10 Top Hedge Funds' 10 Favorite Stocks: Astonishing Performance

All the 13Fs are in and the rebalancing has taken place for AlphaClone. I started tracking a "Hedge Fund Masters" Clone in Jan 2007, that in backtests showed historical outperformance of about 6-12% per year. (I did those tests by hand and it took me an entire month.)

The ten most popular stocks from ten of my favorite hedge fund managers are beating the market by a whopping 27% YTD and 17% a year since 2000. That is astonishing to me. (This even includes one fund imploding, and at the end of 2008 year we replaced Okumus with Appaloosa. The Appaloosa clone is absolutely destroying the market this year. )

Below are the 10 managers I track, as well as their current holdings. The portfolio is beating the market by over 40% since I started tracking it in 2007. (Note: I started out tracking the top 2 holdings from each fund as well, and while it outperforms the market by a nice 8% per year, I don’t think it is the best way to track these funds. But I’ve said enough already, go get your hands dirty with the software and come up with your own alpha findings. P.S. check out the recent Goldman Trend Monitor for some tidbits as well.)

FUNDS

Baupost

Berkshire (BRK.A)

Blue Ridge

Eminence

Greenlight (GLRE)

Lone Pine

Maverick

Appaloosa (formerly Okumus, switched beginning of 2009)

Private

Tiger

Top Ten Most Popular Stocks

Qualcomm (QCOM)

Visa (V)

Google (GOOG)

Apple (AAPL)

Mastercard (MA)

Priceline (PCLN)

Health Management (HMA)

Strayer Ed (STRA)

Coca Cola (KO)

Union Pacific (UNP)

Comments

[Graham Jervis:]

GLRE all the way!! This company is going places within the next 10 years.

May 27 11:05 AM

[BestInvestIdea:]

Very interesting! Thank you for doing this work; anything to de-mystify hedge funds is a good thing for everyone. Its always surprising to me that hedge funds have so much of their returns explained by large cap, blue chip stocks.

May 31 12:00 PM