Charles Anderson's Hedge Fund Fox Point Capital: Portfolio Update (13F Filing)

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

Next up is Charles Anderson's hedge fund Fox Point Capital. Prior to founding Fox Point, Anderson worked at John Griffin's Blue Ridge and before that at Julian Robertson's Tiger Management. As such, he joins the ranks of other prominent 'Tiger Cub' hedge funds and Anderson received help and funding from Robertson to launch. Anderson received his degree from the University of North Carolina at Chapel Hill (rough basketball season for them this year, ouch!) and his MBA from Stanford. The strategy is simple: go long good companies at fair valuations and short poor businesses trading at higher multiples. This is the first time we've detailed Fox Point's portfolio and we look forward to seeing what they've been up to. The positions listed below were Fox Point's long equity, note, and options holdings as of December 31st, 2009 as filed with the SEC. All holdings are common stock unless otherwise denoted.


Brand New Positions
Ebay (EBAY)
Wellpoint (WLP)
H&R Block (HRB)
Intercontinental Exchange (ICE)
Virgin Media (VMED)
Amazon (AMZN)
Deckers (DECK)
Cigna (CI)
Monsanto (MON)
Warnaco (WRC)
Mastercard (MA)
JPMorgan Chase (JPM)
Black & Decker (BDK)
iShares Russell 2000 (IWM) Puts
Lender Processing (LPS)
Snap-On (SNA)
J Crew (JCG)
NVR (NVR)
Healthnet (HNT)


Increased Positions
IAC Interactive (IACI): Increased position by 120%
Verisign (VRSN): Increased by 60%
Mattel (MTL): Increased by 60%
Apple (AAPL): Increased by 40%
Allergan (AGN): Increased by 20%
ROVI (ROVI): Increased by 14%


Reduced Positions
Altria Group (MO): Reduced position by 40%
iShares China ETF (FXI) Puts: Reduced by 38.5%


Removed Positions (Sold out completely):
Cisco (CSCO)
Pfizer (PFE)
Heinz (HNZ)
Vistaprint (VPRT)
Amgen (AMGN)
Pepsico (PEP)
Sara Lee (SLE)
AT&T (T)
Itau Unibanco (ITUB)
Skyworks (SWKS)
Apollo Group (APOL)
Medassets (MDAS)
Priceline.com (PCLN)
Credicorp (BAP)
Starent Networks (STAR)
Dollar Tree (DLTR)
Mckesson (MCK)


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

1. iShares FTSE/Xinhua China 25 Index ETF (FXI) Puts 13.77%
   
2. Rovi (ROVI): 7.40%
   
3. Ebay (EBAY): 7.29%
   
4. DirecTV (DTV): 6.79%
   
5. Apple (AAPL): 6.01%
   
6. Wellpoint (WLP): 5.94%
   
7. H&R Block (HRB): 5.53%
   
8. Verisign (VRSN): 4.74%
   
9. IAC Interactive (IACI): 3.67%
   
10. Intercontinental Exchange (ICE): 3.29%
    
11. Virgin Media (VMED): 3.29%
    
12. Mattel (MAT): 3.26%
    
13. Allergan (AGN): 3.08%
    
14. Amazon (AMZN): 2.74%
    
15. Altria Group (MO): 2.40%
    

One of the main things you'll notice about hedge fund Fox Point's portfolio is how different it is from typical Tiger Cub portfolios. Rather than finding popular 'groupthink' type hedge fund favorite stocks, they seem to take a slightly different path. Fox Point's top position is either a bearish bet on or hedge against China as they own puts on the popular Chinese index exchange traded fund. While it's still their largest disclosed position, they did reduce their holdings by 38% last quarter. Rovi (ROVI) is interesting because this is the first time we've seen this name pop-up in a hedgie's portfolio.

They unloaded shares of hedge fund favorites Cisco, Pfizer, and Pepsico. Additionally, they completely exited their Priceline.com position, one we've previously seen Tiger Cubs fond of but recently saw Stephen Mandel's Lone Pine sell out of as well. Lastly, the debate regarding for-profit education plays wages on. Fox Point exited their Apollo Group stake and David Stemerman's Conatus Capital recently exited as well. On the other hand, Chase Coleman's Tiger Global recently started a large APOL stake. So, choose your side on this one. Overall, Anderson's hedge fund was doing the majority of their maneuvering via brand new stakes and completely selling out of old positions.

Data used for this article comes from Alphaclone, our source for backtesting strategies and sorting through all the hedge fund portfolio maneuvers with ease. Assets reported on the 13F filing were $613 million this quarter compared to $697 million last quarter. Remember that these filings are not representative of the hedge fund's entire base of AUM.

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

Philippe Laffont's Coatue Management Focused On Technology: 13F Filing

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

Next up is Philippe Laffont's hedge fund Coatue Management. The fund was founded in 1999 and specifically focuses on technology, media and telecom. Coatue employs a typical long/short strategy and like to avoid big directional bets. Interestingly, one of Laffont's mantras is to "dare to be different." This means that he likes to focus on stocks not necessarily right in the spotlight. Laffont focuses on technology specifically and reportedly Coatue were some of the first to get their hands on an iPhone when it was launched. For more thoughts on the sector from Coatue, check out excerpts from their technology trends presentation. Laffont had previously worked for Julian Robertson's Tiger Management and as such is classified as a 'Tiger Cub' hedge fund. As such, the fund is part of the Tiger Cub portfolio that was created with Alphaclone and replicates a basket of stocks handpicked by these hedge fund managers.

