Leading Hedge Funds' Best Ideas for 2008

The 13Fs are arriving and below I update the two tracking portfolios.

(For background on this approach, check out Show Me Your Hand - Betting on the Smart Money.)

Below is a table of updated performance figures for the two strategies we track, followed by individual fund holdings and commentary. In our previous backtests, we found that the strategies outperformed the stock indexes by 6-12% per year since 2000 with similar volatility. 2007 was the first year out of sample and the performance was quite strong.

A subjective and non-scientific observation is that the portfolios generally track the market on the downside, but have much higher upside volatility.

Performance:

Hedge Fund Consensus - Top holdings owned by 15 value hedge funds, ranked by # of funds with the same position. Google (GOOG) was the worst performer at -27%.

Qualcomm (QCOM) (5)
America Movil (AMX) (4)
American Express (AXP) (3)
MasterCard (MA) (3)
Microsoft (MSFT) (3)
Wal-Mart (WMT) (3)

The list of double repeats is at the end of the post.

Hedge Fund Best Ideas - Top two holdings from each of 10 value hedge funds listed below. Apple (AAPL) was the worst performer at -40% (since AMX and QCOM are repeats, I took the next two stocks - Southwestern Energy (SWN) and MA):

AMX
Bed, Bath & Beyond (BBBY)
CA, Inc. (CA)
Covanta (CVA)
CVS-Caremark (CVS)
Discovery Holding Co. (DISCA)
GOOG
Helix Energy (HLX)
Hewlett-Packard (HPQ)
Coke (KO)
MA
Moody's (MCO)
News Corp. (NWS)
Oracle (ORCL)
QCOM
Ross Stores (ROST)
SLM Corp. (SLM)
SWN
Target (TGT)
Wells Fargo (WFC)

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Click for individual portfolios:

Baupost Group
Blue Ridge Capital
Warren Buffett
Eminence Capital
Greenlight Capital
Lone Pine Capital
Maverick Capital
Okumus Capital
Private Capital
Tiger Global

List of double repeats:
Applied Materials (AMAT)
Brookfield Asset Management (BAM)
Bed Bath & Beyond (BBBY)
Baidu.com (BIDU)
Burlington Northern (BNI)
Berkshire Hathaway (BRK.A)
CME (CME)
Coach (COH)
Cisco (CSCO)
Cablevision (CVC)
Quest Diagnostics (DGX)
EMC Corp. (EMC)
E*Trade Financial (ETFC)
Eagle Materials (EXP)
Google (GOOG)
Horizon Lines (HRZ)
International Gaming Technology (IGT)
Macy's (M)
Moody's (MCO)
M.D.C. Holdings (MDC)
Office Depot (ODP)
Oracle (ORCL)
Priceline.com (PCLN)
SAIC, Inc. (SAI)
SBA Communications Corp. (SBAC)
SLM Corp. (SLM)
Target (TGT)
Thermo Fisher Scientific (TMO)
Trane Inc. (TT)
Textron (TXT)
United Technologies (UTX)

Comments

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So let me see if I'm reading this correctly,

the "Top holdings owned by 15 value hedge funds, ranked by # of funds with the same position" included Google

and the "Top two holdings from each of 10 value hedge funds listed below" included Apple

???

wow, those are some great VALUE funds.

is it Bizarro World today or do those seem like GROWTH picks to anybody else?

[WorldBeta]

Astute observation PAD. It sure seems like the value hedge funds are finding more "value" in growth stocks right now. . .I examined that property last May here:

tinyurl.com/37wufg

[Ernie Montague]

Google? A great $200 stock on its way to its real value