Holiday Gift Ideas: Financial Edition

Last week, we highlighted some Holiday Sales & Deals (Financial Edition) on some bargains for investors and traders. This week, we're turning our focus to a Holiday Wishlist: Financial Edition. With the holidays upon us, we figured it'd be a good idea to toss out some good gift ideas for that savvy investor or trader your know. Or, just for yourself hah.

To the list!

Trading Hardware/Software

• Samsung SyncMaster 2253BW 22-inch LCD Monitor. If you're in the markets, you can never have enough screen real-estate for charts, 10Q's, streaming quotes... you name it. Samsung are some of the best screens out there and this 22-inch monitor will get the job done for you. Heck, pick up two of them for the dual-screen setup. (Or, if you need even bigger, go with the Samsung 24-inch LCD Monitor). Dual or Tri-screen is the way to go, I'm telling you. I know I'll never go back to just one monitor.
• Asus Eee Netbook for checking up on the market while you're on the road. Full specs: Asus Eee PC 900HA 8.9 inch Netbook (1.6 GHz Intel ATOM N270 Processor, 1 GB Ram, 160 GB Hard Drive, Windows XP Home) Color: Black.
• Apple MacBook Air for those who prefer Apple. Check the markets while travelling with this ultra-lightweight laptop. Full Specs: 13.3 Inch, 1.6 GHz Intel Core2Duo Processor, 2 GB Ram, 80 GB Hard Drive, Color: Silver.
• Blackberry Storm. Keep up with the markets with the new touchscreen Blackberry. Or, if you're not a fan of touchscreens, then go with the all-new Blackberry Bold.
  
• TradingSolutions technical analysis. Advanced technical analysis trading software for all you traders out there.
  

Books

• Amazon's Kindle: Wireless Reading Device. You could buy all the physical books listed below... or you could just buy the Kindle and take all your books with you wirelessly on one device. Kindle has been getting rave reviews and simplifies your investing & trading bookshelf into one simple device that stores all your books.
  
• When Markets Collide by Mohamed El-Erian. This book written by PIMCO head El-Erian discusses the current fundamental changes going on in the global economy and financial markets/systems. Also, this book recently won the Business Book of the Year for 2008.
• Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor by Seth Klarman. This is written by hedge fund manager Seth Klarman, who runs Baupost Group. Definitely a great read that not every investor has on their bookshelf.
• Market Wizards by Jack D. Schwager. If you or someone you know wants to learn from some of the best in the markets, then this is the book for you. Top traders and hedge fund managers discuss topics such as discipline, risk management, consistency, and capital preservation among others.
• Fooling Some of the People All of the Time: A Long Short Story by David Einhorn. This book gives you an inside perspective as to how hedge fund Greenlight Capital constructs and researches their investment theses and we highly recommend it.
• Confessions of a Street Addict by Jim Cramer. Say what you will about Cramer's antics, but this book gives unique insight into the time at his hedge fund.
• The Snowball: Warren Buffett and the Business of Life. The account of Warren Buffett's life, as written by his hand-selected biographer Alice Schroeder.
  

Newspapers

• The Wall Street Journal for 75% off. This is a great idea because it is on sale and its a good gift for someone constantly around the markets! (Or Wall Street Journal Europe for our European readers).
  
• The same applies for $60 off Investors Business Daily. Great deal and a great gift idea.

Magazines

• Hedge Fund and Investment Technology. 12 month subscription with 12 issues. News and analysis of everything shaping the industry.
• Hedge Fund Manager Magazine: 40 issues over 12 months discussing all the essentials to running a hedge fund.
  
• Hedge Fund Journal. 10 issues over 12 months
  
• The Economist. A 12 month subscription (51 issues) to a great magazine, that's all there is to it.
• Forbes. 26 issues over 12 months. A mainstay financial read.
  

DVDs / Bluray

• Wall Street (20th Anniversary Edition) DVD. "Greed is good." THE movie for anyone involved in the markets. Period. Michael Douglas, Charlie Sheen, and more.
• Wall Street (on Bluray). Same as above, but in high definition.
• Wall Street Warriors Season 1 (TV Show) DVD. Reality show detailing the lives of various people on Wall Street, including Timothy Sykes.
• Wall Street Warriors Season 2 (TV Show) DVD. Second season of the reality show... this time following new people around the markets.
• Charlie Rose - Crisis on Wall Street DVD (September 2008).
  