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


Brand New Positions
Crown Castle (CCI)
American Tower (AMT)
Qualcomm (QCOM)
SBA Communications (SBAC)
Palm (PALM)
MGM Mirage (MGM)
Popular (BPOP)
Amazon (AMZN)
Brocade (BRCD)
Amedisys (AMED)
Barnes & Noble (BKS)
Applied Materials (AMAT)
Emulex (ELX)
Fortinet (FTNT)


Increased Positions
F5 Networks (FFIV): Increased by 130%
Yahoo (YHOO): Increased by 51%
Synaptics (SYNA): Increased by 46.5%
Google (GOOG): Increased by 42.3%
Equinix (EQIX): Increased by 34.9%


Reduced Positions
E*Trade (ETFC): Reduced by 11.3% ~ we detailed their initial position back in August of 2009


Removed Positions (Sold out completely):
Research in Motion (RIMM)
Baidu (BIDU)
Sohu (SOHU)
Netease (NTES)
Taiwan Semiconductor (TSM)
Eastman Kodak (EK)
Bankrate (RATE)
Level 3 Communications (LVLT)
Synopsys (SNPS)
Microsemi (MSCC)
Netflix (NFLX)
Garmin (GRMN)
Nutrisystem (NTRI)
Silicon Motion (SIMO)
Sandisk (SNDK)
Novatel (NVTL)
Travelzoo (TZOO)
Gannett (GCI)
Utstarcom (UTSI)


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

1. Apple (AAPL): 17.27%
   
2. Google (GOOG): 10.01%
   
3. Equinix (EQIX): 8.85%
   
4. F5 Networks (FFIV): 8.55%
   
5. E*Trade Financial (ETFC): 6.20%
   
6. Citrix Systems (CTXS): 6.12%
   
7. Crown Castle (CCI): 5.93%
   
8. TD Ameritrade (AMTD): 5.16%
   
9. Visa (V): 4.1%
   
10. American Tower (AMT): 3.63%
    
11. Yahoo (YHOO): 3.16%
    
12. Qualcomm (QCOM): 2.47%
    
13. SBA Communications (SBAC): 2.41%
    
14. Palm (PALM): 2.19%
    
15. Synaptics (SYNA): 2.01%
    

As you can see, Coatue Management is definitely focused on technology. Hedgie favorites Apple and Google dominate the bulk of the reported long US equity positions in their portfolio. Not far behind though is Equinix (EQIX), another play we're starting to see more managers add and we already know Shumway Capital Partners has a large EQIX stake too. Additionally, the tower stocks theme is heavy here as Coatue owns all three majors: CCI, AMT, and SBAC. Not to mention, they just started these brand new stakes all this past quarter. This is a bit different as we've seen many other hedgies favor one tower stock over the other. John Griffin's Blue Ridge, for instance, favors CCI. Coatue has exposure to all three though.

Another thing we noticed was their exposure to the brokerages through a large position in E*Trade Financial and a slightly smaller one in TD Ameritrade. Price wars in the online brokerage industry are heating up and many see ETFC as a takeover target. In terms of positions they sold completely out of, Coatue dumped RIMM, BIDU, and SOHU, all which were previously quite large positions for them. They didn't alter their previously owned positions too much. The vast majority of their maneuvers were made via purchasing brand new positions or completely dumping others.

Given all the negativity surrounding shares of Yahoo (YHOO), it was also intriguing to see them add to their stake. Some argue this is now a value play, while others argue the company is quickly being left behind the rest of the tech pack. Clearly Coatue sees some sort of value here and this fits Laffont's road-less-traveled mantra. Overall, if you're looking for good bets on the technology sector, you've certainly come to the right place. Not to mention, many of their holdings are among the top stocks held by hedge funds.

Data used for this article comes from Alphaclone, our source for backtesting strategies and sorting through all the hedge fund portfolio maneuvers with ease. Assets reported on the 13F filing were $2.0 billion this quarter compared to $2.2 billion last quarter, a slight decrease in exposure. Remember that these filings are not representative of the hedge fund's entire base of AUM.

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

PIMCO's Bill Gross On Corporate Versus Sovereign Bonds: March Commentary

Bill Gross is out with his latest commentary from PIMCO. In his March 2010 investment outlook entitled 'Don't Care', Gross focuses on the lack of global aggregate demand and how we got into this whole situation. The first part of his commentary doesn't really focus on markets, but rather on social situations. It is still comical (and shockingly somewhat true) and eventually ties into his market discussion, providing a decent analogy. Previously, we've also posted Gross' previous outlook as well as his thoughts on why the market is up so much from the lows.

Given Gross' natural focus on all things fixed income, he comments on how sovereign bonds have been hit hard and as of late have even been surrounded with more negativity than corporate debt. With the recent wave of default concern, it's intriguing that the roles of these types of bonds have flipped. Previously, sovereign bonds were considered safer than corporates. Nowadays, investors are re-considering and some corporates now look safer than some sovereigns. In terms of recommendations, he likes strong sovereign bonds including Germany and Canada.

Gross writes,

"It is interesting to observe that over the past few months when investors have begun to question the ability of governments to exit the debt crisis by “creating more debt,” that increases in bond market yields have been confined almost exclusively to Treasury/Gilt-type securities, and long maturities at that. There has even been a developing debate in the press (and here at PIMCO) as to whether a highly-rated corporation could ever consistently trade at lower yields compared to its home country’s debt. I suspect not, but the narrowing in spreads since late November solicits an interesting proposition: Government bailouts and guarantees such as those evidenced and envisioned in Dubai and Greece, as well as those for the last 18 months with banks and large industrial corporations across the globe, suggest a more homogeneous “unicredit” type of bond market. If core sovereigns such as the U.S., Germany, U.K., and Japan “absorb” more and more credit risk, then the credit spreads and yields of these sovereigns should look more and more like the markets that they guarantee. The Kings, in other words, in the process of increasingly shedding their clothes, begin to look more and more like their subjects. Kings and serfs begin to share the same castle.

