T. Boone Pickens isn’t your average hedge fund manager. He’s an oilman turned fund manager. Instead of taking risks in the oil fields, he now takes risks in financial markets. His investment strategy is quite straightforward. He forecasts the direction of energy markets and then makes outsized bets in mostly futures and derivatives markets. Depending on his call, he might go long or short. Since he makes directional bets, sometimes his losses are staggering. In 1997, he started a commodities fund which eventually lost 90% in less than two years.
Katherine Burton profiled Boone Pickens in her book “Hedge Hunters." Boone Pickens’ most memorable quote from the book is “most of my ideas work, but the timing gets screwed up every once in a while." Here is an excerpt from the book about Boone Pickens’ performance until 2008:
“His energy stock hedge funds, which invest 90% in equities and 10% in commodities, averaged returns of about 38% a year through mid-2007 since starting in August 2001. His oil and gas commodities fund distributed about $2.8 billion to investors since he started it in 1997. About $1.6 billion of the $4.3 billion BP Capital manages is Pickens’s personal fortune. New clients pay a 1.75% management fee and 30% of any profit.”
Insider Monkey analyzed Boone Pickens’ latest 13F filings. He clearly took advantage of the Gulf oil spill. This legendary oilman added BP PLC (NYSE:BP), Schlumberger Ltd (NYSE:SLB), Noble Corporation (NYSE:NE) and QEP Res Inc. (NYSE:QEP) into his portfolio.
His 10 largest positions and their market values are as follows:
|NAME OF ISSUER||(X1000)|
|MCMORAN EXPLORATION CO (NYSE:MMR)||20164|
|BP PLC (BP)||19818|
|SUNCOR ENERGY INC NEW (NYSE:SU)||18460|
|CHESAPEAKE ENERGY CORP (NYSE:CHK)||16837|
|APACHE CORP (NYSE:APA)||16058|
|WEATHERFORD INTERNATIONAL LT (NYSE:WFT)||14968|
|SCHLUMBERGER LTD (SLB)||12983|
|DEVON ENERGY CORP NEW (NYSE:DVN)||12638|
|ANADARKO PETE CORP (NYSE:APC)||12379|
|NOBLE CORPORATION BAAR (NE)||11353|
Boone Pickens completely sold his Transocean (NYSE:RIG) and Smith International Inc (SII) positions. He increased his Apache position by 164%, Plains Exploration and Production (NYSE:PXP) by 82%, Encana Corp (NYSE:ECA) by 58%, and Chesapeake by 26%.
Pickens cut his Hess Corp (NYSE:HES) by 54% and Anadarko by 31%.
Disclosure: I am long CHK.