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What do hedge funds see that Seeking Alpha readers don't? Of Goldman's list of stocks most-loved...

What do hedge funds see that Seeking Alpha readers don't? Of Goldman's list of stocks most-loved by hedge funds, two - John Malone cable plays Virgin Media (VMED) and Charter Communications (CHTR) - are barely followed by our readers, each with less than 500 Real Time Email Alerts subscribers. Another three - Hertz (HTZ), CBS, and Equinix (EQIX) - have, at best, moderate followings (1,100-1,400 subscribers). For comparison: Hess has 3.5K, GM 11.4K, JPM 23K, Google 76K, Apple 180K. While hedge funds as a whole struggle to beat the market, their top 20 holdings have done so with ease this year.
Comments (13)
  • Kevin Flynn, CFA
    , contributor
    Comments (594) | Send Message
     
    One of the principal reasons that top 20 holdings have beaten the market is because - they're a top 20 holding. Volume buying pushes up the price in an auction market, ever notice that?
    27 May 2013, 09:34 AM Reply Like
  • Petrarch
    , contributor
    Comments (670) | Send Message
     
    Alpha - you should make an index weighted inversely to Real Time Email alert followership. Call it the "Sentiment Contra Index" and get one of the vendors to create an ETF off it.

     

    Could be a winner

     

    P
    27 May 2013, 09:35 AM Reply Like
  • wyostocks
    , contributor
    Comments (7699) | Send Message
     
    Following the whales can be very risky because when they decide they have bid up the stocks to happy point, the little guys are left holding the bag when they sell out their positions.
    27 May 2013, 10:16 AM Reply Like
  • hjacobs
    , contributor
    Comments (2) | Send Message
     
    cbs will soar when it readies spinoff for its outdoor advertising REIT.
    27 May 2013, 10:22 AM Reply Like
  • deercreekvols
    , contributor
    Comments (5208) | Send Message
     
    What do hedge funds have that SA readers don't?
    1. HFT ability
    2. Billions of dollars to trade with
    3. Inside information (how many individual investors are charged with this crime?)
    4. The ability to have media like SA report their "Buys" and "Sells," which in many cases move the stock
    5. Political connections
    6. Lawmakers in their back pocket
    7. The ability to lose everything and walk away without any charges being filed (see MF Global)
    8. Managers who earn a huge salary for running said HF
    9. Billions of dollars to trade with (did I say this already?)
    10. The ability to underperform many individual investors and still get people to pump cash into them

     

    Just my Top 10...I may be wrong, but I doubt it.
    27 May 2013, 10:42 AM Reply Like
  • wyostocks
    , contributor
    Comments (7699) | Send Message
     
    deercreek
    Great list, I also doubt that your list is wrong.
    Enjoy the day.
    27 May 2013, 12:28 PM Reply Like
  • deercreekvols
    , contributor
    Comments (5208) | Send Message
     
    wyostocks,

     

    Thank you. Enjoy your day as well.
    Grill is hot, beer is cold, and steaks are ready.
    27 May 2013, 04:19 PM Reply Like
  • Coolbluelake
    , contributor
    Comments (544) | Send Message
     
    Politicians, as mentioned above, are allowed to trade on their insider information, legally. Go figure.
    28 May 2013, 10:01 AM Reply Like
  • Bigsmitty
    , contributor
    Comments (116) | Send Message
     
    You listed 5 stocks with a very light following. Three of them do not pay a dividend and the other two pay 1% or less. This might have something to do with how many people follow the stocks. Also, there isn't a day goes by that Google, Apple, and JPMorgan don't hog the news stories. Smitty
    27 May 2013, 11:19 AM Reply Like
  • wheelz23
    , contributor
    Comments (50) | Send Message
     
    who cares what their top 20 holdings have done. the end result is all that matters.
    27 May 2013, 03:09 PM Reply Like
  • Ted Bear
    , contributor
    Comments (583) | Send Message
     
    Aside from what the hedgies are doing, is there a more widely followed stock in the world than Apple? And have the 'analysyts' EVER come even remotely close to guestimating sales and earnngs? Usually they miss by at least a factor of 33%, and many times it is even worse. No wonder the hedgies have a field day with these things, given the Top Ten LIst above, which hits the nail pretty squarely on the head. Thousands of so called 'invesmnet managers' out there, and yet a handful of 'little guys' seem to have a length on the field every time. Ever wonder how that happens?>
    27 May 2013, 03:24 PM Reply Like
  • Devlin McGregor
    , contributor
    Comments (103) | Send Message
     
    Looking at hedge fund performance for the last five years, I could really care less what they think.

     

    Most Hedge Funds Underperforming The S&P 500 For Fifth Year In A Row - Full YTD Performance - Zero Hedge (March 15, 2013)
    27 May 2013, 06:09 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3080) | Send Message
     
    The hedge funds do not always beat the market, nor do they always beat individual investors. Sometimes luck is a factor, but as stated above, throwing around huge sums for block purchases does have a way of influencing trends. Of course many hedge funds also hold the big name companies.

     

    Individual readers on Seeking Alpha appear to prefer tech stocks to other sectors. While there is potential for a tech company to go through sudden moves, and the possibility of making large returns based upon those moves, they are not always the best way to invest. Some investors will do well with a heavy technology bias, at least for a while, but more "boring" companies in other sectors can give more stable returns. Small caps are perceived as higher risk, though sometimes a gem can be found there.

     

    Sometimes the tortoise, and sometimes the hare. Meanwhile, I'm just along for the ride. Hopefully I get on the right train most of the time, and hopefully I don't end up in a train wreck.
    27 May 2013, 06:13 PM Reply Like
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