Hedge Fund Tracking: Paulson & Co (John Paulson) - 13F Filing 3rd Quarter 2008

This is the 3rd Quarter 2008 edition of our ongoing hedge fund tracking series. Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here. We're aiming to cover 35 or so prominent funds this time around and we'll be releasing the 13f analysis of each individual fund here in the coming weeks. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, Timothy Barakett's Atticus Capital, John Griffin's Blue Ridge Capital, and Bret Barakett's Tremblant Capital. Next up, we have John Paulson's Paulson & Co. Paulson & Co is famous for making a fortune by betting against sub-prime when this whole mess began to unfold. And, it appears as if Paulson is still up to his fortune-making ways. One of his funds has generated a 589% return, which could easily be up there amongst the largest returns by a single hedge fund in a year. Paulson's Advantage Plus fund has returned 19.44% year-to-date as of the end of August. This is the same fund that gained 158% the year prior and has grown to almost $9 billion.

Paulson's bet against sub-prime has paid off and he has recently reversed course on that bet and has started to buy the assets he was previously short. In addition to his dances in sub-prime, Paulson recently disclosed a 14.6% stake in Cheniere Energy (LNG). And, prior to that, it was revealed that he was short UK banks. As we noted in our October hedge fund performance update, Paulson & Co's advantage plus fund was up 29.4% at the end of October. And, a week ago, Paulson went before Congress to testify with regards to the hedge fund industry.

The following were Paulson's long equity and options holdings as of September 30th, 2008 as filed with the SEC.


New Positions (Brand new positions that they initiated in the last quarter):
Applied Biosystems (ABI)
Anheuser Busch (BUD)
Rohm & Haas (ROH)
Barr Pharma (BRL)
Genentech (DNA)
BCE inc (BCE)
Merrill Lynch (MER)
NRG Energy (NRG)
Brocade Comm (BRCD)
Time Warner Cable (TWC)
Hercules (HPC)


Added to (Positions they already held but added shares)
none


Reduced Positions (Positions they sold some shares of - note not all sales listed)
Mirant (MIR): Reduced position by 6%
Philip Morris Intl (PM): Reduced position by 14%
Macrovision Solutions (MVSN): Reduced position by 38%


Positions with no change
Boston Scientific (BSX)
Kinross Gold (KGC)
Wrigley
Dr. Pepper Snapple (DPS)
Affiliated Computer (ACS)
Cheniere Energy (LNG)
Equity Media Holdings (EMDA)
Tronox (TROXB)


Removed Positions (Positions they sold out of completely)
WH Energy Services (WHQA)
Hercules Offshore (HERO)
Navteq (NVT)
Choicepoint (CPS)
Applera
Nymex (NMX)
Bank of America (BAC)
EDS (EDS)
Yahoo (YHOO)
Clear Channel (CCU)


Top 20 Holdings (by % of portfolio)

1. Anheuser Busch (BUD): 25.8% of portfolio
2. Rohm & Haas (ROH): 14.8% of portfolio
3. Boston Scientific (BSX): 14.5% of portfolio
4. Barr Pharma (BRL): 9% of portfolio
5. Kinross Gold (KGC): 6.5% of portfolio
6. Applied Biosystems (ABI): 4.8% of portfolio
7. Mirant (MIR): 4.8% of portfolio
8. Genentech (DNA): 4.2% of portfolio
9. Philip Morris Intl (PM): 4% of portfolio
10. Wrigley: 3.9% of portfolio
11. BCE (BCE): 2.7% of portfolio
12. Merrill Lynch (MER): 1.3% of portfolio
13. NRG Energy (NRG): 0.7% of portfolio
14. Brocade Comm (BRCD): 0.6% of portfolio
15. Dr Pepper Snapple (DPS): 0.6% of portfolio
16. Time Warner Cable (TWC): 0.5% of portfolio
17. Macrovision Solutions (MVSN): 0.3% of portfolio
18. Hercules (HPC): 0.28% of portfolio
19. Affiliated Computer (ACS): 0.25% of portfolio
20. Cheniere Energy (LNG): 0.15% of portfolio

Assets listed in the long portfolio this quarter were a little over $7 billion when compared to last quarter's $5.7 billion or so. It definitely looks as if Paulson is trying to play it "safe" in the equity markets by betting on mergers he thinks will still get done despite the credit crisis. His large stakes in ROH and BUD clearly illustrate that. Please note that Paulson's holdings are not necessarily primarily in equity markets, as they operate in numerous other markets. Also, keep in mind that these filings only include long equity and options holdings and do not reflect the cash or short equity portions of their portfolio. This is the tenth hedge fund we've covered in our 3rd quarter 2008 edition of our hedge fund tracking series in which we're tracking 35+ prominent funds. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, Timothy Barakett's Atticus Capital, John Griffin's Blue Ridge Capital, and Bret Barakett's Tremblant Capital. Overall, its been one of the worst years ever for hedge funds, as we noted in our recent October hedge fund performance update. Thus, the recent moves they've made in their portfolios become all the more interesting given the way the market has played out.

More on Paulson & Co:
- Hedge Fund October performance numbers
- Paulson's congressional testimony
- Paulson's stake in Cheniere Energy (LNG)
- Paulson & Co shorts UK banks

Hedge Fund Related Linkfest

Since we're heavily into the hedge fund tracking series right now, figured we'd post up some relevant links for further reading.

Paulson & Co buys mortgages [FT]

If you ever wondered what SAC Capital's Stevie Cohen's house looks like, here ya go [DealBook]

Hedge Fund leverage historical comparison [PaulKedrosky]

Trimming the Hedgies [Ultimi Barbarorum]

Chill Out Man / Drink the KoolAid

(click to enlarge)

Hat tip Barry Ritholtz.

In other news, CNBC always wants you to drink the Kool-Aid. Just sayin'.

(click to enlarge)

Holiday Deals: Financial Edition

Since Black Friday and all the Holiday sales are upon us, we've decided to just highlight a few deals we're seeing on the financial side of things.

1. The Wall Street Journal for 75% off. Includes both the print and online editions. The rough economy has hit advertising budgets, so WSJ and other publications are cranking out the deals.
2. FREE Quicken Online. A great tool for managing all your finances... and best of all its now completely free.
3. $60 off Investors Business Daily. Another good deal on a well-known financial publication. Not to mention, you get 4 bonus weeks free too.
4. Free Stock Trades with Zecco. No joke, 10 free trades a month with Zecco. I use them as one of my brokers and the $50-60 you save in commissions each month adds up quick. That's easily $650+ in savings each year.

Stay tuned next week for when we debut our Holiday Wishlist: Financial Edition, for some gift ideas for that savvy investor/trader you know.... or just for yourself hah.

Happy Thanksgiving

... to all the American readers out there. Markets are closed today and people are eating turkey.... good times. If you aren't an American reader, then happy day off from the American markets to you. Keep in mind that markets also close early tomorrow (Friday) at 1 p.m. EST as well.

Hope everyone has a good day and fun semi-long weekend as well!

Hedge Fund Tracking: Bret Barakett's Tremblant Capital - 13F Filing 3rd Quarter 2008

This is the 3rd Quarter 2008 edition of our ongoing hedge fund tracking series. Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here. We're aiming to cover 35 or so prominent funds this time around and we'll be releasing the 13f analysis of each individual fund here in the coming weeks. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, Timothy Barakett's Atticus Capital, and John Griffin's Blue Ridge Capital. Next up, we have Bret Barakett's Tremblant Capital. If his last name sounds familiar, its because his brother, Timothy Barakett, manages fellow hedge fund Atticus Capital, whom we also track. 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." Tremblant is a $4.1 billion hedge fund based in New York and is run by Bret Barakett, who is a former portfolio manager at Moore Capital Management (the hedge fund run by the great Louis Bacon, whom we also track). So, as you can see, despite having a great mind of his own, Barakett has worked with some of the best in the macro game. But, as we noted in September, Tremblant has had a rough year. Tremblant recently disclosed a 5.2% stake in Advanced Medical Optics (EYE). Also, they added a stake in PharmaNet (PDGI). In addition to these stakes, you can view Tremblant's entire portfolio from the 2nd quarter here.