Also, if you missed them, make sure to check out our post on Holiday Deals: Financial Edition, and our Investing & Trading Recommended Reading List for some more gift ideas.

Former Federal Reserve Chairman Paul Volcker Video

Former Federal Reserve Chairman Paul Volcker sat down to talk with Charlie Rose back in March. I had missed this video and wanted to pass it on. Volcker is easily one of the few individuals who has been speaking any kind of sense throughout all of this. And, we thought it was appropriate to refresh people's memories, seeing how he will play a role on Obama's economic team.

Hedge Fund Tracking: Daniel Loeb's Third Point - 13F Filing Q3 2008

This is the 3rd Quarter 2008 edition of our ongoing hedge fund tracking series. Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here. We've already covered Timothy Barakett's Atticus Capital,Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Bret Barakett's Tremblant Capital, John Paulson's Paulson & Co, and David Einhorn's Greenlight Capital. We've also already covered a few of the 'Tiger Cub' portfolios in our hedge fund tracking series, including Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, and John Griffin's Blue Ridge Capital, and Andreas Halvorsen's Viking Global. Next up, we have Daniel Loeb's Third Point LLC. Third Point is a $4.5 billion activist and value based hedge fund. While Third Point is technically an activist fund, Loeb often has numerous passive investments as well. Loeb's firm was -10.3% for October and is now -26.9% year-to-date, which we noted in our October hedge fund performance update. Before beginning, its probably worthwhile to see Third Point's 2nd quarter portfolio update, so you can get a sense as to what positions they're building as core holdings.

The following were Third Point's long equity, note, and options holdings as of September 30th, 2008 as filed with the SEC.


New Positions (Brand new positions that they initiated in the last quarter):
Dr Pepper Snapple (DPS)
Lorillard (LO)
Anheuser Busch (BUD)
Rohm & Haas (ROH)
CVS Caremark (CVS)
Hewlett Packard (HPQ)
Wendys (WEN)
Epicor Software (EPIC)
UST (UST)
Verigy (VRGY)
Dineequity (DIN)
Merrill Lynch (MER)
Heckmann Corp WTS (HEK-WS)
Epicor Software Corp (EPIC) 2.375% Note 5/1
Heckmann Corp (HEK)
Amedisys Inc (AMED) Puts
EDCI Holdings (EDCI)
Stream Global (OOO-WS)
JB Hunt (JBHT)
Avi Biopharma (AVII)
Citigroup (C) Puts


Added to (Positions they already owned but added shares to)
Orient Express Hotels (OEH): Increased by 242%
Telephone and Data (TDS): Increased by 168%
Tibco Software (TIBX): Increased by 103%
Teradata (TDC): Increased by 74%
Phoenix Companies (PNX): Increased by 58%
Exco Resources (XCO): Increased by 49%
Target (TGT): Increased by 19%


Some Reduced Positions (Positions they sold some shares of - note not all sales listed)
Covidien (COV): Reduced position by 67%
Enpro (NPO): Reduced position by 55%
Plains Exploration (PXP): Reduced position by 44%
Time Warner (TWX): Reduced position by 44%
Meadwestvaco (MWV): Reduced position by 42%
GLG Partners (GLG): Reduced position by 36%
American Eagle Outfitters (AEO): Reduced position by 35%
Leap Wireless (LEAP): Reduced position by 31%
Flow International (FLOW): Reduced position by 15.6%


Removed Positions (Positions they sold out of completely)
Mastercard (MA)
Clear Channel (CCO)
Questar (STR)
Microsoft (MSFT)
BHP Billiton (BHP)
Energy XXI (EXXI)
Public Service Enterprise (PEG)
AK Steel (AKS)
Sandridge (SD)
St Mary Land & Exploration (SM)
Petrohawk (HK)
Chesapeake (CHK)
Cabot (COG)
Canadian Natural Resources (CNQ)
Petroleo Brasileiro (PBR)
Horsehead (ZINC)
Safeway (SWY)
Global BPO Services Corp (OOO.U)
Comstock (CRK)
XTO Energy (XTO)
Starwood (HOT)
Orion Marine (OMGI)
American Superconductor (AMSC)
Sirf Technology (SIRF)
Motorcar Parts (MPAA)
Abraxas Petroleum (AXAS)
Nustar Group (NSH)
Loral Space and Comm (LORL)
Entertainment Dist Co
Massey Energy (MEE)


