Posts Tagged ‘Hedge Fund’
Goldman Sachs’ VIP List: Most Important Stocks For Hedge Funds
Thursday, March 11th, 2010
This article is a guest contribution from MarketFolly.com, an excellent blog which tracks the activities of the hedge fund industry’s finest.
Given our focus on following hedge fund movements, we thought it would be prudent to post up Goldman Sachs’ VIP list. The ‘VIP’ stands for ‘Very Important Positions‘ for hedge funds that employ fundamental strategies rather than technical or trading. In essence, these are the 50 stocks that most frequently appear among the top ten holdings of hedge funds. In our hedge fund portfolio tracking series you may have noticed various stocks popping up over and over again in their top 10 holdings. This is simply an aggregation of a larger set of data and stems from our previous coverage of the top ten hedgie holdings.
This basket of stocks returned 40% in 2009 versus 27% for the S&P 500. Goldman also notes that this list has, “outperformed the S&P 500 by 81 bp on a quarterly basis since 2001, with a Sharpe Ratio of 0.29.” Quarterly turnover on this list is typically around 15 positions out of the 50. Those of you with Bloomberg Terminal access can look it up via GSTHHVIP.
Goldman has aggregated data from 487 funds based on the recent slew of 13F filings so these were the most popular stocks owned as of December 31st, 2009. Again, they focus on fundamentally focused hedge funds but have taken a much broader view of hedge fund land than we typically have. We instead focus on a select list of funds to track that are ideal due to their strategy and portfolio concentration. What’s most interesting about the data Goldman has assembled is that many of the positions have actually been down year-to-date for 2010. We found that intriguing given that these are essentially ‘groupthink’ or consensus picks.
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Below you will find Goldman Sachs’ VIP List with the name of the stock followed by the number of hedge funds that own that stock in their top ten holdings.
- Apple (AAPL): 67 hedge funds hold it as a top ten holding
- Pfizer (PFE): 45
- Bank of America (BAC): 37
- Google (GOOG): 37
- JPMorgan Chase (JPM): 36
- Microsoft (MSFT): 36
- Mastercard (MA): 29
- DirecTV (DTV): 27
- Wells Fargo (WFC): 27
- CVS Caremark (CVS): 24
- Citigroup (C): 23
- Hewlett Packard (HPQ): 23
- Monsanto (MON): 23
- Visa (V): 23
- Cisco Systems (CSCO): 21
- Walmart (WMT): 21
- Oracle (ORCL): 18
- Qualcomm (QCOM): 18
- Exxon Mobil (XOM): 18
- Ebay (EBAY): 17
- Wellpoint (WLP): 17
- Intel (INTC): 16
- Mead Johnson Nutrition (MJN): 16
- Merck (MRK): 16
- Johnson & Johnson (JNJ): 15
- Liberty Media (LSTZA): 15
- Amazon (AMZN): 14
- Apache (APA): 14
- EMC (EMC): 14
- Express Scripts (ESRX): 14
- Ford Motor (F): 14
- IBM (IBM): 14
- Lear (LEA): 14
- Teva Pharmaceutical (TEVA): 14
- Yahoo (YHOO): 14
- Crown Castle (CCI): 13
- McDonald’s (MCD): 13
- Transocean (RIG): 13
- Barrick Gold (ABX): 12
- SBA Communications (SBAC): 12
- US Bancorp (USB): 12
- Anadarko Petroleum (APC): 11
- Berkshire Hathaway (BRK.B): 11
- Philip Morris International (PM): 11
- Transdigm Group (TDG): 11
- Target (TGT): 11
- Thermo Fisher Scientific (TMO): 11
- American Tower (AMT): 10
- Comcast (CMCSA): 10
- Freeport McMoran (FCX): 10
Of the stocks mentioned, there are a handful that are brand new additions to Goldman’s VIP list. This means that enough hedge funds have brought their stakes in the company up to a top 10 position in their respective portfolios. Positions that hedgies added largely to in the fourth quarter include: Wells Fargo (WFC), Mead Johnson (MJN), Merck (MRK), Liberty Media (LSTZA), Amazon (AMZN), Apache (APA), IBM (IBM), Lear (LEA), Crown Castle (CCI), SBA Communications (SBAC), US Bancorp (USB), Anadarko Petroleum (APC), Target (TGT), American Tower (AMT), and Freeport McMoran (FCX).
