)


Top 15 Holdings (by % of portfolio)

  1. SPDR S&P500 ETF (SPY): 20.4% of portfolio
  2. S&P500 (SPY) Calls: 7.6% of portfolio
  3. SAP AG (SAP) Puts: 3.96% of portfolio
  4. Intel (INTC) Puts: 3% of portfolio
  5. Bank of America (BAC) Calls: 2.1% of portfolio
  6. Advanced Micro Devices (AMD): 2.1% of portfolio
  7. United States Oil Fund (USO): 2.1% of portfolio
  8. Microsoft (MSFT): 1.97% of portfolio
  9. PNC Financial (PNC): 1.8% of portfolio
  10. Wyeth (WYE): 1.7% of portfolio
  11. Apple (AAPL): 1.66% of portfolio
  12. Atmel (ATML): 1.66% of portfolio
  13. QQQ (QQQQ): 1.6% of portfolio
  14. Semiconductor HOLDRS (SMH): 1.48% of portfolio
  15. Semi Conductor (SMH) Calls: 1.48% of portfolio


While they hold various puts and calls on numerous securities throughout their portfolio, their large position in SPY has to have paid Galleon off, assumming they held through the recent equity rally. At 20% of the portfolio, it is/was a serious position for them and Galleon's performance numbers so far this year have been quite solid. It will be very interesting to see what they've done with such a large position come the next batch of 13F filings. Like almost all of the other hedge funds we've covered from Q4 '08, we see that Galleon group was decreasing equity exposure as well. Their assets from the collective long US equity, options, and note holdings were $3.7 billion last quarter and were $1.1 billion this quarter, which is quite a significant drop off. It will be interesting to see if they have re-entered the equity markets in size over the 1st quarter of '09 considering the rally we've seen thus far in the markets. While they do have a large percentage of their portfolio in SPY, they had a relatively low portion of their assets under management exposed to equity markets as of this filing. As always, this will all be revealed in the next round of 13F filings coming due soon. 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:


We cover a new hedge fund each day and you can see the complete list of hedge fund portfolios here.


Posted by market folly at 12:29 PM View Comments
Labels: , , , ,

Thursday, April 16, 2009

Timothy Barakett's Atticus Capital Files Form 4 on Legend International (LGDI)

Hedge fund Atticus Capital ran by Timothy Barakett has filed a Form 4 with the SEC and has disclosed some small sales in their Legend International Holdings (LGDI) position. Our apologies for not posting this sooner, as the filing was made on March 31st, 2009 due to sales made by Atticus on March 27th. They sold 50,000 shares at $0.6105 and another 65,700 shares at $0.6069. After the sales, their holding in LGDI sits at 30,654,300 shares remaining.

Atticus Capital, the hedge fund ran by Timothy Barakett saw their combined funds up 45% in 2005. In 2006, they gained over 30%. Yet, in a complete reversal of fortunes, Atticus survived a nightmarish year last year, having been down more than 30% at one point. With a fresh year in tow, they were eager to set out on the right foot for 2009. However, their pain somewhat continued. Their European fund was -0.8% for February and sits -10% for 2009 as of that time, as noted in our series of January & February hedge fund performance numbers (March numbers here). Barakett founded the firm at age 29 in 1995 and focuses on taking large, concentrated positions in companies. One of Atticus' most famous investments was Phelps Dodge, a miner which was bought out by Freeport McMoran (FCX). At one point, Atticus owned more than 9% of Phelps. Barakett received both his BA in Economics and his MBA from Harvard. Its very evident that Barakett employs macro based investment theses. Once he has decided on what the trend is, he will find the best company within that trend and he will place a big bet. And, when needed, he will step in and take an activist role, ensuring the company is performing to his liking. A fun fact about Barakett is that he was a Harvard hockey teammates with Philip Falcone of Harbinger Capital Partners, whom we also cover.


Taken from Google Finance,

Legend International Holdings Inc is an "exploration stage company. The Company is engaged in mineral exploration and development activities. Legend primarily focuses in the development of its phosphate interests in the Georgina Basin in Queensland. The Legend landholdings, prospective for phosphate, diamonds and base metals, cover 40,525 acres in Queensland, Australia, and 4.7 million acres in the Northern Territory, Australia."