Top 20 Holdings (by % of portfolio)

1. Exco (XCO): 6.6% of portfolio
2. Dr Pepper Snapple (DPS): 5.4% of portfolio
3. Phoenix Companies (PNX): 5% of portfolio
4. Plains Exploration (PXP): 4.9% of portfolio
5. Lorillard (LO): 4.7% of portfolio
6. Teradata (TDC): 4.7% of portfolio
7. Leap Wireless (LEAP): 4.1% of portfolio
8. Time Warner (TWX): 3.8% of portfolio
9. Tibco Software (TIBX): 3.3% of portfolio
10. SPDR S&P 500 (SPY): 3.2% of portfolio
11. Anheuser Busch (BUD): 3.1% of portfolio
12. Telephone and Data (TDS): 3% of portfolio
13. American Eagle (AEO): 3% of portfolio
14. Rohm & Haas (ROH): 2.96% of portfolio
15. Liberty Acq Holdings (LIA-U): 2.95% of portfolio
16. Thompson Creek Metals (TC): 2.5% of portfolio
17. Orient Express Hotels (OEH): 2.2% of portfolio
18. Meadwestvaco (MWV): 2% of portfolio
19. CVS Caremark (CVS): 2% of portfolio
20. Nabi Biopharma (NABI): 1.9% of portfolio

Assets from the collective holdings above were $3.89 billion last quarter and were $1.66 billion this quarter. Numerous funds we track are now showing holdings in Lorillard (LO), including Lone Pine Capital and Maverick Capital. Additionally, Third Point is now the third value oriented fund we've seen in Teradata (TDC). Stephen Mandel's Lone Pine has a sizable position in TDC, as does David Einhorn's Greenlight Capital. Another point of interest is Loeb selling completely out of Mastercard (MA), while legendary investor Julian Robertson was recently buying MA. Lastly, Loeb joins hedge fund Paulson & Co in arbitrage plays such as ROH and BUD. Please note that we have not detailed every single change to every single position in this update, but we have covered all the major moves. Also, keep in mind that these filings only include long equity, notes, and options holdings and do not reflect the cash or short portions of their portfolio. This is just one of many funds in our hedge fund tracking series in which we're tracking 35+ prominent funds. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, Timothy Barakett's Atticus Capital, John Griffin's Blue Ridge Capital, Bret Barakett's Tremblant Capital, Andreas Halvorsen's Viking Global, John Paulson's Paulson & Co and David Einhorn's Greenlight Capital. Overall, its been one of the worst years ever for hedge funds, as we noted in our recent October hedge fund performance update. Thus, the recent moves they've made in their portfolios become all the more interesting given the way the market has played out.

More on Loeb & Third Point:
- Third Point's 2nd quarter portfolio update
- October hedge fund performance update
- Hedge Fund Rankings

Consumer Savings Rate to Rise

The Economist has a great piece out about how the overleveraged American Consumer of recent memory is going to quietly take a backseat to the saving oriented consumer of decades past. Why? Well, because they will have to. The recession obviously has a negative impact on spending power and we've written numerous times about this current/upcoming phenomenon. Firstly, the decline in housing prices and the increase in the unemployment rate will obviously have a negative effect on the economy and in turn the consumer. Visa's consumer trends have already started to show this. Secondly, as these consumers find themselves struggling to get by, we'll notice that credit card debt will rise and we'll get a credit card squeeze. This, along with a ton of auto loan exposure has been the macro thesis behind shorting Capital One (COF). Add in the fact that they are continually seeing rising charge-offs and delinquencies and it's not a pretty picture. Lastly, add in the fact that many Americans have suffered from the destruction of wealth due to a horrible year in the stock markets.