Readers will take note that all three major tower stocks are included as we’ve been harping on this for some time now. We’ve highlighted how hedgies had increased exposure to AMT, CCI, and SBAC as demand for wireless data service continues to grow. Overall, an insightful list and now you can easily follow the smart money with these consensus plays. For more research from Goldman Sachs, head to our other post which covers an extensive look at the top hedge fund holdings. And don’t forget that you can also get specific hedgie portfolio updates by heading to our tracking series where we specifically focus on bottom-up stockpickers.
Source: Marketfolly.com, March 5, 2010
Tags: 13f Filings, Advertisement, Aggregation, Amp, Apple, Bp, Concentration, Consensus, Consensus Picks, Fund Portfolio, Goldman Sachs, Hedge Fund, Hedge Funds, Hedgie, Quarterly Basis, Sharpe Ratio, Slew, Stems, Stock, Stocks, Turnover, Vip
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Which Way Now? Hard Assets or Government Bonds?
Sunday, January 31st, 2010
The debate in the market between inflationists (majority) and deflationists (minority) continues to complicate investors’ ability to make decisions about where to deploy funds.
During the course of the year, inflationists benefited from the tailwind provided by the declining value of the dollar. The rally in risk assets came thanks to Bernanke’s deflation-busting policy, and, ironically, therefore, as long as the news remained dire on GDP growth and unemployment, we could count on interest rates to remain around zero percent, and the dollar to continue lower as faithless investors ditched it.
For nine months, the dollar declined as the market put risk back “on.” At the very beginning of the rally, in March 2009, the market’s mood was very dark. The genesis of the rally was the short covering of bank stocks and financials, and the full scale launch of the dollar funded carry trade, mostly taking place in institutional and hedge fund trading rooms. Except for the wiliest, it most certainly was not driven by retail investors. The retail investor is usually late to the party once fear of missing opportunities sets in.
The rally in the dollar as of late November has confused the inflationist view as the tailwinds appear to have reversed. This has been, and remains a difficult time to make risk-based investment decisions.
by Pierre Daillie (AdvisorAnalyst.com), GlobeAdvisor.com, January 31, 2010.
http://www.globeadvisor.com/advisoranalyst/aa20100131.html
Tags: Bank stocks, Bernanke, GDP, GDP Growth, Genesis, Globeadvisor, Government Bonds, Hedge Fund, interest rates, Investment Decisions, Late November, Launch, Nine Months, Rally, Retail Investor, Retail Investors, Short Covering, Tailwind, Tailwinds, Zero Percent
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A Yen for Canada?
Monday, January 18th, 2010
Back in September I wrote Canada on the Cusp of Something Big outlining my case about the Canadian economy, markets, and loonie. My central argument then, and now, was that Canadians need to get in front of the “invest in Canada,” theme before foreigners do. Sound fiscal policy, strong, well capitalized banks, a productive commodity complex, and our good-old-fashioned brand of conservatism, continue to make Canada the leading destination for investors, both on the domestic front, and internationally, in the G7.
There is more to the Canada story than meets the eye. The fundamentals, are only half the story, and relevant, particularly for the longer term outlook . What matters equally in the near and long term, however, is what is going on behind the scenes in the proprietary institutional and hedge fund trading rooms.
