What Are the Best Hedge Funds Buying Now?

It’s 13-f season and many of the largest and best hedge funds are out with their holdings for the quarter ending September 30, 2009 (see the 50 most powerful hedge funds here). Although many of these positions may have changed since the filing date, it’s always useful to review these filings to glean any insights into what the smart money is doing in this market. I think readers will find some of the similarities between largest holdings quite useful.

John Paulson – Paulson & Co.

We have previously profiled Paulson in our guru outlook. As we said then, Paulson’s portfolio is heavily weighted towards gold, banks and healthcare.

1) SPDR Gold Trust (GLD) – $3.1B

2) Bank of America (BAC) – $2.7B

In a recent letter to shareholders, Paulson expressed his optimism regarding Bank of America:

[While the bank] has risen from when we purchased the stock, we believe considerable upside remains. Banks will have passed the current writedown cycle and have visibility for growth in 2012.

3) Wyeth (WYE) – $2.5B

4) Anglogold (AAUK.PK) – $1.7B

5) Schering Plough (SGP) – $1.6B

Like Cohen, Paulson also has a very large position in Liberty Media.

See the full filing here.

You can find his entire Q3 letter here courtesy of Dealbook:

Paulson & Co. 3Q Letter

Lee Ainslie – Maverick Capital

Ainslie’s Maverick Capital has a diverse set of equity holdings.

His largest positions are as follows:

1) Apple (AAPL) $281.5MM

3) HP (HPQ) $281.2MM

3) Corning (GLW) $258MM

4) QualComm (QCOM) $234MM

5) Priceline (PCLN) $210MM

Ainslie also has $200MM+ positions in JPM and CitiGroup. All in all, his portfolio has a clear tilt towards the high beta technology trade.

See their full filing here.

Steve Mandel – Lone Pine Capital

Mandel’s portfolio looks curiously similar to Ainslie’s:

1) JP Morgan (JPM) $716MM

2) Monsanto (MON) $649MM

3) Apple (AAPL) $572MM

4) QCOM $527MM

5) HP (HPQ) $465MM

Another tech heavy portfolio with a dabbling of banks in there.

See the full filing here.

Daniel Loeb – Third Point

Loeb’s portfolio is mixed with a number of large merger arb plays. Like the other large funds, he has some clear confidence in the banking recovery (See here for Loeb’s speech on success):

1) Wyeth (WYE) $190MM

2) PHH (PHH) $88MM

3) CF Industries (CF) $68MM

4) Liberty Acquisitions (LIA) $65MM

5) Bank of America (BAC) $50MM

You can see the full filing here.

Steve Cohen – SAC Capital

Cohen’s monstrous portfolio comes about as diversified as you’ll ever see for a large hedge fund. His fund is a blend of many of the others listed here:

1) Wyeth (WYE) – $450MM

2) Liberty Media (LMDIA) - $204MM

3) Barrick Gold (ABX) – $150MM, $58MM call position, $15MM put position

4) Conoco Philips (COP) – $145MM, $26MM call position, $13MM put position

5) Apple (AAPL) – $120MM, $27MM call position

You can see the entire filing here.

Comments

[Timeline Strategy Consulting]

Contradicts your last posting about AAPL being overvalued.

2009 Nov 19 08:30 AM

[The Pragmatic Capitalist]

Where does this post mention anything about value or my specific ideas on AAPL?


On Nov 19 08:30 AM Timeline Strategy Consulting wrote:

> Contradicts your last posting about AAPL being overvalued.

2009 Nov 19 02:29 PM

[JG Savoldi]

Our model is suggesting the importance of focusing more on the macro as opposed to stock-specific approach as we move into year-end and, assuming the mkts follow our model, we're facing a quant-driven debacle as the USD Carry Trade unwinds violently and sends the US Dollar spiking higher with stocks, crude oil, gold etc. plunging lower. (We're sticking with our JPM target of 17 dollars as well)

Our VIX model is confirming this view with relentless strength unfolding starting today and extending into March 2010. Our market crash call remains in place and we expect to see the SPX trade down to our 529 target into March 2010.

2009 Nov 20 08:27 AM

[Crude Oil Trader]

Great call JG. I take a lot of heat for my call of the SP 500 really being....The SP 500. What vehicle would you use to take full advantage of the fall? The likes of FAZ are tempting but the market makers are making that risky.

2009 Nov 20 01:16 PM

[Donald Ingram]

The 'Big' money is seeking a safe haven in short term T-bills as can be seen in the rates going negative as of Friday.
Lets face it, FDIC pays out a maximum of $250,000 in case of disaster and to buy protection for any amount greater would be cost prohibitive. So the cash flees to T-bills even though the rate is negative, the cost is VERY attractive to have a principle back guarantee from the government.
Something is afoot when this happens - it means that 'Big' cash is running scared in that there is no confidence in other vehicles to hold the money. Could foretell a large correction may be imminent.

2009 Nov 21 06:29 PM

[T. Boone]

How is successful investing like professional hockey?

Once, the greatest hockey player of all time was asked a question as to what was the secret of his success at scoring more goals than any other player had ever done....

to which Mr. Wayne Gretzky replied that he simply skated to where the puck ISN"T.

May I respectfully suggest that when it comes to investing that we consider following Mr. Gretzky's advice.

You are small and flexible. Use that to your advantage. Put your hard-earned dollars into areas where the Big Boys haven't already gone, but are likely to pick up later. Don't chase the hedge fund managers or Buffett's of the world.... it would be like midget hockey where all the little kids follow the puck and nobody seems to score a goal.

Just some thoughts to consider

2009 Nov 23 10:47 AM