Feeling a little contrarian today? Seth Klarman is, and he is buying some beaten down SLM with a full third of his portfolio. . .
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 was the worst performer at -27%.
QCOM (5)
AMX (4)
AXP (3)
MA (3)
MSFT (3)
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 was the worst performer at -40%. (Since AMX and QCOM are repeats, I took the next two stocks - SWN and MA.):
AMX
BBBY
CA
CVA
CVS
DISCA
GOOG
HLX
HPQ
KO
MA
MCO
NWS
ORCL
QCOM
ROST
SLM
SWN
TGT
WFC
----
Baupost Group
Wow. A full third of Klarman's portfolio is in SLM. When one of the best investors on the planet has this sort conviction, that is good enough for me.