Pierre Daillie (AdvisorAnalyst.com), GlobeAdvisor.com, January 18, 2009
Tags: Advertisement, Banks, Canada, Canada Story, Canadian Economy, Canadians, Central Argument, Commodities, Commodity, Conservatism, Cusp, Foreigners, G7, Globeadvisor, Half The Story, Hedge Fund, Investors, Sound Fiscal Policy, Term Outlook, Yen
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The World’s Biggest Bond Fund Is Moving Aggressively Into Corporate Holdings, Away From Government-Insured Risk
Tuesday, December 29th, 2009
This article is a guest contribution by by Tyler Durden of ZeroHedge.com.
As we pointed out two weeks ago, PIMCO has been preparing for 2010 by selling out its legacy “safe” MBS and Treasury holdings, and shifting largely to cash. Furthermore, the recent hirings of corporate and distressed asset managers indicates that the traditionally Treasury heavy asset manager is set to become the world’s biggest fixed income hedge fund, focusing on IG, high yield and distressed investments. As PIMCO is a critical manager in numerous government bailout programs, we can only hope that the firms’ Newport Beach Chinese Walls are better at keeping secrets than the characters in assorted O.C. legacy “reality” shows. The below presentation by PIMCO’s Mark Kiesel indicates why PIMCO will soon be one of the primary actors in future official creditor committees in the upcoming wave of corporate bankruptcies (yes, shockingly assets do have to create cashflows for companies to avoid bankruptcy).
US_Credit_Kiesel_Picking_Winners_January -
Tags: Asset Manager, Asset Managers, Bailout, Bond Fund, Cashflows, Chinese Walls, Committees, Corporate Bankruptcies, Creditor, Fixed Income, Hedge Fund, high yield, Ig, Keeping Secrets, Kiesel, Mbs, Newport Beach, PIMCO, Treasury, Tyler Durden
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WealthTrack: David Winters - searching the world for deep discounts
Saturday, December 26th, 2009
This week Consuelo Mack is joined on WealthTrack by David Winters, a noted value investor who Smart Money magazine identified as one of the “world’s greatest investors”. He searches the world for high quality companies selling at deep discounts to their intrinsic values through the Wintergreen Fund, which brings a hedge fund’s “go anywhere and invest in anything” flexibility to mutual fund customers. In this interview, Winters shares where he is finding value in the market now.
Note: The transcript of this interview is not available yet, but will be posted here as soon as it arrives.
Source: Wealthtrack, December 24, 2009.
Tags: David Winters, Flexibility, Hedge Fund, High Quality, Intrinsic Values, Investors, Mack, Mutual Fund, Quality Companies, Shares, Smart Money Magazine, Value Investor, Wealthtrack, Wintergreen Fund
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Daniel Arbess on China, Inflation, Commodities
Friday, December 11th, 2009
Daniel Arbess, manager of the Xerion Hedge Fund and partner at Perella Weinberg Partners in New York, joins Aline van Duyn, US markets editor of the Financial Times, to discuss themes from 2009, inflation risks, China and commodities.
Part 1: Themes from 2009
Arbess says “next year is going to be a much more difficult year, because we have not reduced the amount of gross leverage in the financial system”. He also discusses government interventions over the past year.
Click here or on the image below to view Part 1 of the interview.
Part 2: Inflation risks
Arbess says “next year investing is going to be as much about managing macro and fiscal imbalances and tail risks as it is about selecting the right securities”.
Click here to view Part 2 of the interview.
Part 3: China and commodities
Arbess says: “I think that this year will be proven to have been the easy part. … what we did was we put a finger in the dyke last year, but by no means has the dyke been repaired.”
Click here to view Part 3 of the interview.
Source: Aline van Duyn, Financial Times (here, here and here), December 8, 2009.
Tags: Advertisement, Aline, China, Commodities, December 8, Dyke, Emerging Markets, Financial Times, Fiscal Imbalances, Government Interventions, Hedge Fund, Image, Inflation Risks, Interview Source, Leverage, Macro, Perella Weinberg Partners, Themes
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The Scale of Paulson’s Gold Purchases
Monday, December 7th, 2009
John Paulson (unrelated to Hank, ex-US Treasury Secretary), US hedge fund manager, shot to fame by capitalizing in spectacular fashion on the credit crisis by, among others, betting against a number of financial institutions. In the process, he raked in some $20 billion.
