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Jim Simons’ Medallion Fund is the best hedge fund that we have come across. The firm charges a fixed 5% management fee and takes 44% of the returns generated. After these expenses are deducted Medallion provided an average annual return of 35% to its investors. A couple of months ago, our calculations showed that Medallion’s annual alpha is 34%. The success of Medallion fund is why Jim Simons is one the wealthiest people on the planet.

Medallion fund usually trades in small quantities. The median position size is less than $2.5 million. However, Jim Simons has some positions in his portfolio that are as large as $397 million. These positions were probably acquired for Simons’ Renaissance Institutional Equities Fund (RIEF). RIEF isn’t nearly as successful as Medallion but managed to beat the index funds since inception.

We compiled Jim Simons’ largest positions that were at least $80 million at the end of March.

CompanyName

Ticker

Value

Activity

Return

JOHNSON & JOHNSON

JNJ

396572

21%

13.4%

ALCON INC

ACL

314502

114%

1.5%

LORILLARD INC

LO

256765

-38%

8.1%

PRICELINE COM INC

PCLN

248358

102%

-4.8%

COCA COLA CO

KO

229530

54%

-1.1%

LILLY ELI & CO

LLY

227895

156%

7.2%

INTEL CORP

INTC

209172

78%

6.8%

APPLE INC

AAPL

196948

-58%

-6.3%

TARGET CORP

TGT

191468

New

-6.7%

NOVO NORDISK A S

NVO

175021

1%

-2.0%

ALTERA CORP

ALTR

163922

6%

-1.4%

ISHARES TRUST

EEM

154673

157%

-4.7%

COLGATE PALMOLIVE CO

CL

154252

6%

6.4%

GENERAL ELECTRIC CO

GE

151395

New

-8.3%

EXXON MOBIL CORP

XOM

141893

New

-5.3%

MCDONALDS CORP

MCD

138796

12%

6.9%

BRISTOL MYERS SQUIBB CO

BMY

123256

37%

4.4%

CHIPOTLE MEXICAN GRILL

CMG

122759

-28%

-0.5%

GOOGLE INC

GOOG

115140

-27%

-14.0%

STAPLES INC

SPLS

111993

New

-22.9%

TAIWAN SEMICONDUCTOR

TSM

104258

17%

6.7%

MICROSOFT CORP

MSFT

103289

333%

-4.7%

ALASKA AIRGROUP INC

ALK

101364

2%

-1.3%

MASTERCARD INC

MA

99656

71%

6.3%

PHILIPPINE LONG DISTANC

PHI

97375

-1%

-1.0%

FAMILY DOLLAR STORES

FDO

91442

-25%

1.4%

PHILIP MORRIS INT

PM

91436

199%

2.9%

DOLLAR THRIFTY AUTO

DTG

89545

140%

19.7%

CENTURYLINK INC

CTL

89267

59%

-2.4%

FREEPORT MCMORAN

FCX

88406

101%

-12.6%

QWEST COMMUNICATIONS

Q

88386

5%

0.0%

BAIDU INC

BIDU

85153

179%

-14.4%

HUMANA INC

HUM

85026

-51%

11.8%

ALCATEL LUCENT

ALU

83547

1356%

-11.4%

TEVA PHARMACEUTICAL

TEVA

83115

-45%

-1.6%

PANERA BREAD CO

PNRA

81800

112%

-8.4%

AMGEN INC

AMGN

81191

-9%

9.2%

Jim Simons' largest positions returned 0.3% since the end of first quarter, vs. -3.7% return for the S&P 500 (NYSEARCA:SPY) index. Simons' largest longer term stock picks managed to beat the market by 4 percentage points in less than three months. Six of his top 7 positions also beat the market. Johnson& Johnson (NYSE:JNJ) returned more than 13% and beat the market by 17 percentage points. It was Simons' largest position with nearly $400 Million. Warren Buffett, Ken Fisher, and Bill Miller were among the other prominent investors who were bullish about JNJ.

Simons' third largest position was LO, which returned more than 8% since the end of March. This has been an amazing pick for Simons this year. Simons had $360 Million in LO at the end of December, and the stock returned 18% during the first quarter as it was revealed that the regulation on Menthol cigarettes weren't as restrictive as feared. Simons' trimmed his position by 38% during the first quarter, yet it was still his third largest position. First Eagle Investment Management and Paulson&Co were also betting on LO during the first quarter.

Jim Simons's Renaissance is one of our favorite hedge funds and we believe its largest stock picks can beat the market in the long-term. (See the fund's other picks here). Investors should pay special attention to the stocks they have consistently held a large stake in for more than a single quarter.

Source: Billionaire Jim Simons' Long-Term Stock Picks