The following were Tremblant's long equity and options holdings as of September 30th, 2008 as filed with the SEC.


New Positions (Brand new positions that they initiated in the last quarter):
Chipotle (CMG/B)
Select Sector Financial (XLF)
SPDR Homebuilder ETF (XHB)
MEMC Electronic (WFR)
Discovery Holding Co (DSY)
KBW Regional Banks ETF (KRE)
Williams Cos (WMB)
Geoeye (GEOY)
Colfax (CFX)
IPCS (IPCS)
Google (GOOG)
Research in Motion (RIMM) Calls
MEMC Electronic (WFR) Calls
Charter Communications (CHTR)
TW Telecom (TWTC) Calls


Some Reduced Positions (Positions they sold some shares of - note not all sales listed)
Visa (V): Reduced by 17%
Apple (AAPL): Reduced by 16%
NYSE Euronext (NYX): Reduced by 6%
Qualcomm (QCOM): Reduced by 46%
Baidu (BIDU)): Reduced by 26%
Redhat (RHC) Calls: Reduced by 49%
Commscope (CTV): Reduced by 43%
Ntelos Holdings (NTLS): Reduced by 37%
CVS Caremark (CVS): Reduced by 36%
Inverness Medical (IMA): Reduced by 44%
Advanced Medical Optics (EYE): Reduced by 33%
Gafisa (GFA): Reduced by 47%
Focus Media (FMCN): Reduced by 68%
American Public Education (APEI): Reduced by 49%
Nuance Communications (NUAN): Reduced by 64%
Virgin Media (VMED): Reduced by 57%
Qualcomm (QCOM) Calls: Reduced by 45%
Focus Media (FMCN) Calls: Reduced by 91%


Positions with no change
none


Removed Positions (Positions they sold out of completely)
EMC (EMC) Calls
Chipotle (CMG/A)
Time Warner (TWX)
Cogent Comm (CCOI)
Baidu (BIDU) Calls
Thermo Fisher Scientific (TMO)
Time Warner (TWX) Calls
Suntech Power (STP)
Pharmaceutical Prod Dev (PPDI)
Apple (AAPL) Calls
Lehman Bros (LEH) Puts
Anadigics (ANAD)
Bare Escentuals (BARE)
Lululemon (LULU) Puts
Wyeth (WYE)
Central European Media (CETV)
Shenandoah Telecom (SHEN)
Cabelas (CAB) Puts
Petrochina (PTR)
China Petroleum (SNP)
LCAVision (LCAV)


Top 20 Holdings (by % of portfolio)

1. Visa (V): 7.68% of portfolio
2. Research in Motion (RIMM): 6.24% of portfolio
3. CVS Caremark (CVS) Calls: 6.2% of portfolio
4. Apple (AAPL): 5.6% of portfolio
5. NYSE Euronext (NYX): 5.3% of portfolio
6. Hologic (HOLX): 4.47% of portfolio
7. Hologic (HOLX) Calls: 4% of portfolio
8. Qualcomm (QCOM): 3.9% of portfolio
9. Green Mountain Coffee (GMCR): 3.9% of portfolio
10. Baidu (BIDU): 3.5% of portfolio
11. Corning (GLW): 3.5% of portfolio
12. Corning (GLW) Calls: 3.2% of portfolio
13. Melco Entertainment (MPEL): 2.9% of portfolio
14. Mckesson (MCK): 2.8% of portfolio
15. Eclipsys (ECLP): 2.7% of portfolio
16. RedHat (RHT) Calls: 2.5% of portfolio
17. Commscope (CTV): 2.4% of portfolio
18. RedHat (RHT): 2.2% of portfolio
19. Ntelos (NTLS): 2.1% of portfolio
20. Healthextras: 2% of portfolio

Assets listed in the long portfolio this quarter were a little over $2.1 billion compared to around $4.1 billion last quarter. Tremblant's portfolio definitely has some names that have seen abnormal amounts of selling pressure, so they were out reducing positions and raising cash levels it looks like. Please note that we have not detailed every single change to every single position in this update, but we have covered all the major moves. Also, keep in mind that these filings only include long equity and options holdings and do not reflect the cash or short portions of their portfolio. This is the ninth hedge fund we've covered in our 3rd quarter 2008 edition of our hedge fund tracking series in which we're tracking 35+ prominent funds. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, Timothy Barakett's Atticus Capital, and John Griffin's Blue Ridge Capital. Overall, its been one of the worst years ever for hedge funds, as we noted in our recent October hedge fund performance update. Thus, the recent moves they've made in their portfolios become all the more interesting given the way the market has played out.

More on Barakett & Tremblant:
- Tremblant's stake in PharmaNet (PDGI)
- Also, their stake in Advanced Medical Optics (EYE)
- Tremblant's performance numbers
- Tremblant's 2nd quarter '08 portfolio

Guitar Hedge Fund

There recently was a hedge fund formed to invest in guitars... and no, I'm not joking. Taken from the IG Blog,

"Anchorage Capital, a London investment firm, is expected to launch the Guitar Fund. Set up as a hedge fund, the Guitar Fund will seek investment returns by buying rare and vintage electric and acoustic guitars (steel-string and classical), plus mandolins, banjos and amps.

And get this, investors in the fund will also have the opportunity to actually play the guitars they invest in and take them home if they wish. Also, the fund plans to lend guitars out to well-known musicians for tours, recording and other events, which would enhance memorabilia value of the assets, ahem, guitars.

The basis for the fund’s idea is Vintage Guitar magazine’s “42 Guitar Index,” created in 1991 to track prices of vintage guitars. The index has demonstrated an average annual return of over 31% without experiencing a single down year.

The fund will have a fixed 10-year life and will be listed on the Channel Islands Stock Exchange. There are currently several institutional investors willing to contribute over half of the fund’s targeted kick-off investment amount.

What’s the amount, you ask? 55 million British pounds, the equivalent of about $100 million U.S. dollars."

First, we start seeing more publicity about wine funds, and now, a guitar fund. Maybe we should be thinking more outside of the box with some of our investments! Read the rest of the post over at IG Blog.

Hedge Fund Tracking: John Griffin's Blue Ridge Capital - 13F Filing 3rd Quarter 2008

This is the 3rd Quarter 2008 edition of our ongoing hedge fund tracking series. Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here. We're aiming to cover 35 or so prominent funds this time around and we'll be releasing the 13f analysis of each individual fund here in the coming weeks. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, and Timothy Barakett's Atticus Capital. Next up, we have John Griffin's Blue Ridge Capital. Now, Griffin is similar to Stephen Mandel at Lone Pine Capital and Lee Ainslie at Maverick Capital in that they all are 'Tiger Cubs' (a.k.a. pupils of Julian Robertson while at Tiger Management). Griffin though, is more well known because he was Julian Robertson's right hand man. So, needless to say, he knows his stuff. Blue Ridge seeks absolute returns by investing in companies who dominate their industries and shorting the companies who have fundamental problems. And, right off the bat that presents us with a bit of a problem in terms of analyzing 13F's. 13F's don't show short positions, they show long positions (unless the firm is short through puts, which we *can* see). So, the inherent problem with analyzing Blue Ridge (or any fund for that matter) is that we can't see the other side of their portfolio. But, this is increasingly important for Blue Ridge simply due to Griffin's investment strategy and the fact that his short positions are equally or more important than his longs. We have, however, gotten one sneak peek at what Blue Ridge has been shorting. Both Griffin at Blue Ridge and Lee Ainslie over at Maverick Capital like to effectively hedge with a solid balance of both long and short positions (like a true hedge fund... not like some of the crazy funds these days that aren't truly hedged).

Griffin attended the University of Virginia for undergrad and received his MBA from Stanford. Recently, the University of Virginia hosted a hedge fund panel which consisted of many of the 'Tiger Cubs' as well as the founder of Tiger Management, Julian Robertson. At the panel, numerous hedge fund managers laid out some of their investment theses. Additionally, we noted that Blue Ridge recently disclosed a 5.47% stake in Millipore (MIL) and Julian Robertson had recently bought some stocks to hedge his overall short portfolio.