He more recently developed an affinity for gold and is also launching a gold fund on January 1. However, what came as an eye-opener to me was the extent of Paulson’s existing gold holdings, as highlighted in the table below by Joshua Brown, writer of the The Reformed Broker blog. The fact that some pretty serious countries are included on the list makes the comparison quite remarkable.
Quite extraordinary! Imagine having to undo this position when the time comes.
Source: The Reformed Broker, November 24, 2009.
Tags: Advertisement, Affinity, Blog, Credit Crisis, Extent, Eye Opener, Financial Institutions, Gold, Gold Fund, Gold Holdings, Hedge Fund, January 1, Joshua Brown, Spectacular Fashion, Us Treasury Secretary
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John Paulson’s Big New Bet on Gold
Friday, November 20th, 2009
Gold is getting a great deal of sponsorship, in general, but it is even more notable, when some of that sponsorship is coming from the likes of this era’s new contrarians. John Paulson, who personally made $4-billion betting against subprime mortgages in 2007, has shifted his focus to gold during the last 9 months, and now he is ramping it up yet another notch. On another note we’ve also covered in the recent past, David Einhorn’s now well-known accumulation of gold bullion, as well as S&P500 Puts.
Yesterday’s Wall Street Journal discusses Paulson’s latest plans:
John Paulson, who scored about $20 billion of profits between 2007 and early 2009 wagering against the housing market and financial companies, is launching a hedge fund dedicated to buying up shares of gold miners and other bullion-related investments, according to investors.
He is starting a new fund with his own money:
Mr. Paulson told his investors he personally would invest between $200 million and $250 million in the new fund, which he said will begin on Jan. 1, according to an investor at the meeting.
His theory on gold differs, in that Paulson seems to have recognized quite rapidly that central banks’ appetite has shifted in favour of the shiny stuff, and that their appetite is not strictly based on concerns of inflation. If you read between the lines, Paulson is suggesting that will be the gravy (when it indeed happens), and the real impetus is the constrained supply:
He noted that central banks around the globe have gone from sellers of gold to buyers, and that the global supply of gold is constrained.
While harmful inflation isn’t on the horizon, he said, Mr. Paulson argued that there is a risk of a burst of inflation down the road. That’s because in the past there’s been a lag between a surge in money supply and higher inflation. Gold often does well when inflation rises.
Mr. Paulson told investors that the Federal Reserve will prove reluctant to raise interest rates, given the weakness in the economy, which also could pave the way for higher inflation, at least at some point, another reason for his growing conviction about gold.
This is an interesting development for the stocks of gold producers. At the very least Paulson and other investors who are devoted to this theme will add key support to the market’s appetite for gold equities and bullion.
John Paulson Making Big New Bet on Gold
Tags: 9 Months, Central Banks, Contrarians, David Einhorn, Global Supply, Gold, Gold Bullion, Gold Gold, Gold Miners, Gravy, Hedge Fund, Housing Market, Impetus, inflation, John Paulson, Money Supply, New Bet, P500, Shiny Stuff, Subprime Mortgages, Wall Street Journal, Wea
Posted in Gold, Markets | No Comments »
Super-Rich buying Gold, Commodities, Reducing Hedge Fund Exposure
Monday, November 16th, 2009
Steve Lodge, FT.com, reports that the super-rich are opting for gold and commodities, and cash, and reducing hedge funds exposure.
The investment preferences of the world’s wealthiest families have shifted significantly in favour of gold and other commodities and away from hedge funds in the wake of the financial crisis, according to a survey of family offices and advisers of the super-rich.
Two-thirds of the 100 respondents to a survey by the Family Office Channel, a new website, said that super-rich families are now more likely to invest in gold and other commodities. They are also more interested in bond investments and in holding higher amounts of cash as part of an “instinctive retreat to ultra-safe asset classes”.
Read the whole article here.
