13F Quarterlies A Huge Mish-Mash

Well, Berkshire did peel off 2% of its Apple position. This is probably the beginning of a slow unwinding. Meantime, financials, like American Express and Bank America, comprise 18% of assets, nearly fixtures along with Coca-Cola. The positions in Occidental Petroleum and Chevron leave me cold and indifferent.

The Street’s mistake is lumping in Berkshire with traditional money managers. My insight is Buffett really isn’t a money manager. He’s a money maker who disdains all the yardsticks of B school portfolio management: Bond-equity ratios, price-earnings ratios, book value, and asset diversification. 

Turn to a typical wealth manager like JP Morgan and you’ll see a pie chart construct of 60% equities, 40% fixed income properties covering all their trillions under management. You’ll never see Morgan grossly overweight a specific stock or industry sector. The NASDAQ 100 is pretty much ignored. Wealthy families who acquired their assets in their business do believe they are receiving sound conservative money management, but this seems like a myth to me.

Wealthy families made their fortunes elsewhere, not in financial markets. They settle for so-called conservative wealth management, but rarely outperform.

A horse of a different color, Citadel Advisors, nearly a hundred billion house is broadly diversified. Most positions rest under 1%. Nvidia, Microsoft and Amazon tot upto just 4.4% of assets. By comparison, I hold a 14% position in Microsoft and 10% in Amazon. This is my construct of a live by the sword, die by the sword operator. Like Buffett, I choose to make money, not over diversify my assets. Let widows and orphans diversify and stagnate for decades.

When I turned to Appaloosa, a $5 billion house, you see pretty much tech combined with a couple of low priced plays like Macy’s, Energy Transfer, and Caesar’s Entertainment. There is a low static ratio, 23%.  Top three positions, Meta Platforms, Microsoft and Amazon comprise one-third of assets. This is a look alive house with plenty of courage. 

Finally, we get to a non-tech portfolio, namely Elliott Investment Management with $9 billion on the line. I’m seeing Triple Flag,  Marathon Petroleum and Pinterest comprising half of assets. I can’t relate to Triple Flag because it’s totally outside my zone. 

Generally, I’m not seeing any serious overweights in good acting groups like healthcare, or even in banks, which produced snappy results past few months. Why did most of us miss Eli Lilly and UnitedHealth? Glenview Capital came close with serious weighting in CIGNA and Tenet Healthcare at 14% of assets. Amazon and Meta are modest holdings. 

Happy to see Carl Icahn’s forever marching to his own drum beat. In his company, Icahn Enterprises which is basically energy specs you and I know nothing about. If you believe oil futures will take off, energy stocks could break out. As yet, I’m not a believer. My scenario is for a soft economy. Non durables and health care remain buoyant. Contrast Carl with Warren Buffett who owns huge positions in a couple of big cap properties like Chevron and Occidental Petroleum, They remain so far in a trading range. 

Big contrast, Lone Pine Capital at $165 billion has sunk a third of its capital in five tech houses. Namely, Meta, Amazon, Taiwan Semiconductor, Microsoft, and Salesforce. I can’t raise my eyebrows here, the pattern is too familiar.

What I’m seeing so far is few operators brought home big winners like Eli Lilly, Netflix, and Microsoft. Nobody chose to get involved with rank specs like Macy’s, American Airlines, even Ford.

Millennium Management is a house of $109 billion which turned over this huge amount of assets nearly 100%. Are they making themselves or their brokers rich? Microsoft, Amazon, Apple, and Nvidia comprised just 5% of investments. I do see Eli Lilly at .4% of assets so it doesn’t even matter. They own all the growthies but in half percentage points. Is this just a giant market arbitrage  or what? 

I finally did find a house: Paulson & Co. with nearly half its assets in pharma and a low turnover ratio. They like gold plays, too. Far away from tech holdings as is possible. This billion dollar house shows courage but, they don’t make love in the primary position. I recognize few of the names.

Pershing Square is a $10 billion stock pickers fund, heavy in half a dozen positions like Chipotle Mexican and Restaurant Brand. Long cycle players who have done their homework.

Soros Fund Management holds $5 billion but name recognition is difficult. What is Splunk, Novo, Nordisk and Aercap Holdings? Is George active here or some 25 year-old prodigy? I recognize a few names like Alphabet, Amazon and Las Vegas Sands but all minimal positions.  Low static ratio suggests this is a trading kind of fund. No interest. 

Let’s end with Renaissance Technology, another trading house with most positions under 1% of assets. I assume they are computer driven minute-to-minute. Then arbitrage, must focus on good acting and bad acting pieces of paper. I’m happier as a ploding analyst getting to know management’s and specific industry metrics.

Let JP Morgan and its ilk build pie charts, 60% equities, 40% bonds. Throw in broadly based diversification and you have traditional money management blessed by every B School in the world, but no guarantee of good performances.

Keep repeating to yourself: “I want to be a money maker, not a money manager.”