This metaphor doesn’t really answer the critical question of whether a debt crisis can be cured by issuing more debt. The answer remains: It depends – on initial debt levels and whether or not private economies can be reinvigorated. But it does suggest the likely direction of sovereign yields IF global policymakers are successful with their rescue efforts: Sovereign yields will narrow in spreads compared to other high-quality alternatives. In other words, sovereign yields will become more credit like. When sovereign issues become more credit-like, as evidenced in Greece, Spain, Portugal, and a host of others, they move closer in yield to the corporate and Agency debt that supposedly rank lower in the hierarchy. That process of course can be accomplished in two ways: high-quality non-sovereigns move down to lower levels or governments move up. The answer to which one depends significantly on future inflation, the aftermath of quantitative easing programs, and the vigor of the private economy going forward. But the contamination of sovereign credit space with past and future bailouts is a leveler, a homogenizer, a negative for those sovereigns that fail to exert necessary discipline. Only if global economies stumble and revisit the recessionary depths of a year ago should the process reverse direction and place Treasuries, Gilts, et al. back in the driver’s seat."


To read the rest of Bill Gross' commentary, directly download it via .pdf here.

For more investment insight from market gurus, check out Warren Buffett's annual letter as well as Eddie Lampert's annual letter. Additionally, make sure to check out our past coverage of a ton of very insightful commentary from hedge funds.

Soros Fund Management's Portfolio: Adds Citigroup & Monsanto, Dumps Potash (13F Filing)

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

Next up is hedge fund Soros Fund Management. While many will automatically attribute this fund to George Soros, much of the credit also goes to his son Robert Soros who runs the flagship Quantum Endowment Fund. But for those of you wanting an inside look at George Soros' portfolio, look no further. We follow Soros' portfolio movements due to his macro sense and solid track record. We like to see what sectors he is flocking to and these filings are the perfect example of possible themes his firm might be seeing. Soros Fund Management is a true global macro player as they dabble in pretty much any asset class they desire, so just keep that in mind as the below only details their equity and options holdings.

In the past Soros has said one of his main concerns is the deleveraging of the US consumer over a longer period of time which will hurt consumer spending and thus growth going forward. More of Soros' thoughts on the financial markets are detailed in his latest book, The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means.

For 2009, Soros' Quantum Endowment Fund was up 28% as noted in our hedge fund performance numbers list. In the past we've also detailed some of their recent portfolio maneuvers. The positions listed below were their long equity, note, and options holdings as of December 31st, 2009 as filed with the SEC. All holdings are common stock unless otherwise denoted.


Brand New Positions
Citigroup (C)
DirecTV (DTV)
Select Sector Financials (XLF)
Calls Bunge (BG)
Kinross Gold (KGC)
Autonation (AN)
The rest of their new holdings were less than 0.5% of reported assets each:
Dollar General (DG), Heinz (HNZ), Orbital Sciences Bonds, Shanda Games (GAME), Hasbro (HAS), CTrip (CTRP), RailAmerica (RA), Sandridge Energy (SD), Energy XXI (EXXI), CVR Energy (CVI), Sina (SINA), Transatlantic (TAT), American Axle (AXL), & China Real Estate Information (CRIC)


Increased Positions
Select Sector Financials (XLF): Increased by 63,730% (no, not a typo)
Pfizer (PFE): Increased by 365%
Monsanto (MON): Increased by 244.4%
Suncor (SU): Increased by 171%
SPDR Gold Trust (GLD): Increased by 152%
Emdeon (EM): Increased by 54.6%
Plains Exploration (PXP): Increased by 14%
Hess (HES): Increased by 11.2%


Reduced Positions
Linear Technology Bonds: Reduced by 8%


Removed Positions (Sold out completely):
Potash (POT)
Goldman Sachs (GS) Puts
Audiocodes Notes
S&P 500 (SPY)
Wyeth (WYE) ~ merger transaction complete
iShares Emerging Markets (EEM) Puts
Applied Materials (AMAT)

The rest of the stakes they dumped were quite small, each less than 0.5% of the previously reported assets: Petrohawk (HK), Focus Media (FMCN), SPSS Bonds, RPM (RPM), Liberty Media (LMDIA), Conexant Systems Bonds, Renesola (SOL), MSC Software (MSCS), Navistar (NAV), Covanta (CVA) Calls, S&P 500 (SPY) Puts, & Anadarko Petroleum (APC) Calls


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

1. SPDR Gold Trust (GLD): 7.5%
   
2. Petroleo Brasileiro (PBR): 4.2%
   
3. Hess (HES): 3.9%
   
4. Monsanto (MON): 3.6%
   
5. Citigroup (C): 3.5%
   
6. LSI Bonds: 2.88%
   
7. Suncor (SU): 2.86%
   
8. Petroleo Brasileiro (PBR-A): 2.82%
   
9. Interoil (IOC): 2.42%
   
10. Linear Technology Bonds: 2.4%
    
11. Pfizer (PFE): 2.4%
    
12. Plains Exploration (PXP): 2.18%
    
13. RF Micro Bonds: 2.1%
    
14. Select Sector Financials (XLF): 1.95%
    
15. Mcdata Notes: 1.94%
    

Much has been made in the media recently about the fact that George Soros has been out calling gold a bubble but has more than doubled his exposure to the gold exchange traded fund GLD. First, keep in mind that these portfolio disclosures were as of December 31st, 2009. So technically he could have sold completely out by now. It's also possible that they are merely using this position as a hedge of some sort. Also keep in mind that George is probably less involved with the day-to-day operations of the hedge fund these days as his son Robert is more responsible for running the show at Quantum. So, take that position with a grain of salt considering George Soros' recent comments. And for those of you tracking the precious metal's every move, check out this interesting technical analysis video on gold.