Now, onto the 13F. We'd like to thank Alex Prywes for their help in our 13F tracking series as it has allowed us to cover more funds. Before beginning, we'd like to suggest that you check out Blue Ridge's portfolio from last quarter, so you can get a feel for how they're altering their portfolio. The following were Blue Ridge's long equity and options holdings as of September 30th, 2008 as filed with the SEC.


New Positions (Brand new positions that they initiated in the last quarter):
Hansen Natural (HANS): 3.6% of portfolio
SPDR Gold Trust (GLD): 3.49% of portfolio
Illumina (ILMN): less than 1% of portfolio
Goldman Sachs (GS): less than 1% of portfolio
Lululemon (LULU): less than 1% of portfolio
Las Vegas Sands (LVS): less than 1% of portfolio
Foster Wheeler (FWLT): less than 1% of portfolio
Wachovia (WB): less than 1% of portfolio


Added to (Positions they already owned but added more shares)
Amazon (AMZN): Increased position by 146%
Goodrich Petroleum (GDP): Increased position by 108%
Berkshire Hathaway (BRK.A): Increased position by 97%
Target (TGT): Increased position by 47%
Echostar (SATS): Increased position by 35%
Thermo Fisher Scientific (TMO): Increased position by 27.6%
Anadarko Petroleum (APC): Increased position by 24%
Grupo Televisa (TV): Increased position by 20%


Reduced Positions (Positions they sold some shares of)
Amgen (AMGN): Sold off 85%
Charles Schwab (SCHW): Sold off 70%
Martin Marietta (MLM): Sold off 55%
Netflix (NFLX): Sold off 50%
Grupo Aeroportuario del Pacifico (PAC): Sold off 49%
Exterran Holdings (EXH): Sold off 47.6%
Discovery Holding (DSY): Sold off 41.5%
Eagle Materials (EXP): Sold off 41%
Packaging Corp (PKG): Sold off 30%
Broadridge Financial Solutions (BR): Sold off 11%
Compton Petroleum (CMZ): Sold off 11%
Visa (V): Sold off 10.4%
Fomento Economico Mexicano (FMX): Sold off 9%


Positions with no change
Covanta (CVA)
Millipore (MIL)
MBIA (MBI)
American Express (AXP) Calls
Greenlight Capital RE (GLRE)
Gold Reserve Inc (GRZ)
Elong (LONG)
Perfect World (PWRD)
Washington Mutual (WM) Puts


Removed Positions (Positions they sold out of completely)
Apple (AAPL)
American Express (AXP): They sold all their common shares, but still hold Calls, as noted above
Bare Escentuals (BARE)
Countrywide Financial
Crocs (CROX)
Fairfax Financial (FFH)
Fannie Mae (FNM)
Freddie Mac (FRE)
First Marblehead (FMD)
Google (GOOG)
Indymac (IDMCQ)
Nutrisystem (NTRI)
Research in Motion (RIMM)
Rowan (RDC)
Vulcan Materials (VMC)
Walmart (WMT)
Wyeth (WYE)


Top 20 Holdings (by % of portfolio)

1. Berkshire Hathaway (BRK.A): 8.13% of portfolio
2. Grupo Televisa (TV): 7.6% of portfolio
3. Target (TGT): 7.44% of portfolio
4. Covanta (CVA): 7.2% of portfolio
5. Millipore (MIL): 7% of portfolio
6. Amazon (AMZN): 6.4% of portfolio
7. ThermoFisher (TMO): 5.6% of portfolio
8. Anadarko (APC): 5.3% of portfolio
9. Broadridge Financial (BR): 3.7% of portfolio
10. Hansen Natural (HANS): 3.6% of portfolio
11. Visa (V): 3.6% of portfolio
12. SPDR Gold Trust (GLD): 3.5% of portfolio
13. Fomento Economico Mexicano (FMX): 2.67% of portfolio
14. Echostar (SATS): 2.6% of portfolio
15. Martin Marietta (MLM): 2.6% of portfolio
16. Charles Schwab (SCHW): 2.5% of portfolio
17. Packaging Corp (PKG): 2.5% of portfolio
18. Discovery Holdings (DSY): 2.2% of portfolio
19. Goodrich Petroleum (GDP): 2.2% of portfolio
20. Amgen (AMGN): 2.17% of portfolio
    

Assets listed in the long portfolio this quarter were a little over $2.6 billion compared to around $4 billion last quarter. Keep in mind that these filings only include long equity and options holdings and do not reflect the cash or short portions of their portfolio. This is the eighth hedge fund we've covered in our 3rd quarter 2008 edition of our hedge fund tracking series in which we're tracking 35+ prominent funds. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, and Timothy Barakett's Atticus Capital. Overall, its been one of the worst years ever for hedge funds, as we noted in our recent October hedge fund performance update. Thus, the recent moves they've made in their portfolios become all the more interesting given the way the market has played out.

More on Griffin & Blue Ridge:
- Blue Ridge discloses stake in Millipore (MIL)
- 'Tiger Cub' hedge fund panel (investment ideas)
- Blue Ridge is/was shorting UK banks
- Blue Ridge's 2nd quarter '08 portfolio
- John Griffin & Rick Gerson biographies
- Julian Robertson reveals some purchases

Peter Schiff: 2 Videos of Latest Commentary

Hedge Fund Tracking: Timothy Barakett's Atticus Capital - 13F Filing 3rd Quarter 2008

This is the 3rd Quarter 2008 edition of our ongoing hedge fund tracking series. Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here. We'll be bringing you the long equity portfolios of numerous prominent hedge funds. Hedge funds we track here at MarketFolly.com include: Tudor Investment Corp, Greenlight Capital, Blue Ridge Capital, Moore Capital Management, and literally many, many more. We're aiming to cover 35 or so prominent funds this time around and we'll be releasing the 13f analysis of each individual fund here in the coming weeks. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Stephen Mandel's Lone Pine Capital, and Lee Ainslie's Maverick Capital.

Fund Background: Next up, we have Atticus Capital. Atticus Capital is a hedge fund ran by Timothy Barakett. In 2005, Atticus' funds were up a combined 45%. And, they finished well over 30% for 2006. Barakett founded the firm at age 26 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. And, they continue to hold some of their position in what is now the combined FCX. Barakett received his BA in Economics from Harvard and his MBA from Harvard as well. 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.

You may have heard about Atticus over the past few weeks because they have not been performing well at all this year. In our September hedge fund performance update, we noted that Atticus European was -42.5% for the year as of September while Atticus Global was -27.2% over the same timeframe. And, consequently, Atticus was a victim of liquidation rumors, which were quickly denied. We previously analyzed Atticus' portfolio holdings back in June and noticed that they had significant natural resource and mining positions at the time. We'll get into the details below, but you can take a guess as to where a lot of their losses are coming from this year. Overall, it's been one of the worst years for hedge funds in a long time. And although Atticus still exists as a fund, they have definitely had a rough year and have been selling off assets.

The following were Atticus' long equity and options holdings as of September 30th, 2008 as filed with the SEC.