All of the above plays right into our theme of shorting discretionary retailers and going long the "cheapest of the cheap" in consumer plays. The only retailers we want to be long in this environment are McDonald's (MCD) and Walmart (WMT). MCD makes sense because they provide cheap and easy food. When people are short on cash, that dollar menu goes a long way. WMT benefits from a similar thesis. When you're buying groceries, toiletries, you name it... Walmart has it and at the cheapest prices. Not to mention, they've got the Sam's club warehouse as well, playing right into our 'cheap' theme. As far as shorting discretionary retail goes, you can really take your pick. Whether it be casual dining chains, jewelry stores, or any leveraged consumer play, you have plenty of options. Or, you could just short the RTH retail index and then go long a select few retailers as a hedge. Consumers are/will be in a pinch for a few months to come and that's how you play it.

Now, take all the aforementioned facts and then add in this commentary from The Economist and you'll notice that a shift is coming. They write,

"On average, consumers from 1950 to 1985 saved 9% of their disposable income. That saving rate then steadily declined, to around zero earlier this year (see chart). At the same time, consumer and mortgage debts rose to 127% of disposable income, from 77% in 1990. Those forces have now reversed. The stockmarket has fallen to the levels of a decade ago. House values have fallen 18% since their peak in 2006. Banks and other lenders have tightened lending standards on all types of consumer loans. As a consequence, consumer spending fell at a 3.1% annual rate in the third quarter (in part because tax rebates boosted spending in the second), the steepest since the second quarter of 1980 when Jimmy Carter briefly imposed credit controls. More such declines are likely to follow. Richard Berner of Morgan Stanley projects that in the 12 months up to the second quarter of next year real consumer spending will fall by 1.6%—a post-war record. “The golden age of spending for the American consumer has ended and a new age of thrift likely has begun,” he says."

Lastly, take a look at this powerful chart. Personal savings has been in a steady downtrend ever since the '90s. Household debt, on the other hand, has almost doubled since the '90s. Something's got to give.

(click to enlarge)

Source: The Economist

Hedge Fund Tracking: David Einhorn's Greenlight Capital - 13F Filing Q3 2008

Next up, we have David Einhorn's Greenlight Capital. This is the 3rd Quarter 2008 edition of our ongoing hedge fund tracking series. Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here. We've already covered Timothy Barakett's Atticus Capital,Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Bret Barakett's Tremblant Capital, and John Paulson's Paulson & Co. Greenlight is a $6 billion fund ran by David Einhorn and has seen annual returns of over 25%. Greenlight specializes in spin-offs and value investing. Einhorn's name has been popping up in the media a lot over the past year, as he talked about his well documented short position in Lehman Brothers (LEH). And, while that position paid off handsomely for him, it barely offset losses he experienced from other positions. Einhorn was -13% for October and is now -26% year-to-date, as noted in our October hedge fund performance numbers post. Einhorn has also recently detailed the saga between his fund and Allied Capital, a company he shorted, in his book Fooling Some of the People All of the Time: A Long Short Story. It gives you an inside perspective as to how Greenlight constructs and researches their investment theses and we highly recommend it.

We track David Einhorn's Greenlight Capital due to their value investing orientation. Greenlight's approach is slightly different than some of the 'Tiger Cub' progeny funds we track. Although both are value oriented, Greenlight approaches things slightly differently by identifying mispricings in the markets and going from there. We've already covered a few other 'Tiger Cub' portfolios in our hedge fund tracking series, including Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, and John Griffin's Blue Ridge Capital, and Andreas Halvorsen's Viking Global. We've tracked those and many other funds' performance in our October hedge fund performance. You can also check out Greenlight's 2nd quarter portfolio update here.

The following were Greenlight's long equity, note, and options holdings as of September 30th, 2008 as filed with the SEC.


