What Are the Best Hedge Funds Buying Now?

by: Cullen Roche

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 (NYSEARCA:GLD) – $3.1B

2) Bank of America (NYSE: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 (NASDAQ:AAPL) $281.5MM

3) HP (NYSE:HPQ) $281.2MM

3) Corning (NYSE:GLW) $258MM

4) QualComm (NASDAQ:QCOM) $234MM

5) Priceline (NASDAQ: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 (NYSE:JPM) $716MM

2) Monsanto (NYSE: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


3) CF Industries (NYSE: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 (NYSE:ABX) – $150MM, $58MM call position, $15MM put position

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

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

You can see the entire filing here.