Of the positions they sold, the most notable is definitely Potash (POT). They completely exited their stake and it was previously one of their largest positions. They also exited LMDIA but keep in mind that they received new shares in DTV as a result of the merger transaction. Soros Fund Management continues to hold a large stake in Petroleo Brasileiro as they own both share classes. And while Soros sold off POT, they massively added to MON, another agricultural giant. Like many other hedge funds we've seen, Soros also added shares of Citigroup (C) in the fourth quarter. Soros also significantly boosted their stake in Pfizer, a stock we recently saw that was one of the top hedge fund holdings.

Overall though, some intriguing portfolio changes. To learn how to invest like George Soros, we recommend checking out his first book, The Alchemy of Finance. Data used for this article comes from Alphaclone, our source for backtesting strategies and sorting through all the hedge fund portfolio maneuvers with ease. Assets reported on the 13F filing were $8.8 billion this quarter compared to $6.2 billion last quarter, over a 40% increase in exposure. Remember that these filings are not representative of the hedge fund's entire base of AUM.

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

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

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

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

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


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


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


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


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


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

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

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

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

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

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

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

Steven Cohen's Hedge Fund SAC Capital Updates Positions

We have a few portfolio updates out of Steven Cohen's hedge fund firm SAC Capital to update you on. But first, please keep in mind that SAC is primarily a trading fund and they move in and out of positions much faster than the funds we typically cover here on Market Folly. While these 13G filings typically signify a much larger position, you still need to take things with a grain of salt here as Cohen's firm by no means fits the normal long-term investment focus of the hedgies we like to track. That said, you can see below for the changes and also take note our previous post on SAC portfolio updates.

Firstly, they filed a 13G on shares of Medifast (MED) and now show a 6.4% ownership stake with 986,774 shares. This is a brand new position for them as they did not own it on their 13F filing which discloses positions as of December 31st, 2009. Secondly, a few weeks ago they also filed a 13G on shares of Skechers (SKX), showing a 5.3% ownership stake with 1,787,645 shares. This is a massive increase as they've added over 1.2 million more shares in this name since September of 2009. So, there you have it. Since Steven Cohen is so secretive and readers often want to hear what SAC Capital is up to, we thought we would oblige. SAC Capital finished 2009 up over 28% as noted in our post on hedge fund 2009 performance numbers.

Taken from Google Finance, Medifast is "engaged in the production, distribution, and sale of weight management and disease management products and other consumable health and diet products. The Company’s product lines include weight and disease management, meal replacement, and vitamins primarily manufactured in its modern, the United States Food and Drug Administration (FDA) approved facility in Owings Mills, Maryland."

Skechers is "designs and markets Skechers-branded contemporary footwear for men, women and children under several lines. In addition to Skechers-branded lines, the Company also offers eight uniquely branded designer, fashion and street-focused footwear lines for men, women and children."

John Burbank's Passport Capital Hedges With ETFs, Options: 13F Filing

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

Next up is John Burbank's hedge fund firm Passport Capital. Burbank founded the San Francisco hedge fund in 2000 and they use sector specific and macroeconomic analysis to select their investments. Once they have identified potential themes, they'll drill down to find specific companies that can benefit.

Burbank has over a decade of experience in markets having previously worked as a consultant and as a director of research at ValueVest Management. His educational background includes an undergraduate degree from Duke University and an MBA from Stanford University. Passport previously had a track record of gaining 27% annually, but like many other funds had a rough 2008.

Previously, we've detailed a lot of investment resources out of Passport including:

- Passport's rationale for owning physical gold
- Passport's recent Agriculture Fund investor letter
- The hedge fund's case for agriculture

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


Brand New Positions
iShares S&P 500 (SPY) Puts
iShares Emerging Markets (EEM) Puts
CF Industries (CF) Calls
US Steel (X) Calls
Dr Pepper Snapple (DPS) Calls
Barrick Gold (ABX)
CVS Caremark (CVS)
Materials (XLB) Puts
Terex (TEX) Calls
Barrick Gold (ABX) Calls
UnitedHealth (UNH)
Illumina (ILMN)
Ultrashort Crude Oil (SCO)
News Corp (NWSA)
Boston Scientific (BSX)
Small Cap Bear 3x (TZA)

All the rest of their new positions were each less than 0.5% of reported assets: Ensco (ESV), Tesoro (TSO) Puts, Knight Capital (NITE), Rowan (RDC), Nuvasive (NUVA), CF Industries (CF), Medtronic (MDT), Dollar Tree (DLTR), Knight Capital Group (NITE) Calls, Mosaic (MOS) Calls, National Oilwell Varco (NOV), & Omnivision (OVTI)


Increased Positions
Proshares Ultrashort Real Estate (SRS): Increased by 23,451% (was previously a tiny position)
Perfect World (PWRD): Increased by 971%
iShares S&P 100 (OEF) Puts: Increased by 356%
Onyx Pharma (ONXX) Calls: Increased by 100%
Janus Capital (JNS) Puts: Increased by 100%
US Steel (X): Increased by 78.9%
Discover Financial (DFS) Puts: Increased by 20%
Dr Pepper Snapple (DPS): Increased by 17%