Tags: Advertisement, Asset Classes, Bond Investments, Buying Gold, Commodities, Favour, Financial Crisis, Gold, Gold Commodities, Gold Fund, Hedge Fund, Hedge Funds, Invest In Gold, Investment Preferences, Respondents, Rich Families, Two Thirds, Wealthiest Families
Posted in Gold, Markets | No Comments »
“Bull markets do not die of old age; they are assassinated – usually by central banks”
Thursday, November 12th, 2009
One of the most incisive thinkers in the investment field is David Fuller who runs the Fullermoney service from London and provides daily written and podcast commentary. I have been subscribing to the service for more than 20 years and consider it part of my staple investment diet, particularly also for its truly global approach. I am not an agent for David, but please visit by his site to get a feel for his excellent commentary.
The paragraphs below from Monday’s Fullermoney report are particularly topical at this juncture in stock markets.
Veteran subscribers will recall a remark often used on this site: Bull markets do not die of old age - to which I will add, or warnings by Roubiniesque economists. Instead, they are assassinated - usually by central banks.
“So how many rate bullets does it take to fell a bull?
“You may not be surprised to hear that there is no precise answer, because it depends mainly on sentiment and liquidity. We know when central banks start to reduce liquidity, or at least increase its price, but we do not know precisely when that will affect sentiment adversely.
“We know that a few central banks have commenced an incremental tightening of rates. However, we cannot know how aggressively they will act or when other central banks will follow their lead, because they do not know themselves.
“Recently, some big guns from the investment management and hedge fund industry concluded that stock markets were ripe for a correction. I was of a similar view. However, markets seldom dance to countertrend tunes for long, and with but a few exceptions we have seen little more than slightly larger reactions and more sideways ranging recently.
“The DJIA’s new recovery high today [Monday] is not exactly the stuff of corrections, unless it is instantly and dramatically reversed. Meanwhile, I would back the bull trend. After all, we have seen some mean reversion recently, narrowing overextensions relative to 200-day moving averages. There is also the not insignificant matter of the biggest monetary reflation in human history, and there is no hyperbole in that description.
“Stock market indices would have to break beneath their most recent reaction lows to question further the overall outlook for sideways to higher ranging.
“Meanwhile, note also the still widening spread between US 10-year yields over 2-year yields, otherwise known as the Yield Curve, on this historical chart. It is still rising, indicating to me that quantitative easing continues. The time to start thinking about closing long portfolios in anticipation of the next bear market, I suggest, will be when the Yield Curve next inverts by moving below zero. However the lead was so early last time (early 2006) that some of us became complacent about it.”
Source: Fullermoney.com, November 10, 2009.
Tags: Big Guns, Bull Markets, Bullets, Central Banks, David Fuller, DJIA, Economists, Fullermoney, Global Approach, Hedge Fund, Investment Field, Investment Management, Juncture, liquidity, Mean Reversion, Paragraphs, Precise Answer, Sentiment, Stock Markets, Thinkers
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A Reversal in CAD in Synch with Reversal in Markets
Thursday, October 29th, 2009
Canadian central banker, Mark Carney’s concerns about the strong Loonie are well known. It threatens Canada’s economic recovery. Some currency analysts believe the Canadian dollar could test its $1.10 highs again. But what is Carney doing about it?
David Rosenberg says we should embrace this period in Canada’s economic history. “For its part, the Bank of Canada has said that “persistent strength in the Canadian dollar” is going to “slow growth and subdue inflation pressures.” So, in return for softer growth, what we get back is lower “inflation pressures.” The winner here is anyone who needs to borrow money – a strong loonie will prevent the Band of Canada from taking the interest-rate punchbowl away any time soon.”
But, last week, the Bank of Canada interrupted the Canadian dollar’s ascent when it left rates at 0.25%, and downgraded economic growth prospects for 2010 and 2011. The dollar lost 2 cents. There is pressure though for the BoC to ease further.