New Positions (Brand new positions that they initiated in the last quarter):
Russell 2000 Index (IWM) Puts
CSX Corp (CSX) Calls
Financial select sector (XLF) Puts


Added to (Positions they already owned but added more shares)
Vale (RIO) Calls
Emisphere Technologies (EMIS)


Reduced Positions (Positions they sold some shares of)
Union Pacific (UNP)
Crown Castle (CCI)
Nyse Euronext (NYX)
Occidental Petroleum (OXY)
Freeport McMoran (FCX)
Gold Fields (GFI)
Freeport McMoran (FCX) Calls
Newmont Mining (NEM)
Western Union (WU)
KT Corp (KTC)
Telekomunikasi Indonesia (TLK)
China Telecom (CHA)
Grupo Aeroportuario del Pacifico (PAC)
Grupo Aeroportuario del Sureste (ASR)
Sunair Services (SNE)
Petrochina (PTR)


Positions with no change
Synvista Therapeutics (SYI)


Removed Positions (Positions they sold out of completely)
Conoco Philips (COP)
Burlington Northern (BNI)
Conseco (CNO)
Peabody (BTU)
Mastercard (MA)
Norfolk Southern (NSC)
Genomic Health (GHDX)
Visa (V)
Focus Media (FMCN)
Nyse Euronext (NYX) Puts
Banco Itau (ITU)
Boeing (BA)
Canadian Natural Resources (CNQ)
Uhaul (UHAL)
Baidu (BIDU)
Banco Bradesco (BBD)
Companhia Saneamento Basico (SBS)
Praxair (PX)
National Financial Partners (NFP)
Unibanco (UBB)
Visa (V) Calls
Conoco Philips (COP) Calls
CSX (CSX)
Clean Energy (CLNE)
General Motors (GM)
BHP (BHP)
XTO Energy (XTO)
Marriott (MAR)
Starwood Hotels (HOT)
Nymex (NMX)
Cisco (CSCO)
Microsoft (MSFT)
American Tower (AMT)
Chesapeake (CHK)
Sandridge (SD)
Monsanto (MON)
Potash (POT)
Research in Motion (RIMM)
Apple (AAPL)
Google (GOOG)


Top 20 Holdings (by % of portfolio)

1. CSX (CSX) Calls
2. Vale (RIO) Calls
3. Freeport McMoran (FCX) Calls
4. Union Pacific (UNP)
5. Financial select sector (XLF) Puts
6. Crown Castle (CCI)
7. Russell 2000 index (IWM) Puts
8. Occidental Petroleum (OXY)
9. NYSE Euronext (NYX)
10. Newmont Mining (NEM)
11. Freeport McMoran (FCX)
12. Telekomunikasi Indonesia (TLK)
13. Western Union (WU)
14. Emisphere Technologies (EMIS)
15. Gold Fields (GFI)
16. China Telecom (CHA)
17. Synvista Therapeutics (SYI)
18. Grupo Aeroportuario del Sureste (ASR)
19. KT Corp (KTC)
20. Grupo Aeroportuario del Pacifico (PAC)
    

Atticus was definitely out liquidating a lot of assets. In the quarter prior, they had nearly $8 billion in their long equity portfolio. This quarter, they had only around $500 million worth of positions. That is some serious deleveraging and unwinding. This is the seventh hedge fund we've covered in our 3rd quarter 2008 edition of our hedge fund tracking series in which we're tracking 35+ prominent funds. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Stephen Mandel's Lone Pine Capital, and Lee Ainslie's Maverick Capital.

Stay tuned this week and next week as we detail the portfolio holdings of more funds. Overall, its been one of the worst years ever for hedge funds, as we noted in our recent October hedge fund performance update. Thus, the recent moves they've made in their portfolios become all the more interesting given the way the market has played out. Here are some funds to look forward to that we will be tracking: David Einhorn's Greenlight Capital, Paul Tudor Jones' Tudor Investment Corp, Louis Bacon's Moore Capital Management, and many, many more.

More on Barakett & Atticus:
- Atticus Capital's 2nd quarter '08 portfolio holdings
- October Hedge Fund Performance update

Paul Kedrosky's Economic Predictions

Paul Kedrosky came out with a glut of predictions, which, for the most part, I definitely see myself agreeing with. The ultimate question here, is when do markets reflect such possible outcomes? Since they are forward looking mechanisms, it might be worth playing such scenarios in the market 6-8 months before you anticipate them to actually happen. Here are Paul's thoughts:

• We are going through a credit crisis sparked by the subprime meltdown. It is broader than that, however, really the tail end of an orgy of leverage and credit creation dating back at least 15 years
• The unwinding of all this credit bubble will take longer than most people expect, and the damage will continue to be broader than most expect. Beyond banks and financial institutions, it will include many municipalities, some large-cap tech names reliant on major debt-financed network buildouts, a host of debt-financed non-financial companies, and some sovereign nations. Total cost: Bridgewater's $2.7-trillion looks close enough to me .
• S&P forward-year earnings forecasts will come down faster than at any time in recent history. We will see 20% average estimate reductions across the board, leading to a further revaluation of the markets. After all, at S&P 1010 we are trading at 19x trailing earnings, and 18x forward, neither of which are inexpensive historically speaking. Admittedly, the above is not the non-financial S&P P/E -- ex- financial and consumer stocks we are more like 14x -- but it is a distinction that will get blurred as we go into this recession.
• We are already in a recession that will last well into the the fourth quarter of next year.
• Unemployment may touch 9% in the U.S. at trough.
• Obama will win the U.S. presidency.
• Housing will fall 10-15% further in U.S., and we are only beginning major declines in Canada, U.K., Australia, and elsewhere.
• U.S. consumers will become much more aggressive savers, both through debt reduction and direct saving. Similarly, future fiscal stimulus will largely be saved in service of this overdue need to fix domestic balance sheets.
• U.S. long yields have to rise, making curve steepener trades feel appropriate.
• Commodities will stay under pressure for the next two years,and then reverse savagely as developed countries emerge from recession at very similar times. We have newly resynchronized the global economies, which will have immense consequences.
• Coming out the other side, we will see a barbell economy, with growth and investor interest at the mega-cap consolidator end, and at the entrepreneurial smaller end. The latter will be driven by major developments in clean technology, in particular, which was just given a two-year window to gestate before the major economies worldwide turn higher and begin driving energy prices straight up.

We'll definitely have to revisit this list in a year's time, and again in two years time to see just how close Paul is with his predictions.

Wall Street Journal & Investors Business Daily Deals

Just wanted to take a minute and point out that this awesome economy has obviously affected the advertising industry and in turn all the major media/publications. So, you can save a ton of money and get cheap subscriptions to the two most popular financial publications: The Wall Street Journal & Investors Business Daily.

I had no idea it had gotten this cheap, but you can now get the Wall Street Journal for 75% off. That's ridiculously cheap, so take advantage of it.

Also worth mentioning is the fact that you can get $60 off Investors Business Daily, as well as 4 extra weeks free.

Gotta love the crappy economy! Enjoy.

Dennis Gartman's Rules of Trading

I've seen these rules numerous times but have never posted them up. So, I have to give a hat tip to Todd Sullivan over at Value Plays for posting them up recently and reminding me of them again. If you are unfamiliar with Dennis Gartman, he writes the famed Gartman Letter. Taken from his site, "The Gartman Letter is a daily commentary on the global capital markets subscribed to by leading banks, broking firms, hedge funds, mutual funds, energy and grain trading companies around the world." He also talks about his trades/plays and walks you through his thought-process. We definitely enjoy his commentary and if anyone is a subscriber, let us know. To the rules:

DENNIS GARTMAN’S NOT-SO-SIMPLE RULES OF TRADING


1. Never, Ever, Ever, Under Any Circumstance, Add to a Losing Position… not ever, not never! Adding to losing positions is trading’s carcinogen; it is trading’s driving while intoxicated. It will lead to ruin. Count on it!

2. Trade Like a Wizened Mercenary Soldier: We must fight on the winning side, not on the side we may believe to be correct economically.

3. Mental Capital Trumps Real Capital: Capital comes in two types, mental and real, and the former is far more valuable than the latter. Holding losing positions costs measurable real capital, but it costs immeasurable mental capital.

4. This Is Not a Business of Buying Low and Selling High; it is, however, a business of buying high and selling higher. Strength tends to beget strength, and weakness, weakness.

5. In Bull Markets One Can Only Be Long or Neutral, and in bear markets, one can only be short or neutral. This may seem self-evident; few understand it however, and fewer still embrace it.

6. “Markets Can Remain Illogical Far Longer Than You or I Can Remain Solvent.” These are Keynes’ words, and illogic does often reign, despite what the academics would have us believe.

7. Buy Markets That Show the Greatest Strength; Sell Markets That Show the Greatest Weakness: Metaphorically, when bearish we need to throw rocks into the wettest paper sacks, for they break most easily. When bullish we need to sail the strongest winds, for they carry the farthest.