Posted by market folly at 7:58 AM View Comments
Labels: , , , ,

Wednesday, April 15, 2009

Philip Falcone's Harbinger Capital Partners Sells More Cliffs Natural Resources (CLF) - Amended 13D Filing

Harbinger Capital Partners has filed numerous amended 13D's on Cliffs Natural Resources (CLF) over the past few months, as we've noted they are selling down some of their position to bring the percentage allocation in line with their portfolio's goals. We're here to update the most recent filing which details activity on April 9th, 2009. The hedge fund ran by Philip Falcone has now disclosed a 7.29% ownership stake in CLF with 8,273,276 shares owned on aggregate by all their reporting parties. So, they have been selling some more shares, as they had previously disclosed owning 9,163,764 shares in their 13F filing. Again, make note that Harbinger themselves have come out and said they are selling due to portfolio metrics they need to bring back in line (percentage weightings) and continue to pursue CLF as an investment.

So, we'll monitor these amended filings and keep everyone up to date on the latest developments. You can also view the rest of Harbinger's portfolio holdings. Harbinger's activist stake in CLF has been an up and down soap opera, to say the least. Originally, Cliffs was to buy/merge with Alpha Natural Resources (ANR) and Harbinger tried to oppose this move, as they had other plans for Cliffs. At one point, Harbinger owned nearly 15% of CLF.

Harbinger Capital Partners is a $13 Billion firm ran by Philip Falcone. Harbinger was started in 2000 with seed capital from Harbert Management ($25 million). And, just recently, we've learned that Falcone is buying out Harbert to be the owner of the firm. Falcone made a name for himself in 2007 when he started shorting subprime mortgages and returned 117%. He focuses on intensive credit research, on bankruptcies and proxy fights, and was previously involved with high yield debt trading. Lately, he's been focused on equities it seems, but Harbinger's new fund will redirect his focus back to his roots.

At one point during 2008, they were up as much as 42%. But, their fortunes turned as their Offshore fund finished -22.7% for the year as noted in our 2008 hedge fund performances list. One position that treated them nicely was their short of Wachovia (WB), which we detailed here. Back in September, in a letter to investors, Falcone had assured investors that Harbinger was adequately positioned to stave off any further volatility the markets may bring their way, noting that the firm had reduced exposure to some of their higher volatility holdings (both on the long and short side).

In Harbinger's latest letter to investors, they noted that they had covered their shorts on metal producers and financials and also got out of some credit default swaps. While they have been winding down equity positions, they are sticking with their major stakes in Calpine (CPN) and the New York Times (NYT). Falcone also mentioned that they had added trade claims on an energy company and credit default swaps on various consumer plays (retailers, products, & services). Harbinger was +0.74% for March and sits at +4.06% year to date for 2009, as noted in our hedge fund March performance post. Lastly, Philip Falcone was recently unveiled as a part of Forbes' billionaire list.

Taken from Google Finance,

Cliffs Natural Resources (formerly known as Cleveland Cliffs) is "an international mining and natural resources company. The Company is a producer of iron ore pellets in North America, a supplier of direct-shipping lump and fines iron ore out of Australia, and a producer of metallurgical coal. Cliffs is organized according to product category and geographic location: North American Iron Ore, North American Coal, Asia Pacific Iron Ore, Asia Pacific Coal and Latin American Iron Ore."


Posted by market folly at 7:58 AM View Comments
Labels: , , , ,

Friday, March 27, 2009

Follow the Leader Or Get Trampled: Herd Mentality in Stocks

Great chart illustrating how so much capital is controlled by so few. This is the herd mentality at its finest. If you aren't with the herd, you're most likely getting trampled by it. It does NOT pay to bet against the herd. And, this somewhat plays into the rationale behind why we started Market Folly in the first place: to track hedge funds. While using their portfolio for investment ideas has its pros and cons, it certainly pays to at the very least be aware of what the bigger money is doing. Because, after all, they control a lot of the capital these days. If you're a smaller fish, you've got to know where the bigger fish are so you don't get eaten alive. You don't have to mimic their every move, but you've got to at least know where they are and attempt to pinpoint where they are headed. Hat tip to Cliff Küle for flagging this, as he explains the chart:

"Marty Chenard of stocktiming.com provides a chart on institutional buying and selling...takes all the Institutional buying on a given day, and subtracts the Institutional selling to give the net difference which equals accumulation or distribution... if the green bars are above zero.. Institutions are accumulating..if the green bars are below zero..Institutional Investors are in Distribution."


(click to enlarge)



Posted by market folly at 7:55 AM View Comments
Labels: , ,

Subscribe to: Posts (Atom)