Carney’s wait-and-see stance on quantitative intervention, indicates he may not have to. Instead, he may be talking through this, while waiting for the G20 to sort out the US dollar; in effect, a policy of benign neglect.
At the G-20 meeting in Pittsburgh in late September, leaders made commitments to pursue policies to bring the world into greater economic balance. Following that meeting, the ECB’s Trichet said it is “extremely important” that U.S. authorities pursue policies supporting a strong dollar, and that excessive foreign-exchange volatility is an “enemy.”
There’s another G20 meeting scheduled for Nov. 6-7 in Scotland, and it’s most likely to serve as a forum where all concerns over the dollar’s weakness will be aired. “I think there will be fireworks at the G20,” said Stephen Jen, a well-respected currencies investor at hedge fund BlueGold Capital Management in London.
The US is wallowing in the advantage of a weaker dollar. Neil Mellor, Bank of New York currency analyst, says, “You can’t continue down this road without something giving way, and it’s clear that the U.S. is not going to do anything to put meat on the bones of its strong-dollar policy.”
US$450-billion has been sucked from money market funds (the dollar) into risky assets since March. Zero-percent-interest-rate policy (ZIRP) crowded investors out of the money market and into risky assets. In the simplest of terms, the global equity markets’ slingshot recovery has led to conversely rapid devaluation of the dollar.
Now, a “strong US dollar policy,” for which there is great political will globally, appears to hinge upon a reversal of fortune in markets or concerted monetary intervention via the IMF, or both.
Therefore, the price of relief from the Loonie’s climb could be a synchronized decline in commodity prices and equity markets, in the near term. The repatriation of cash to US money markets means a stronger US dollar, and thus a weaker Canadian dollar, hence the synchronization with the reversal in equity markets and commodities prices. Perhaps Carney is right to let the big players sort out and tighten the US Dollar.
In newer developments earlier this week, the US government, perhaps under some pressure, showed signs that it is willing to withdraw stimulus, thus tightening the Greenback, by closing down the housing tax credit, and calling on Bank of America to repay its bailout by selling shares. The market is reacting poorly.
It begs the question - Is the tail wagging the dog?
If the stimulus and zero interest rate policy is responsible for the markets’ huge recovery, then what effect will indications now, of the US government’s willingness to withdraw stimulus, have?
Either way, it would be prudent, at this point, to take the political pressure from the world’s other large economies to re-establish balance without jeopardizing their own recoveries, seriously.
Tags: Ascent, Bank Of Canada, Bank Of New York, Benign Neglect, Boc, Buybacks, Canada, Canadian Dollar, Capital Management, Commodities, Currency Analysts, David Rosenberg, Dollar Policy, ECB, Economic Balance, Economic History, Economic Recovery, Finance Minister, G20 Meeting, Global Equity Markets, Gold, Growth Prospects, Hedge Fund, Inflation Pressures, Interest Rate Policy, Late September, Loonie, Mark Carney, Money Market Funds, Neil Mellor, Punchbowl, Resumption, Risky Assets, Strong Dollar, Trichet, Volatility
Posted in Emerging Markets, Gold, Markets | No Comments »
Larry Fink: Markets Too Optimistic
Tuesday, October 6th, 2009
In the FT’s “Future of Investing” series, Larry Fink, chief executive and chairman of BlackRock talks to Henry Sender, international financial correspondent. This is excellent video footage.
Part 1:
Fink explains his concerns that the global economy is not as robust as the market is pricing in and that the economic recovery will be an elongated struggle.
Click here or on the image below to view the video clip.
Oct 2: Consolidation inevitable in asset management
Part 2:
Fink discusses the need to be global in the asset management business and the robust future for the hedge fund industry.
Click here or on the image below to view the video clip.
Source: Henry Sender, Financial Times (here and here), October 2, 2009.
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Tags: Advertisement, Asset Management Business, Chief Executive, Consolidation, Correspondent, Economic Recovery, Financial Times, Global Business, Global Economy, Hedge Fund, Investing, Larry Fink, Struggle, Video Clip, Video Footage
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