8. Think Like a Fundamentalist; Trade Like a Simple Technician: The fundamentals may drive a market and we need to understand them, but if the chart is not bullish, why be bullish? Be bullish when the technicals and fundamentals, as you understand them, run in tandem.

9. Trading Runs in Cycles, Some Good, Most Bad: Trade large and aggressively when trading well; trade small and ever smaller when trading poorly. In “good times,” even errors turn to profits; in “bad times,” the most well-researched trade will go awry. This is the nature of trading; accept it and move on.

10. Keep Your Technical Systems Simple: Complicated systems breed confusion; simplicity breeds elegance. The great traders we’ve known have the simplest methods of trading. There is a correlation here!

11. In Trading/Investing, An Understanding of Mass Psychology Is Often More Important Than an Understanding of Economics: Simply put, “When they are cryin’, you should be buyin’! And when they are yellin’, you should be sellin’!”

12. Bear Market Corrections Are More Violent and Far Swifter Than Bull Market Corrections: Why they are is still a mystery to us, but they are; we accept it as fact and we move on.

13. There Is Never Just One Cockroach: The lesson of bad news on most stocks is that more shall follow… usually hard upon and always with detrimental effect upon price, until such time as panic prevails and the weakest hands finally exit their positions.

14. Be Patient with Winning Trades; Be Enormously Impatient with Losing Trades: The older we get, the more small losses we take each year… and our profits grow accordingly.

15. Do More of That Which Is Working and Less of That Which Is Not: This works in life as well as trading. Do the things that have been proven of merit. Add to winning trades; cut back or eliminate losing ones. If there is a “secret” to trading (and of life), this is it.

16. All Rules Are Meant To Be Broken…. but only very, very infrequently. Genius comes in knowing how truly infrequently one can do so and still prosper.

Hedge Fund Tracking: Lee Ainslie's Maverick Capital - 13F Filing 3rd Quarter 2008

(Note: Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here).

This is the 3rd Quarter 2008 edition of our ongoing hedge fund tracking series. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, and Stephen Mandel's Lone Pine Capital. Next up, we have Maverick Capital. Lee Ainslie started Maverick Capital back in 1993 with $38 million. Nowadays, the fund is worth $10 billion. Ainslie, like many of the other fund managers we've profiled, has a background rooted in learning from legendary great Julian Robertson at Tiger Management. These proteges (nicknamd 'Tiger Cubs') learned from the best and have had great success running their own funds. Some contacts over at Maverick have explained that their strategy is straight up stock picking, both long and short. They made it clear though, that they do not employ pairs trades. Although, some of their long/short setups might be in the same sector.

They try to hedge their positions like the name hedge fund implies by picking out the shining stars in certain sectors, as well as identifying the pieces of garbage. Now, of course, this presents us with a problem in that the 13F filings only show long positions (unless they're holding puts on a name, we can see those). So, a good amount of Maverick's portfolio (the entire short side) is unbeknownst to us, because they have reported zero put positions. But, let's look on the bright side in that we can see all their long positions. Maverick uses a value approach (obviously learned from Julian) and one of their most popular metrics is finding companies and comparing their enterprise value to sustainable free cash flow.

As we noted in our October hedge fund performance numbers update, one of Maverick's funds was -6.34% in October and is now -26.47% year-to-date. (You can check out their most recent investor letter). We suggest checking out Maverick's 2nd quarter '08 portfolio holdings so you can get a sense as to how they were shifting around their portfolio recently. Also, we recently noted that Maverick recently sold out of their entire Under Armour (UA) position via a 13G filing.

So, now that we've got a background on Ainslie and Maverick, let's take a quick look at his portfolio highlights. We'd like to give a special thank you to Alex Prywes who has helped us with the 13f analysis so that we can cover more funds.

The following were Maverick's long equity and options holdings as of September 30th, 2008 as filed with the SEC.

New Positions (Brand new positions that Maverick initiated in the last quarter):
Apollo Group (APOL)
Amgen (AMGN)
Priceline (PCLN)
XTO Energy (XTO)
Activision Blizzard (ATVI)
Schering Plough (SGP)
Devry (DV)
HanesBrands (HBI)
Lender Processing (LPS)
BB&T (BBT)
Morgan Stanley (MS)
M&T Bank (MTB)
Yingli Green Energy (YGE)
Goldman Sachs (GS)
Freeport McMoran (FCX)
Las Vegas Sands (LVS)
J Crew (JCG)
Hudson City Bancorp (HCBK)
SalesForce (CRM)
Zale Corp (ZLC)
Nutrisystem (NTRI)
Sealy (ZZ)
Fortress Investment Group (FIG)
Hancock Holding Co (HBHC)
Bancorp Southern (BCSO)
Washing Mutual (WM)
Susquehanna Bancshares (SUSQ)


Added to (Positions Maverick already owned but added more shares)
Citizens Republic Bancorp (CRBC): Increased position by 293%
Berkshire Hathaway (BRK.B): Increased position by 112%
MSCI Inc (MXB): Increased position by 87%
Southern Financial Group (AFN): Increased position by 80%
Universal American Corp (UAM): Increased position by 58.5%
Marvell (MRVL): Increased position by 45%
Cigna (CI): Increased position by 43%
Netapp (NTAP): Increased position by 35%
Cognizant Tech (CTSH): Increased position by 33%
GMarket (GMKT): Increased position by 27%
First Solar (FSLR): Increased position by 22%
Lorillard (LO): Increased position by 21%
Dish Network (DISH): Increased position by 20%
MetroPCS (PCS): Increased position by 19%
CVS Caremark (CVS): Increased position by 14%
AthenaHealth (ATHN): Increased position by 12.7%
Leap Wireless (LEAP): Increased position by 12%
Textron (TXT): Increased position by 9.9%
Monsanto (MON): Increased position by 7%
Digital River (DRIV): Increased position by 4.6%
Thermo Fisher Scientific (TMO): Increased position by 3.8%
Gilead Sciences (GILD): Increased position by 1.3%
Berkshire Hathaway (BRK.A): Increased position by 0.16%
Cypress Biosciences (CYPB): Increased position by 0.05%


Reduced Positions (Positions Maverick sold some shares of)
Cardinal Health (CAH): Reduced by 55%
Covidien (COV): Reduced by 54%
Western Union (WU): Reduced by 51%
National City (NCC): Reduced by 51%
Marsh & Mclennan (MMC): Reduced by 44.7%
Potash (POT): Reduced by 44%
Baxter (BAX): Reduced by 36%
Burlington Northern (BNI): Reduced by 35%
Advanced Micro Devices (AMD): Reduced by 34%
America Movil (AMX): Reduced by 29%
Under Armour (UA): Reduced by 29% - Note: They have since sold off their entire position
DirecTV (DTV): Reduced by 28%
Dicks Sporting Goods (DKS): Reduced by 25%
Trubion Pharmaceuticals (TRBN): Reduced by 22%
Infinera (INFN): Reduced by 9.7%
Wyeth (WYE): Reduced by 9.6%
Home Inns & Hotels (HMIN): Reduced by 9.4%
Resmed (RMD): Reduced by 9%
Palm (PALM): Reduced by 7.8%
Citrix (CTXS): Reduced by 7.2%
Liberty Media (LMDIA): Reduced by 5.6%
Apple (AAPL): Reduced by 4.8%
Raytheon (RTN): Reduced by 3%
Fidelity National Info (FIS): Reduced by 2.9%
Comscore (SCOR): Reduced by 2.7%
Research in Motion (RIMM): Reduced by 2.2%


Positions with no change
Lamar Advertising (LAMR)
VMWare (VMW)
Newstar Financial (NEWS)
BPW Acquisition (BPW)
First Advantage Corp (FADV)
Bluefly (BFLY)
First Marblehead (FMHD)
Ultra Clean Holdings (UCTT)
Vivus Inc (VVUS)