Reduced Positions
Wendys Arbys (WEN): Reduced by 47.4%
Mckesson (MCK): Reduced by 5.23%
Teva Pharma (TEVA): Reduced by 2.3%


Removed Positions (Sold out completely):
Materials (XLB) Puts
PNC Financial (PNC) Puts
Wells Fargo (WFC) Puts
Covidien (COV)
Cephalon (CEPH)
Pfizer (PFE)
Las Vegas Sands (LVS) Calls
Golar LNG (GLNG)
Onyx Pharma (ONXX)
Myriad Genetics (MYGN)
Gilead Sciences (GILD)
Wright Medical (WMGI)
Amag Pharma (AMAG)

The rest of their sold positions were each less than 0.5% of their reported assets: Stryker (SYK), Starent Networks (STAR), Activision Blizzard (ATVI), Momenta (MNTA), Petrohawk (HK), Beazer Homes (BZH), Aeropostale (ARO), Hovnanian (HOV), Sanderson Farms (SAFM), BRF Brasil Foods (PDA), Pride (PDE), Impax Lab (IPXL), Weatherford International (WFT), EHouse (EJ), CKE Restaurants (CKR), & Ship Finc (SFL)


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

1. SPDR S&P 500 (SPY) Puts: 15.79%
   
2. iShares S&P 100 (OEF) Puts: 14.4%
3. iShares Emerging Markets (EEM) Puts: 12.23%
   
4. CF Industries (CF) Calls: 8.21%
   
5. US Steel (X) Calls: 5.77%
   
6. Dr Pepper Snapple (DPS): 4.58%
   
7. Onyx Pharma (ONXX) Calls: 2.64%
   
8. US Steel (X): 2.64%
   
9. Dr Pepper Snapple (DPS) Calls: 2.55%
   
10. Barrick Gold (ABX): 1.85%
    
11. Perfect World (PWRD): 1.62%
    
12. Mckesson (MCK): 1.46%
    
13. AK Steel (AKS): 1.29%
    
14. Wendys Arbys (WEN): 1.16%
    
15. CVS Caremark (CVS): 1.15%
    

It appears that John Burbank's hedge fund Passport Capital utilizes exchange traded funds (ETFs) and options for hedging purposes as their top three holdings are all put positions on indexes. This falls directly in line with Goldman Sachs' recent research where they found hedge funds mainly use ETFs as a hedging tool. Additionally, you'll note that they use options to express a lot of their position views as well. Their largest actual equity position is in Dr. Pepper Snapple (DPS) and they additionally own calls on the name as well.

Assets reported on the 13F filing were $2.2 billion this quarter compared to $1.2 billion last quarter, over a 70% increase in exposure which is nothing to sneeze at. (Remember that these filings are not representative of the hedge fund's entire base of AUM). So, the vast majority of their portfolio activity was via completely selling out of some names and starting brand new positions in equities and options.

Passport is definitely focused on the global growth and natural resources themes with positions in steel companies, agriculture plays, and gold plays. Keep in mind that Passport also has many commodities positions that won't show up on the 13F filing, including a large physical gold position. (They've previously outlined their rationale for owning physical gold). Overall, we track Passport to see which sectors they are flocking to and what kind of exposure they have.

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

Thomas Steyer's Farallon Capital Focused On Risk Arbitrage: 13F Filing

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

Next up is Thomas Steyer's hedge fund Farallon Capital. Steyer founded Farallon in 1986 and today it is a multi-billion dollar hedge fund that invests in equities, private investments, debt, and real estate. Typically though, they're focused on risk arbitrage strategies and you'll find a lot of evidence of this in their portfolio below. In terms of other recent activity, we saw that Farallon disclosed their large position in FreightCar America (RAIL) and have been selling shares of Knology (KNOL).

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


Brand New Positions
Sun Microsystems (JAVA) ~ inactive
Affiliated Comp Services (ACS) ~ inactive
Home Depot (HD) ~ inactive
Wells Fargo (WFC)
XTO Energy (XTO)
Dollar General (DG)
Encore Acquisition (EAC)
Sherwin Williams (SHW)
Verisk Analytics (VRSK)
Covidien (COV)
Energy Partners (EPL) ~ this was a result of a debt to equity conversion
Expedia (EXPE) Puts
Delta Airlines (DAL)


Increased Positions
Charles Schwab (SCHW): Increased by 309%
Beacon Roofing (BECN): Increased by 167% ~ we also detailed this increase
Burlington Northern (BNI): Increased by 137% ~ now inactive after the Berkshire Hathaway purchase
Old Dominion (ODFL): Increased by 103%
BMC Software (BMC): Increased by 98%
China Housing & Land (CHLN): Increased by 88%
Crown Castle (CCI): Increased by 75.5%
Monsanto (MON): Increased by 62.5%
SBA Communications (SBAC): Increased by 44.8%
Oracle (ORCL): Increased by 43%
Jones Lang Lasalle (JLL): Increased by 33.5%
Express Scripts (ESRX): Increased by 30.8%


Reduced Positions
Visa (V): Reduced by 53.8%
MSCI (MXB): Reduced by 47%
Hurray Holdings (HRAY): Reduced by 43.5%
GeoEye (GEOY): Reduced by 33.2%
JB Hunt (JBHT): Reduced by 22.4%
Discovery Communications (DISCA): Reduced by 20.4%
Knology (KNOL): Reduced by 14.8% ~ we already knew of these sales


