It's 13F season, where hedge funds with at least $100M in assets under management disclose their holdings. The flurry of filings give investors are chance to see what they bought and sold during the quarter, including long positions, call and put options, though shorts aren't on the statements. Besides detailing where the "smart money" is being put to work, some may seek out vulnerabilities they can profit from... remember last year's GameStop saga? It all started when a Reddit user flagged Melvin Capital's heavy puts on GME, which eventually spiraled into the notorious short-squeeze enabled by WallStreetBets.
Where are the big guys putting their money? With the form required to be filed within 45 days of the end of a calendar quarter, hedge funds usually wait until the last minute to publish their holdings as not to let the public know what they are doing. Check out some of the top headlines on Seeking Alpha:
While the transactions can be helpful, it's important to remember that 13Fs don't tell the whole story about what funds are doing. As noted above, bearish bets like short-selling are not included on the statement, so visible long core holdings could actually be hedges against those positions. In some instances, the reports can also reflect investment decisions made months ago, since they are only filed up to 45 days after the quarter is complete.
Case in point: Warren Buffett's Berkshire Hathaway (BRK.A, BRK.B) purchased a nearly $1B stake in Activision Blizzard (NASDAQ:ATVI) during Q4 as shares were beat down from the "frat boy culture" lawsuit filed by the California Department of Fair Employment and Housing. The stock fell to as low as $56, before Microsoft (NASDAQ:MSFT) announced its intent in mid-January to acquire the game developer for $95 per share. At Activision's closing share price of $81.50 on Monday, Berkshire's stake would be worth almost $1.2B - a solid profit, but who knows if the conglomerate is still holding the position?