New Positions (Brand new positions that they initiated in the last quarter):
EMC Corp (EMC)
Kinross Gold (KGC)
Mercer International (MERC) 8.5% Note
TicketMaster (TKTM)
Pomeroy IT (PMRY)


Added to (Positions they already owned but added shares to)
Republic Airways (RJET): Increased position by 80%
Dr Pepper Snapple (DPS): Increased position by 30%
Helix Energy (HLX): Increased position by 30%
Echostar (SATS): Increased position by 9%
Teradata (TDC): Increased position by 4%


Some Reduced Positions (Positions they sold some shares of - note not all sales listed)
Ameriprise Financial (AMP): Decreased position by 83%
MDC Holdings (MDC): Decreased position by 82%
Target (TGT): Decreased position by 49%
Mercer International (MERC): Decreased position by 43%
Guaranty Financial (GFG): Decreased position by 14%


Removed Positions (Positions they sold out of completely)
Microsoft (MSFT)
HSBC (HBC) Puts
Patriot Coal (PCX)
Covidien (COV)
Walgreens (WAG)
Wellpoint (WLP)
UnitedHealth (UNH)
Lehman Bros (LEHMQ) Puts
Verasun Energy (VSUNQ)
Tyco (TEL)
Sears (SHLD)


Top 20 Holdings (by % of portfolio)

1. Dr Pepper Snapple (DPS): 17.5% of portfolio
2. Helix Energy (HLX): 15% of portfolio
3. Target (TGT): 12% of portfolio
4. Einstein Noah (BAGL): 7.5% of portfolio
5. MI Developments (MIM): 6.5% of portfolio
6. Health Management (HMA): 6.4% of portfolio
7. URS Corp (URS): 6.4% of portfolio
8. Teradata (TDC): 5% of portfolio
9. Echostar (SATS): 3.5% of portfolio
10. Ameriprise (AMP): 2.9% of portfolio
11. Employers Holdings (EIG): 2.8% of portfolio
12. MDC Holdings (MDC): 2% of portfolio
13. Fifth Street Finance (FSC): 1.6% of portfolio
14. EMC (EMC): 1.5% of portfolio
15. Triple S Mgmt (GTS): 1.3% of portfolio
16. Kinross Gold (KGC): 1.3% of portfolio
17. Republic Airways (RJET): 1.2% of portfolio
18. Dana Holding (DAN): 1.2% of portfolio
19. Mercer International (MERC) 8.5% Note: 0.8% of portfolio
20. Guaranty Financial (GFG): 0.7% of portfolio

Assets from the collective holdings above were $2.7 billion last quarter and were $1.4 billion this quarter. Interesting to note that Greenlight is yet another fund we've seen sell out of Sears (SHLD). Bill Ackman's Pershing Square recently sold practically all of their SHLD. Additionally, Greenlight is now the second value oriented fund we've seen in Teradata (TDC). Stephen Mandel's Lone Pine has a sizable position in TDC as well. Please note that we have not detailed every single change to every single position in this update, but we have covered all the major moves. Also, keep in mind that these filings only include long equity, notes, and options holdings and do not reflect the cash or short portions of their portfolio. This is just one of many funds in our hedge fund tracking series in which we're tracking 35+ prominent funds. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, Timothy Barakett's Atticus Capital, John Griffin's Blue Ridge Capital, Bret Barakett's Tremblant Capital, Andreas Halvorsen's Viking Global, and John Paulson's Paulson & Co. Overall, its been one of the worst years ever for hedge funds, as we noted in our recent October hedge fund performance update. Thus, the recent moves they've made in their portfolios become all the more interesting given the way the market has played out.

More on Einhorn & Greenlight:
- Greenlight's 2nd quarter portfolio update
- October hedge fund performance update
- Hedge Fund Rankings

Tudor Investment Corp Halts Withdrawals From BVI Global Fund

Paul Tudor Jones' Tudor Investment Corp has temporarily frozen withdrawals from its $10 billion flagship BVI Global Fund. The global macro fund has found it tough to put a value on certain assets that don't really have a liquid market right now, namely corporate bonds and emerging market loans (about 29% of fund assets currently). So, in a move contemplated by many investment banks months earlier, Tudor is aiming to split his BVI Fund into two funds: The BVI Fund which will trade liquid securities such as stocks and currencies, and then the new Legacy fund which will house all the illiquid assets.