Removed Positions (Sold out completely):
Aetna (AET) Calls
Capitalsource (CSE)
Apollo Group (APOL)
iShares Russell 2000 (IWM) Puts
Focus Media (FMCN)
Mastercard (MA)
America Movil (AMX)
Rockwell Collins (COL)
Eastman Kodak Bonds
Priceline.com (PCLN)
Marvel Entertainment (MVL)
Google (GOOG)


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

1. Sun Microsystems (JAVA): 12.97%
   
2. Burlington Northern Santa Fe (BNI): 7.63%
   
3. Affiliated Comp Services (ACS): 6.99%
   
4. Visa (V): 3.88%
   
5. Home Depot (HD): 3.69%
   
6. Wells Fargo (WFC): 3.59%
   
7. XTO Energy (XTO): 3.50%
   
8. Oracle (ORCL): 3.41%
   
9. Jones Lang Lasalle (JLL): 3.08%
   
10. Crown Castle (CCI): 3.06%
    
11. Dollar General (DG): 2.85%
    
12. Charles Schwab (SCHW): 2.80%
    
13. BMC Software (BMC): 2.77%
    
14. Monsanto (MON): 2.40%
    
15. Yingli Green Energy Bonds: 2.40%
    

As you can see, a lot of Farallon's holdings were arbitrage related. Their top three holdings are no longer active stocks as they've all completed their merger processes: Sun Micro, Burlington Northern, and Affiliated Comp. A lot of their top holdings were also brand new holdings including Wells Fargo, Home Depot and Dollar General. This is directly in line with what we've seen out of hedge fund land lately. In fact, Wells Fargo was one of the most added stocks by hedge funds in the fourth quarter. Overall, Farallon reduced exposure to services and increased technology exposure.

Steyer's hedge fund firm completely sold out of a number of notable stakes (including Capitalsource which we previously detailed). They also dumped shares of Apollo Group (APOL) which is interesting as we've started to see hedge funds take divergent paths on this name. Some funds like Farallon have sold out, while others like Chase Coleman's Tiger Global have taken large stakes. Another interesting choice Steyer's hedge fund made was to sell completely out of Mastercard (MA) while still holding shares of Visa. Previously, hedgies had owned both of the payment processors. Nowadays it seems many funds are choosing one or the other. Farallon has chosen Visa, but note that they did sell some shares of V as well.

Data used for this article comes from Alphaclone, our source for backtesting strategies and sorting through all the hedge fund portfolio maneuvers with ease. Assets reported on the 13F filing were $2.0 billion this quarter compared to $1.4 billion last quarter. Remember that these filings are not representative of the hedge fund's entire base of AUM.

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

Warren Buffett & Berkshire Hathaway's Annual Letter

For those of you who haven't had a chance to read this yet (shame on you), here it is: Warren Buffett's annual letter and Berkshire Hathaway's annual report. For value investors and future Buffett wanna-be's, this is must-read material.

One very interesting thing to note about Buffett's letter is how he mentions that many of Berkshire's holdings heavily rely on consumer spending and housing demand. While Berkshire has obviously survived the crisis, those are areas many foresee a very slow recovery in. So, those companies will have to operate efficiently as they continue to face challenges. At the same time though, Buffett took advantage of the crisis to secure many solid deals and acted on his old adage of buying when others are fearful. He even expanded on this with an excellent new quote, saying "When it's raining gold, reach for a bucket, not a thimble."

Additionally, as we assumed when we reviewed Warren Buffett's portfolio, he confirmed that he sold positions to finance his impending acquisition of railroad Burlington Northern Santa Fe. And this purchase continues to signify a growing trend in Buffett's portfolio: he's investing in industries that have monopolies or near-monopolies.

Buffett's letter below gives his take on the economy, his investments, and various Berkshire components. Embedded below is the document:



You can directly download the .pdf here.

Of course a lot of criticism surrounding the letter is the lack of discussion regarding succession plans for when Buffett eventually steps down. This is a legitimate concern for investors and in the past we've posted up a great video that examines potential successor candidates at Berkshire. Many think Sokol will be the man for the job, but we'll have to wait and see.

So while his latest letter didn't provide any breakthrough new information, it's always good to hear his thoughts. For more great investment reads, head to Warren Buffett's recommended reading list.

Roberto Mignone's Bridger Management Bullish On Healthcare: 13F Filing

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

Next up is Roberto Mignone's hedge fund Bridger Management. They focus on both long/short and event driven strategies which you'll see evidence of in their portfolio below. Bridger has $2.8 billion in assets under management and is closed to new investors. Mignone likes to focus on investing rather than running a large organization. Not to mention, he argues that once you get 'too big' in AUM, you can't have a complementary short portfolio of necessary size. After all, Mignone is known for his sleuthing abilities on the short side of the book. Previously, we had detailed some of his investment thoughts for 2010 from a hedge fund panel.

Before Bridger, Mignone co-founded Blue Ridge Capital with John Griffin in 1996. And before that, Mignone (like Griffin) worked at Julian Robertson's Tiger Management, joining the ranks of other prominent 'Tiger Cub' hedge funds. Mignone received his degree from Harvard and his MBA from Harvard Business School.

