Before commenting on a bunch of 13f quarterlies by money managers, I’ll state my own construct which proved too conservative. The market was pitiless on earnings shortfalls, but many tech houses fared well. I’m thinking of, Google, Meta, Amazon, Microsoft, Netflix, Nvidia, et al.
Scared bulls like me barely held their own in this super-charged setting. The market we’re in demands enormous courage and conviction. It’s easy to get shaken out in a free falling situation. I’m going to visit the Wizard of Oz again and get me his courage medallion.
Heroic results are few and far between. Buy and hold was a better strategy than buy-hold-sell in an effort to control volatility and limit fresh mistakes.
Buffett halved his enormous Apple position and sits now with huge cash reserves. What nobody seems to remember is there were successive years when BRK/B underperformed its peers.
A decade ago, 49% of Warren’s portfolio comprised 3 stocks: Wells Fargo, Coca-Cola and American Express. IBM was fourth at a 12% weighting. Today, 24% of his assets rest in a bank, namely Wells Fargo. In retrospect, no bank will ever get more than 5% of my assets. After all, banks have a way of screwing up.
I turned then to T. Rowe Price, the growth stock operator who has been around forever. Little turnover, 4.9%. Microsoft still numero uno at 7% of assets. Apple is third at 5.7%. This growth stock player is unlikely to ever change its spots.
When I tuned to Third Point, an $8.3 billion operator, I saw the typical growth stock construct in a much higher stock turnover setting. Its static ratio was a high 44%. Almost 25% of assets dwelled in 3 stocks: Amazon, Microsoft and Meta Platforms. Curiously, a broad based utility is a 10% position here. The remainder of assets are diversified, but fail to see any major theme of note.
When I turned to Tiger Global Management, now a $21 billion fund, I was surprised to see such a high turnover with its static ratio at 72%. Few operators come close to such a high ratio.
Meta Platforms, Microsoft and Alphabet comprise over a third of Tiger’s asset base. I run my own money this way, but I don’t need to report to shareholders or even my wife and kids. They’d take me out to be shot if I screwed up.
I see more and more commonality in growth names. The Appaloosa LP is a very similar construct to Tiger with its $6 billion asset base. The exception here is Alibaba, a 12% holding, followed by Amazon at 10%. This is a live by the sword, die by the sword attitude. Their static ratio is at 5%. Seems they already claimed their courage medal from the wizard.
One of my favorites is Pershing Square because they are fundamentalists with the courage to take major positions and ride ‘em out. Their static ratio is comparatively low at 11%. Canadian Pacific’s the sole industrial here. Maybe Howard Hughs.
Food service is a major theme here with major positions in Hilton Worldwide, Chipotle Mexican and Restaurant Brand as major holdings. A very individualistic portfolio that can take you far. I like their discipline.
To sum up, I was underwhelmed and disappointed not to see much change in asset allocation and stock selection. Static ratios rested pretty stable. Nobody ran for the exits. Buffett's reallocation of assets hardly created a ripple or even drew more than perfunctory remarks.
For me, elevation of the S&P 500 is too rich. My courage level needs replenishing. I’m now heavy in financials because of their potential resilience. But, they need a zippy GDP setting to make hay in the sunshine.
What didn’t I uncover? Nobody put more money in super growthies. Financials got no play and there was no interest in typical GDP stocks like rails, autos, steel, copper and aluminum, the Heartland’s show of starched white collars.
Nobody owns GDP paper. I’m stocking up.
Luck and pesetas to all.
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