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Jim Simons’ Medallion Fund is the best hedge fund we have come across. Since 1990, Medallion Fund has not incurred negative returns. During the financial crisis of 2007/2008, Jim Simons realized incomparably high returns. In 2007, his fund returned 73% and in 2008 he again successfully beat the market with 80% returns. He is among the richest people of today. We believe he would have been the richest man on this planet if he had started investing 20 years before he actually did.

Jim Simons has his own unique style of investing. He exploits market inefficiencies by high frequency trading. He also uses algorithms to assist him in executing large orders. Therefore, his hedge fund incurs high expenses and transaction costs. This very fact also justifies the higher than average performance fee of 44% charged by Medallion. However, as Jim Simons is the largest investor of Medallion and majority of other investors are current and past employees of the fund, the 44% fee is quite irrelevant. Jim Simons owns around 25% to 50% of Renaissance Technologies (RenTec).

During the second quarter, Renaissance reduced its holdings in General Electric (NYSE:GE) by -33%, Coca Cola Co (NYSE:KO) by -40% and Priceline (NASDAQ:PCLN) by -18%. General Electric lost 16%, Priceline lost 2%, and Coca Cola returned 0%. Here are Jim Simons’ biggest bets at the end of June:

Company

Ticker

Value (x1000)

Activity

Activity

APPLE INC

AAPL

445837

135%

12%

LILLY ELI & CO

LLY

387873

59%

-6%

LORILLARD INC

LO

311390

6%

-7%

INTEL CORP

INTC

280841

22%

-6%

GOOGLE INC

GOOG

280581

182%

11%

PROCTER & GAMBLE

PG

253112

NEW

-3%

PHILIP MORRIS INTL

PM

242355

161%

0%

COLGATE PALMOLIVE

CL

229049

37%

-2%

EXXON MOBIL CORP

XOM

227245

66%

-11%

NOVO-NORDISK A S

NVO

221194

26%

-13%

ALTERA CORP

ALTR

220792

28%

-21%

MCDONALDS CORP

MCD

207393

35%

3%

BRISTOL MYERS

BMY

207290

53%

-3%

PRICELINE COM

PCLN

205130

-18%

-2%

JPMORGAN CHASE

JPM

199815

NEW

-12%

CHIPOTLE MEXICAN GRI

CMG

187637

35%

3%

MEAD JOHNSON

MJN

148610

60%

2%

COCA COLA CO

KO

140340

-40%

0%

AMGEN INC

AMGN

139702

58%

-14%

VODAFONE GROUP

VOD

127863

2652%

1%

NOVARTIS A G

NVS

125065

NEW

-10%

LULULEMON ATHLETICA

LULU

120553

328%

4%

ALASKA AIR GROUP

ALK

115649

6%

-18%

VERIZON

VZ

114148

NEW

-7%

COMPANHIA DE BEBIDAS

ABV

113748

45%

-6%

NEWMONT MINING

NEM

112943

55%

6%

BIOGEN IDEC INC

BIIB

102896

225%

-15%

HERSHEY CO

HSY

99084

120%

-2%

GENERAL ELECTRIC

GE

95531

-33%

-16%

AT&T INC

T

94637

170%

-9%

Apple Inc (NASDAQ:AAPL) is Jim Simons’ largest stock holding. Previously in the first quarter, he decreased Apple holdings by 58%. However, in the second quarter ending June, he increased it by 135%. He made a perfectly timed decision as Apple gained 12% since the end of June. As of now, he owns $44.5 million worth of Apple. Julian Robertson is another investor who increased Apple during the second quarter of 2011 (see Julian Robertson’s market beating stock picks).

Jim Simons also boosted his stake in Google (NASDAQ:GOOG). Like Apple, he also reduced his Google holdings in the first quarter of 2011. However, in the second quarter, Simons increased Google stake by 182%. The stock gained 11% since the end of June, outperforming the market by a large margin. During the second quarter David Tepper’s Appaloosa Management added Google to its 13F portfolio (take a look at David Tepper’s latest stock picks).

Jim Simons initiated a position in JPMorgan Chase (NYSE:JPM) during the second quarter. He had $199 million in JPM, which lost 21% since the end of June. Ken Heebner’s Capital Growth Management added JPMorgan Chase to his 13F portfolio during the second quarter.

Jim Simons’ top stock picks lost 3.5% since the end of June. However, he beat the market by 7 percentage points as the S&P 500 Index (NYSEARCA:SPY) lost 10.5%. We recommend investors to closely follow Jim Simons’ stock picks as 16 out of his top 20 positions managed to beat the market.



Disclosure: I am long PM, VOD, T.

Source: Billionaire Jim Simons' Hot Stock Picks