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


Brand New Positions
Medtronic (MDT)
Pfizer (PFE)
Hyatt Hotels (H)
Amerigroup (AGP)
State Street (STT)
Rino (RINO)
Aetna (AET)
Boyd Gaming (BYD)
Teekay (TK)
Synovus Financial (SNV)
China Real Estate Information (CRIC)
Talecris Biotherapeutics (TLCR)
Mannkind (MNKD)
Regions Financial (RF)
The rest of their new positions were each less than 0.25% of reported holdings, so much smaller stakes:
Casella Waste Systems (CWST) ~ a new position we'd already detailed, Amylin Pharmaceuticals (AMLN) Puts, Crucell (CRXL), Enhealth (EHTH), Given Imaging (GIVN) & Sanderson Farms (SAFM)


Increased Positions
Cardinal Health (CAH): Increased by 150%
Warner Chilcott (WCRX): Increased by 120%
Las Vegas Sands (LVS): Increased by 111.5%
Amgen (AMGN): Increased by 109.7%
Pall (PLL): Increased by 92.3%
Electronic Arts (ERTS): Increased by 75%
Onyx Pharmaceuticals (ONXX): Increased by 66.4%
Cardiome Pharma (CRME): Increased by 51.9%
OSI Pharma (OSIP): Increased by 48.8%
Waste Connections (WCN): Increased by 41.7%
Gilead Sciences (GILD): Increased by 40%
Ebay (EBAY): Increased by 31.1%
Unitedhealth (UNH): Increased by 28.9%
Royal Carribean (RCL): Increased by 18.9%


Reduced Positions
Davita (DVA): Reduced by 84.6%
Expedia (EXPE): Reduced by 78.2%
Ritchie Bros (RBA): Reduced by 70.3%
Eclipsys (ECLP): Reduced by 58.8%
Allergan (AGN): Reduced by 14%


Removed Positions (Sold out completely):
Ameriprise Financial (AMP)
Wyeth (WYE)
International Game Technology (IGT)
Invesco (IVZ) Copart (CPRT)
Continental Airlines (CAL)
Watson Pharma (WPI)
MGM Mirage (MGM)
Schering Plough (SGP)
Cablevision (CVC)
Monsanto (MON)
Allegiant Travel (ALGT)
Cigna (CI)
Schering Plough (SGP-PB)
Amylin Pharma (AMLN) Calls
Airtran Holdings (AAI)
Illumina (ILMN)
American Express (AXP)
Brunswick (BC)
Trimeris (TRMS)


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

1. Covidien (COV): 3.76%
   
2. Medtronic (MDT): 3.41%
   
3. Amgen (AMGN): 3.35%
   
4. Pall Corp (PLL): 3.30%
   
5. Millipore (MIL): 3.30%
   
6. Waste Connections (WCN): 3.21%
   
7. Cardinal Health (CAH): 3.03%
   
8. Dr Pepper Snapple (DPS): 2.77%
   
9. Unitedhealth (UNH): 2.32%
   
10. Carmax (KMX): 2.21%
    
11. Pfizer (PFE): 2.2%
    
12. Royal Caribbean (RCL): 2.18%
    
13. Berkshire Hathaway (BRK.A): 2.17%
    
14. Apple (AAPL): 2.16%
    
15. First American (FAF): 2.11%
    

Hedge fund Bridger Management doesn't have any overwhelmingly massive positions as you can see. Overall, they boosted exposure to healthcare and reduced exposure to services and technology. This falls in line with Goldman Sachs' research that showed hedge funds reducing tech holdings. Mignone likes health plays as he says there is a huge margin of safety.

Mignone's hedge fund started a massive new stake in Medtronic (MDT) as it is their 2nd largest US equity long now. They also bought a new position in Pfizer (PFE), something we've seen many hedge funds do as of late. In terms of positions they already owned but added to, Bridger doubled down on their Amgen stake and almost doubled their position in Pall too. Both those positions are in their top five reported holdings as well. We also want to highlight that Bridger could be set for a big payday on shares of Millipore (MIL). The company has been exploring strategic takeover maneuvers and there were rumors they had received a bid from Thermo Fisher Scientific that sent shares soaring earlier this week. Hedge fund Blue Ridge Capital also has a sizable MIL stake.

The event driven portion of their portfolio is evident in their 'sales' of Wyeth and Schering Plough. They no longer show those positions because they completed their respective mergers. While they didn't do much selling with their core holdings, they did completely sell out of previously sizable positions in Ameriprise Financial, International Game Technology and Invesco. That wraps up all the major moves. For investment insight from Bridger's manager Roberto Mignone, check out his thoughts at a recent hedge fund panel.

Data used for this article comes from Alphaclone, our source for backtesting strategies and sorting through all the hedge fund portfolio maneuvers with ease. Assets reported on the 13F filing were $2.19 billion this quarter compared to $2.10 billion last quarter. Remember that these filings are not representative of the hedge fund's entire base of AUM.

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

Event Driven Is Most Sought After Hedge Fund Strategy (Monthly Industry Report)

Below you will find Credit Suisse's latest monthly report on the hedge fund industry. This report is a bit different than other documents we post here at Market Folly because it is more-so focused on the industry in general as it details sections on the investor's perspective, risk management, and various marketing strategies hedge funds are using. This report is unique in that it also has an operational look at things and should be useful for those in the alternative investment space.

An interesting fact: event-driven is now the most sought after hedge fund strategy by investors, displacing global macro. In terms of long/short funds, Credit Suisse found that for every $100 of equity, various l/s hedgies have long exposure of $125 and short exposure of $87. This falls in line with what we've seen previously regarding hedge fund exposure levels.

Embedded below is Credit Suisse's monthly hedge fund industry report:



You can directly download the .pdf here.

For more great research on the hedge fund industry, we highly recommend checking out Goldman Sachs' look at the top hedge fund long & short positions. Additionally, head to our post on how hedgies have their shortest position ever against the euro.