Removed Positions (Positions Maverick sold out of completely)
American Capital Strategies (ACAS)
Amylin Pharma (AMLN)
Avon Products (AVP)
Bank of New York Mellon (BK)
China Nepstar (NPD)
Corcept Therapeutics (CORT)
Discovery Holdings (DISCA)
Forest Labs (FRX)
Gamestop (GME)
Genentech (DNA)
Google (GOOG)
Hansen Natural (HANS)
ITT Educational (ESI)
JP Morgan Chase (JPM)
Lexmark (LXK)
Lumber Liquidators (LL)
Macys (M)
Mylan (MYL)
Nordstrom (JWN)
Polo Ralph Lauren (RL)
Sohu (SOHU)
Suntrust Banks (STI)
Viacom (VIA)
Visa (V)
Zimmer Holdings (ZMH)


Top 20 Holdings (by % of portfolio)

1. Lorillard (LO): 3.98% of portfolio
2. Apple (AAPL): 3.58% of portfolio
3. First Solar (FSLR): 3.38% of portfolio
4. America Movil (AMX): 3.29% of portfolio
5. Raytheon (RTN): 3.22% of portfolio
6. Marvell (MRVL): 3.2% of portfolio
7. Apollo Group (APOL): 3.19% of portfolio
8. Research in Motion (RIMM): 3.16% of portfolio
9. Amgen (AMGN): 3.15% of portfolio
10. Gilead (GILD): 2.8% of portfolio
11. Netapp (NTAP): 2.79% of portfolio
12. CVS Caremark (CVS): 2.76% of portfolio
13. Baxter (BAX): 2.54% of portfolio
14. Citrix (CTXS): 2.38% of portfolio
15. Thermo Fisher Scientific (TMO): 2.33% of portfolio
16. Advanced Micro Devices (AMD): 2.3% of portfolio
17. Liberty Media (LMDIA): 2.09% of portfolio
18. Monsanto (MON): 1.9% of portfolio
19. Priceline (PCLN): 1.85% of portfolio
20. XTO Energy (XTO): 1.79% of portfolio

This is the fifth hedge fund we've covered in our 3rd quarter 2008 edition of our hedge fund tracking series in which we're tracking 35+ prominent funds. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, and Stephen Mandel's Lone Pine Capital. Stay tuned this week and next week as we detail the portfolio holdings of more funds. Overall, its been one of the worst years ever for hedge funds, as we noted in our recent October hedge fund performance update. Thus, the recent moves they've made in their portfolios become all the more interesting given the way the market has played out. Here are some funds to look forward to that we will be tracking: David Einhorn's Greenlight Capital, Paul Tudor Jones' Tudor Investment Corp, Louis Bacon's Moore Capital Management, and many, many more.

More on Ainslie & Maverick:
- October Hedge Fund Performance numbers
- Maverick's recent Investor Letter
- Maverick's 2nd quarter '08 portfolio holdings & 13f analysis
- Ainslie's Maverick Capital sells entire Under Armour (UA) stake
- 'Tiger Cub' hedge fund panel
- Julian Robertson (Ainslie's mentor) reveals some recent buys

ETF Cheat Sheet

If you're ever in a hurry to place a trade based on a sector or specific grouping of stocks, then fear not. Bespoke is out with their handy ETF Cheat Sheet which breaks down the various ETFs and their tickers. Download the .pdf here.

Hedge Fund Tracking: Stephen Mandel's Lone Pine Capital - 13F Filing 3rd Quarter 2008

(Note: Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here).

This is the 3rd Quarter 2008 edition of our ongoing hedge fund tracking series. We're aiming to cover 35 or so prominent funds this time around and we'll be releasing the 13f analysis of each individual fund here in the coming weeks. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, and Bill Ackman's Pershing Square. Next up, we have Lone Pine Capital, managed by Stephen Mandel Jr. Lone Pine is an $8 Billion fund that has returned over 25% annually ever since its inception in 1997. Why is Mandel worth following you might ask? Well, he served as a consumer/retail analyst for Tiger Management back in the day for legendary investor Julian Robertson. Robertson's proteges/right-hand men have been nicknamed the "Tiger Cubs" and many have started their own funds. So, not only has Mandel learned from one of the best, but he has put up some very solid returns himself. Mandel is well versed in the ways of finding undervalued companies and his funds typically like to sniff out solid companies with good management that are trading below their intrinsic value.

A year ago, 1 of his funds was up 34% before fees while another was up 32% before fees. His track record speaks for itself. And, not to mention, he learned from one of the greats in Julian Robertson. However, 2008 has not been kind to Lone Pine, as they find themselves -26.5% for the year as of the end of September. You can also see how numerous other hedge funds have fared with our October hedge fund performance update. Before checking out their holdings from last quarter, you might be interested in checking out our analysis of Lone Pine's previous 13F (2nd quarter). Additionally, we noted that Lone Pine had recently taken a 6.8% stake in Dolby (DLB).

So, now that we've got a background on Mandel and Lone Pine, let's take a quick look at his portfolio highlights. Keep in mind that this is merely a brief summary of Lone Pine's top holdings. Due to the time sensitive nature of the 13F material, we wanted to get this information posted as soon as possible. Also, we'd like to give a special thank you to Alex Prywes who has helped us with the 13f analysis so that we can cover more funds.

The following were Lone Pine's long equity and options holdings as of September 30th, 2008 as filed with the SEC.

New Positions (Brand new positions that Lone Pine initiated in the last quarter):
Crown Castle (CCI)
Dolby Labs (DLB)
First Horizon National Corp (FHN)
Precision Cast Parts (PCP)
Sears Holdings (SHLD) Puts
National City Corp (NCC)
Hansen Natural (HANS)


Added to (Positions LP already owned but added more shares)
Visa (V): Increased position by 180%.
Priceline (PCLN): Increased position by 154%.
Weatherford (WFT): Increased position by 61%.
Qualcomm (QCOM): Increased position by 57%.
Mastercard (MA): Increased position by 51%.
XTO Energy (XTO): Increased position by 40%.
America Movil (AMX): Increased position by 26%.
Sandridge Energy (SD): Increased position by 12%.
Lorillard (LO): Increased position by 3%.


Reduced Positions (Positions LP sold some shares of)
Sears Holdings (SHLD) Puts: Reduced by 99.85%.
Bunge (BG) Puts: Reduced by 99%.
Sears Holdings (SHLD) 2nd set of Puts: Reduced by 93%
Dicks Sporting Goods (DKS): Reduced by 49.5%.
Eagle Materials (EGLE): Reduced by 38%.
SAIC (SAI): Reduced by 25.7%.
Fastenal (FAST): Reduced by 24.95%.
Teradata (TDC): Reduced by 6.73%.
MSC Industrial (MSM): Reduced by 4.84%.


Positions with no change
Deltek (PROJ): 4.34% of portfolio


Removed Positions (Positions LP sold out of completely)
Amazon (AMZN)
Entergy (ETR)
Monsanto (MON)
CB Richard Ellis (CBG)
New York Times (NYT) Puts
Brookfield Asset Mgmt (BAM)
Infosys (INFY)
Google (GOOG)
Illumina (ILMN)


Top 20 Holdings (by % of portfolio)

1. America Movil (AMX): 15.9% of the portfolio
2. Qualcomm (QCOM): 14.8% of the portfolio
3. XTO Energy (XTO): 10.6% of the portfolio
4. Visa (V): 5.46% of the portfolio
5. Sandridge Energy (SD): 5.17% of the portfolio
6. Priceline (PCLN): 4.72% of the portfolio
7. Lorillard (LO): 4.67% of the portfolio
8. Fastenal (FAST): 4.34% of the portfolio
9. MSC Industrial (MSM): 4.34% of the portfolio
10. Crown Castle (CCI): 4.10% of the portfolio
11. Precision Cast Parts (PCP): 3.78% of the portfolio
12. Weatherford (WFT): 3.73% of the portfolio
13. Mastercard (MA): 3.34% of the portfolio
14. Teradata (TDC): 3.22% of the portfolio
15. Dolby Labs (DLB): 2.98% of the portfolio
16. Hansen Natural (HANS): 2.49% of the portfolio
17. SAIC (SAI): 1.2% of the portfolio
18. Eagle Materials (EGLE): 1.1% of the portfolio
19. Sears Holdings (SHLD) Puts: 0.31% of the portfolio
    
20. Dicks Sporting Goods (DKS): 0.76% of the portfolio

This is the fourth hedge fund we've covered in our 3rd quarter 2008 edition of our hedge fund tracking series in which we're tracking 35+ prominent funds. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, and Bill Ackman's Pershing Square. Stay tuned this week and next week as we detail the portfolio holdings of more funds. Overall, its been one of the worst years ever for hedge funds, as we noted in our recent October hedge fund performance update. Thus, the recent moves they've made in their portfolios become all the more interesting given the way the market has played out. Here are some funds to look forward to that we will be tracking: David Einhorn's Greenlight Capital, Lee Ainslie's Maverick Capital, Paul Tudor Jones' Tudor Investment Corp, Louis Bacon's Moore Capital Management, and many, many more.