What We're Reading ~ 2/26/10

An analysis of Pepsi's acquisition of its bottlers (a popular hedge fund trade) from a new blog we recommend checking out [Merger Arbitrage Investing]

The many myths of Warren Buffett [Pragmatic Capitalist]

Explaining the secular shift towards bonds [Trader's Narrative]

Yield curve steepest in history: is the meaning different this time? [Mish's Global Economic Analysis]

How a Texas hedge fund manager made millions betting against Europe [WSJ ~ this article is behind a paywall unfortunately and if you don't have access here's a WSJ discount]

A primer on Credit Default Swaps (CDS) [Pragmatic Capitalist]

Ex-SAC Manager's new hedge fund soars: Ping [FINalternatives]

How to ride Seth Klarman's coattails [Mebane Faber for Forbes]

Hedge funds try career trade against the euro [WSJ] & we previously posted how hedgies have the shortest position ever against the euro

Ten Wall Street blogs you need to bookmark now [David Weidner]

Battered RAB Capital to auction prized funds [FT]

Shia LaBeouf talks about prepping for filming Wall Street 2 and how he traded [Youtube]

For the newbies: A beginner's trading terminology webinar [MarketClub]

Phil Falcone's Harbinger Capital Bets Big on Sprint Nextel (S): 13F Filing

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

Next up is Philip Falcone's hedge fund Harbinger Capital Partners. Falcone runs his $6 billion hedge fund with a focus both on distressed and equity plays and often takes concentrated positions in companies. And, that last reason is exactly why we track them. Even though we can't see their distressed plays (they aren't required to disclose them), we can track their equity plays that they have high conviction in. You aren't going to devote large portions of your portfolio to one company unless you truly believe in your thesis. After having a dismal 2008, Harbinger had a solid showing last year as they finished up 46.5% as we noted in our 2009 hedge fund performance numbers post.

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


Brand New Positions
Sprint (S)
Exco Resources (XCO)
Take Two Interactive (TTWO)
SPDR Gold Trust (GLD)
Corn Products (CPO)
US Airways (LCC)
Superior Well Services (SWSI)
Cloud Peak Energy (CLD)
Alpha Natural Resources (ANR)
iStar Financial (SFI)
Delta Petroleum Bond
The rest of the new stakes were each less than 0.25% of reported holdings: ICO Global (ICOG), MGIC Investment (MTG), & Strategic Hotels (BEE)


Increased Positions
Harry Winston Diamond (HWD): Increased by 587%
Walter Energy (WLT): Increased by 128.5%
Complete Production (CPX): Increased by 44.5%
Mercer International (MERC): Increased by 11.7% (we detailed their convertible bond exposure)


Reduced Positions
Interpublic Group (IPG): Reduced by 46.5%
Freeport McMoran (FCX): Reduced by 38.2%
Calpine (CPN): Reduced by 28.1%
Media Gen (MEG): Reduced by 18.1%


Removed Positions (Sold out completely):
McDermott (MDR)
Solutia (SOA) ~ we saw this coming with their previous repetitive sales
Zapata (ZAP)
Gentek (GETI)
USEC Bond International Coal (ICO)


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

1. Calpine (CPN): 18.47%
   
2. Sprint Nextel (S): 15.35%
   
3. New York Times (NYT): 12.71%
   
4. Walter Energy (WLT): 10.42%
   
5. Complete Production Services (CPX): 5.31%
   
6. Interpublic Group (IPG): 4.81%
   
7. Exco Resources (XCO): 4.75%
   
8. Freeport McMoran (FCX): 3.82%
   
9. Take Two Interactive (TTWO): 3.26%
   
10. SPDR Gold Trust (GLD): 3%
    
11. Corn Products (CPO): 2.35%
    
12. US Airways (LCC): 2.17%
    
13. Terrestar (TSTR): 1.66%
    
14. Harry Winston Diamond (HWD): 1.57%
    
15. Superior Well Services (SWSI): 1.37%
    

Harbinger runs quite a concentrated equity portfolio and remember that a lot of their holdings are also in distressed assets, Falcone's specialty. They turned over their portfolio quite significantly in the fourth quarter as a large portion of their top holdings are brand new positions. Most notable will be their stake in Sprint (S) which takes up over 15% of their reported assets. But also take not of their Exco Resources stake (XCO). We did, on the other hand, already know about their new Superior Wells position. This just goes to show that you have to track all SEC filings, not just the 13F's, as hedge funds will often give you glimpses into their portfolio on a much more real-time basis.

Most people will take notice of Harbinger's new stake in the gold ETF: GLD. So many hedge funds have some exposure to gold these days it's not even funny. We found two of Harbinger's new stakes intriguing. Firstly, Falcone has joined Carl Icahn in buying TTWO shares. Additionally, like David Tepper's Appaloosa Management, Falcone bought shares of airline LCC.

We saw some notable sales as Harbinger sold completely out of Solutia, something we saw coming as we detailed their seemingly constant sales of SOA. We had also seen Falcone's previous sales in CPN as well, so that wasn't surprising to see. It was interesting to see the hedge fund shed a good portion of their FCX position as they hadn't held it very long. Overall, Harbinger increased exposure to basic materials and sharply decreased exposure to Utilities.

All data used for this article comes from Alphaclone, our source for backtesting strategies and sorting through all the hedge fund portfolio maneuvers with ease. Assets reported on the 13F filing were $1.78 billion this quarter compared to $1.48 billion last quarter, a 20% increase. Remember that these filings are not representative of the hedge fund's entire base of AUM.

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

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

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

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

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


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


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


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


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


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

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

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

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

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

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