More on Stephen Mandel and Lone Pine Capital:
- Lone Pine takes 6.8% stake in Dolby (DLB)
- Lone Pine's 2nd quarter 2008 portfolio holdings & 13f analysis
- October Hedge Fund performance numbers
- Julian Robertson (Mandel's mentor) reveals some recent buys
- 'Tiger Cub' Hedge Fund Panel (investment ideas)
- September Hedge Fund performance numbers

Apple (AAPL): Steve Jobs' Replacement?

Fortune has a must-read piece out for anyone who is invested in or thinking about investing in Apple (AAPL). Steve Jobs is arguably the most important person associated with a publicly traded company these days. His time to step down will come at some point, but the question remains "Who will succeed him?" Fortune has postulated (as have many others) that Tim Cook is the man for the job. Read the full article here.

Hedge Fund Tracking: Bill Ackman's Pershing Square - 13F Filing 3rd Quarter 2008

(Note: Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here).

This is the 3rd Quarter 2008 edition of our ongoing hedge fund tracking series. We'll be bringing you the long equity portfolios of numerous prominent hedge funds. Hedge funds we track here at MarketFolly.com include: Tudor Investment Corp, Maverick Capital, Greenlight Capital, Blue Ridge Capital, Moore Capital Management, Lone Pine Capital, and literally many, many more. We're aiming to cover 35 or so prominent funds this time around and we'll be releasing the 13f analysis of each individual fund here in the coming weeks. We've already covered Whitney Tilson's T2 Partners and Peter Thiel's Clarium Capital.

Next up we have Pershing Square Capital Management. If you're unfamiliar with them, Bill Ackman runs Pershing Square Capital, a well known value/activist based hedge fund. The fund started in 2003 after Gotham Partners broke up. The past few years, he has had notable short positions in the bond insurers such as MBIA (MBI) and Ambac (ABK). Some of his activist positions include Target (TGT) and Borders (BGP). Simply put, Ackman is a smart man. Recently, he detailed his plans for Target to spin-off its real-estate to unlock value. We'll see if this proposal picks up any steam. We recently noted Pershing Square's portfolio performance, which was included in our September hedge fund performance update. Additionally, we've updated the performance of various hedge funds in October. Also, we wrote about Mr. Ackman's recent speech at the Value Investing Congress. Furthermore, you can view Pershing Square's most recent investor letter here. Lastly, Ackman recently sat down with Charlie Rose for an interview.

So, now that we've got a background on Ackman and Pershing, let's take a quick look at his portfolio highlights. Keep in mind that this is merely a brief summary of Pershing's top holdings. Due to the time sensitive nature of the 13F material, we wanted to get this information posted as soon as possible. The following were Pershing's holdings as of September 30th, 2008 as filed with the SEC.

New Positions (Brand new positions that Pershing initiated in the last quarter):
American International Group (AIG)
American International Group (AIG) Calls
Mastercard (MA)
Visa (V)
Wachovia Bank (WB)

Removed Positions (Positions Pershing sold out of completely last quarter):
MBIA (MBI) Puts
Cadbury (CBY)

Notable Position Changes
- Sold 92.5% of their Sears Holdings (SHLD) Position

Pershing Square's Entire Portfolio (based on % of portfolio):

1. Target (TGT): 24.7% of portfolio
2. EMC Corp (EMC): 18% of portfolio
3. Dr. Pepper Snapple (DPS): 15% of portfolio
4. Wachovia (WB): 8.7% of portfolio
5. Wendy's/Arby's (WEN): 7.5% of portfolio
6. Long's Drugstores (LDG): 6.1% of portfolio
7. Barnes & Noble (BKS): 4.4% of portfolio
8. Visa (V): 4.2% of portfolio
9. American International Group (AIG): 2.8% of portfolio
10. Mastercard (MA): 2.6% of portfolio
11. Target (TGT) Calls: 2.5% of portfolio
12. Borders (BGP): 1.8% of portfolio
13. Sears Holdings (SHLD): 1.2% of portfolio
14. Greenlight Capital RE (GLRE): 0.1% of portfolio
15. American International Group (AIG) Calls
    

Keep in mind that we have not detailed every tiny maneuver they have made with their portfolio. In some of their holdings they added shares, others they sold some shares, and some of their positions were left unchanged from last quarter. We are essentially capturing the major moves Pershing has made over the past quarter with regards to their portfolio.

This is the third hedge fund we've covered in our 3rd quarter 2008 edition of our hedge fund tracking series in which we're tracking 35+ prominent funds. We've already covered Whitney Tilson's T2 Partners and Peter Thiel's Clarium Capital. Stay tuned this week and next week as we detail the portfolio holdings of more funds. Overall, its been one of the worst years ever for hedge funds, as we noted in our recent October hedge fund performance update. Thus, the recent moves they've made in their portfolios become all the more interesting given the way the market has played out. Here are some funds to look forward to that we will be tracking: David Einhorn's Greenlight Capital, Lee Ainslie's Maverick Capital, Paul Tudor Jones' Tudor Investment Corp, Louis Bacon's Moore Capital Management, and many, many more.

More on Pershing Square and Bill Ackman:
- Pershing Square's 3rd qtr '08 investor letter
- Bill Ackman's recent interview with Charlie Rose
- Pershing Square's Bill Ackman speaks at Value Investing Congress
- Recent update on Pershing Square

Jim Rogers Dislikes Bonds, George Soros Doesn't Rule Out Depression

Our old Quantum Fund buddies are up to no good again, chiming in wherever the media outlets can pick them up. Recently, Jim Rogers was out saying that he thinks bonds will be a terrible investment for the next 10 or 20 years. Additionally, George Soros, in his Congressional testimony, said we are in a deep recession, and would not rule out the possibility of a depression.

Bill Ackman's (Pershing Square) Recent Interview With Charlie Rose

Great commentary from Bill Ackman of Pershing Square Capital Management from a recent Charlie Rose interview. Hat tip to Earnings Breakout for finding it. (Note: Email readers will have to come to the blog to view the embedded video).

Bill Ackman's Pershing Square Investor Letter (3rd Quarter 2008)

Full credit to Todd Sullivan at Value Plays for digging this gem up. Here's Pershing Square's 3rd quarter '08 investor letter, as written by Bill Ackman.

Pershing Square Q3 2008 Investor Letter

Get your own at Scribd or explore others: Business pershing square capi william ackman

(Note: Email readers you will probably have to come to the blog to read the embedded letter)

Hedge Fund Tracking: Peter Thiel's Clarium Capital - 13F Filing 3rd Quarter 2008

(Note: Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here).

This is the 3rd Quarter 2008 edition of our ongoing hedge fund tracking series. We'll be bringing you the long side of the portfolios of numerous prominent hedge funds. Hedge funds we track here at MarketFolly.com include: Tudor Investment Corp, Maverick Capital, Greenlight Capital, Blue Ridge Capital, Moore Capital Management, Lone Pine Capital, and literally many, many more. We're aiming to cover 35 or so prominent funds this time around and we'll be releasing the 13f analysis here in the coming weeks on each individual fund. We've already covered Whitney Tilson's T2 Partners here.

The second fund in the 3rd quarter edition of our 2008 hedge fund tracking series is Clarium Capital Management, LLC. Clarium is a $6 billion global macro hedge fund run by Peter Thiel, the co-founder of PayPal. 2008 has been a roller coaster year for Thiel and company. Earlier in the year, they were up over 45%. But, as market volatility increased, they began to give back their gains and now find themselves -2.8% for the year. This was in part due to a rough October, in which they were down 18% for the month, in part due to their recent shift into equities. Assets under management had recently ballooned to the highest amount in Clarium's history and it will be interesting to see how effective Clarium will be at deploying this new capital going forward. Thiel's fund employs a slightly different management fee structure than most of the hedge fund world. Typical funds charge a flat 2% management fee and then a 20% performance fee. Clarium, on the other hand, does not charge a management fee, but charges a 25% performance fee. They obviously have more incentive to perform well, to ensure they get paid. Before reading this quarter's update, you might be interested in reading our coverage of Clarium's 2nd quarter portfolio holdings. And, to those who want a little more background on Thiel & his investment style, we first wrote about him here.

So, now that we've got a background on Thiel and Clarium, let's take a quick look at his portfolio highlights. Keep in mind that this is merely a brief summary of Clarium's top holdings. Due to the time sensitive nature of the 13F material, we wanted to get this information posted as soon as possible. The following were Clarium's holdings as of September 30th, 2008 as filed with the SEC.

New Positions (Brand new positions that Clarium initiated in the last quarter):
PIMCO Municipal Income Fund (PMF)
Oracle (ORCL)
PIMCO Floating Rate Strategy Fund (PFN)
Iron Mountain Incorporated (IRM)
Consolidated Edison (ED)
Kimberly-Clark Corporation (KMB)
T-3 Energy Services (TTES)
Natus Medical (BABY)
National Municipal Bond Fund (MUB)
United States Oil Fund (USO)
ishares Brazil ETF (EWZ)
Interval Leisure Group (IILG)
Exxon Mobil (XOM)
Mastercard (MA)
United States Natural Gas Fund (UNG)
Microsoft (MSFT)
Yahoo (YHOO)
Google (GOOG)
Financial Select Sector ETF (XLF)

Removed Positions (Positions Clarium sold out of completely last quarter):
Cabot Oil & Gas (COG)
Petroleo Brasileiro (PBR)
Honeywell (HON)
ITT Corporation (ITT)
Aircastle Limited (AYR)
Frontier Oil (FTO)
Marathon Oil (MRO)
ONEOK (OKE)
Royal Caribbean (RCL)
Berkshire Hathaway (BRK.B)
Foster Wheeler (FWLT)
Nucor (NUE)
Pinnacle Airlines (PNCL)
Sothebys (BID)
Black & Decker (BDK)

Top 20 Holdings (based on % of portfolio):

1. Financial Select Sector ETF (XLF): 38.5% of portfolio
   
2. Google (GOOG): 28.8% of portfolio
3. Yahoo (YHOO): 28.7% of portfolio
4. Hewlett Packard (HPQ): 0.4% of portfolio
5. Microsoft (MSFT): 0.3% of portfolio
6. McDonalds (MCD): 0.3% of portfolio
7. Procter & Gamble (PG): 0.3% of portfolio
8. Burlington Northern (BNI): 0.27% of portfolio
9. Philip Morris International (PM): 0.27% of portfolio
10. United States Natural Gas Fund (UNG): 0.1% of portfolio
11. Mastercard (MA): 0.1% of portfolio
12. Conoco Philips (COP): 0.1% of portfolio
13. Fairfax Financial (FFH): 0.1% of portfolio
14. Occidental Petroleum (OXY): 0.1% of portfolio
15. Exxon Mobil (XOM): 0.1% of portfolio
16. Schering Plough (SGP)
17. Altria (MO)
18. Interval Leisure Group (IILG)
19. Canadian Superior Energy (SNG)
20. NRG Energy (NRG)
    

First, we need to cover the odd construction of Clarium's portfolio, which may be puzzling some of you reading. Clarium employs a global macro strategy and therefore invests across multiple markets (commodities, currencies, debt, bonds, global markets, etc). And, due to the fact that SEC 13F filings only require equity holdings to be disclosed, we only get to see a small slice of their overall portfolio. We track Clarium's equity holdings simply because Thiel is very intelligent and they could enter equity markets at any moment. For instance, in our 2nd quarter analysis of Clarium's holdings, we noted that they only had $93 million invested in equities as detailed in the filing. And, considering they had over $6 billion AUM (assets under management) at the time, the equities detailed in the filing were miniscule positions compared to their overall fund size. But, as we recently noted, Clarium shifted to equities in late September. And thus, we see part of this reflected in the current 13F filing. In the 2nd quarter, they had $93 million invested in equities. But, this time around (3rd quarter), they had over $2.8 billion invested in equities.

This drastic jump in capital allocated to long positioned equities also helps to describe their lopsided portfolio. Keep in mind they also probably had equity short positions as well, which we cannot see. As you'll notice in the top 20 holdings listed above, the top 3 holdings make up a vast percentage (%) of the portfolio relative to their other positions. Those positions included: Financial select sector ETF (XLF), Google (GOOG), and Yahoo (YHOO). Clarium definitely felt that the financials and specific tech names were vastly beaten down and due for a correction. The rest of the positions are small relative to their overall equity exposure at only 0.1%-0.3% of the equity portfolio. These smaller positions reflect the minimal equity exposure Clarium had in the quarter prior, where they were hardly invested in equities.

We will have to wait until next quarter to see whether or not Thiel was building up core positions in Google (GOOG) and Yahoo (YHOO), or simply trading them. We have a feeling though, that these position sizes will be reduced in size come next quarter. After all, they are a global macro fund and they will quickly allocate their money to the markets and positions they feel are poised to benefit. But, that is merely speculation on our part.

Keep in mind that we have not detailed every tiny maneuver they have made with their portfolio. In some of their holdings they added shares, and with others they sold some shares. We are essentially capturing the major moves Clarium has made over the past quarter with regards to their portfolio.

This is the second hedge fund we're covering in our 3rd quarter 2008 edition of our series of tracking 35+ prominent hedge funds. We've already covered Whitney Tilson's T2 Partners here. Stay tuned this week and next week as we detail the portfolio holdings of more funds. Overall, its been one of the worst years ever for hedge funds, as we noted in our recent October hedge fund performance update. Thus, the recent moves they've made in their portfolios become all the more interesting given the way the market has played out. Here are some funds we will be tracking to look forward to: David Einhorn's Greenlight Capital, Lee Ainslie's Maverick Capital, Paul Tudor Jones' Tudor Investment Corp, Louis Bacon's Moore Capital Management, and many, many more.

More on Clarium Capital & Peter Thiel:

- Overall hedge fund performance numbers update: October 2008
- Clarium's October 2008 performance update
- Thiel & Clarium Shift to Equities
- Clarium's August 2008 performance update
- Clarium's 2nd quarter 2008 portfolio holdings/analysis
- More on Peter Thiel

Julian Robertson Interview (Hedge Fund legend, Tiger Management founder)

Julian Robertson, founder of legendary hedge fund Tiger Management, recently sat down on Bloomberg to discuss some of his recent buys that we covered here. In the interview, he talks about the markets in general, as well as his specific picks of Google (GOOG), Baidu (BIDU), Mastercard (MA), and Visa (V). Don't let his long picks fool you though. He mentions in the interview that he is pretty short overall at the moment. Those longs are just a glimmering light of hope to complement/hedge his pessimism. Also, if you missed it, we posted about a hedge fund panel that took place recently which included the likes of Robertson and numerous of his 'Tiger Cub' prodigies. (Note: Email readers will have to come to the blog to view the embedded video).

Video of Hedge Fund Managers' Testimony

If you missed it, we recently wrote about numerous prominent hedge fund managers going before Congress to give their testimony regarding hedge funds and the current market. Here are some of their testimonies via video, courtesy of the NYT.

• George Soros' Testimony (Soros Fund Management)
  
• Ken Griffin's Testimony (Citadel)
• James Simons (Renaissance Technologies)
• John Paulson (Paulson & Co)