BVI Global is down 5% year-to-date. And, although Tudor is upset with his fund's performance, they are holding in there nicely, all things considered. Tudor also revealed that investors had asked to withdraw 14% of capital from the fund. This just goes to show that funds that haven't even been beaten down that bad are facing redemptions as well. People just need cash, badly.

Taken from Bloomberg,

"BVI Global, which has posted average annual returns of as much as 22 percent since inception, will focus on macro investing, a strategy that seeks to profit from broad economic trends by trading stocks, bonds and other securities.

As of Oct. 31, the fund had 62 percent of assets in macro investments, while 30 percent was in equity strategies and 8 percent was in credit, event-driven and fixed-income arbitrage trades, according to an October client letter.

The firm’s Tensor Fund Ltd., which manages about $1 billion, returned about 34 percent this year through Nov. 19, while Tudor Futures, managed by Jones, gained 21 percent, according to a person familiar with the firm."

Also worth noting is the fact that Tudor's equities focused fund, Raptor, is down 16.5% year-to-date. That fund is run by James Pallotta, who will be leaving Tudor to start his own fund.

You can read Paul Tudor Jones' recent letter to investors here.

T2 Partners' Whitney Tilson Bullish on Berkshire Hathaway (BRK.A)

Hedge fund manager Whitney Tilson was recently on CNBC's Fast Money to discuss Berkshire Hathaway's derivative exposure. Tilson is a deep value investor and you can bet he is very bullish on BRK.A/BRK.B at these levels. If you missed it, we've covered T2 Partners' recent portfolio updates in our hedge fund tracking series. Here's the video:




Additionally, in a recent email, Tilson pointed out another bullish signal on Berkshire: insider selling. Wait... what?!? Charlie Munger, in a recent SEC Filing, disclosed he sold 13% of his BRK.A shares. But, if you read the fine print of the filing, this sale was actually a bullish bet on Munger's part, as Whitney describes,

"If you read footnote 3 of the filing ("This Form 4 is being filed to report a private sale of shares of Class A Common Stock to family members, in exchange for a promissory note."), you'll understand that precisely the opposite is true: he sold them to a family member in exchange for a promissory note. In other words, he found the stock so cheap that he decided to pass the stock along this way -- and pay taxes on the gains this year! -- rather than through his will. It would be hard to find a stronger statement of how cheap he thinks the stock is -- he must believe $77,500 is the lowest basis he will ever see again."

Simply put, Tilson (and many others) are bullish on BRK.A/BRK.B at these levels.

Berkshire Hathaway Shareholder Letters

Someone asked me the other day where to find all the various letters written by Buffett and company. So, I figured I'd post up the link for everyone who is curious or who has not read them. Read them here.

Hedge Fund Tracking: Andreas Halvorsen's Viking Global - 13F Filing 3rd Quarter 2008

Next up, we have Andreas Halvorsen's Viking Global. This is the 3rd Quarter 2008 edition of our ongoing hedge fund tracking series. Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here. We're aiming to cover 35 or so prominent funds this time around and we'll be releasing the 13f analysis of each individual fund here in the coming weeks. We've already covered Timothy Barakett's Atticus Capital,Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bret Barakett's Tremblant Capital, Bill Ackman's Pershing Square, and John Paulson's Paulson & Co.

Andreas Halvorsen is one of the many 'Tiger Cub' fund managers we cover here on the blog. 'Tiger Cubs' are the progeny of legendary investor and hedge fund manager Julian Robertson of Tiger Management. Many of the critical members of Tiger started their own funds, and Halvorsen is no different. We've already covered a few other 'Tiger Cub' portfolios in our hedge fund tracking series, including Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, and John Griffin's Blue Ridge Capital. Although both Andreas Halvorsen of Viking Global and Stephen Mandel Jr. of Lone Pine Capital both learned the tricks of the trade under Robertson in their time at Tiger Management, both have taken what they've learned and added their own spice to the value oriented, yet growth at a reasonable price (G.A.R.P.) tolerable investment style. Halvorsen attended Williams College and received his MBA from Stanford, while his work history includes stays at Morgan Stanley and Tiger.

Viking employs a fundamental strategy, using a bottom-up process to pick stocks. Viking's Global Equities III Fund was -1.10% for October and is -2.41% ytd. Their Global Equities LP is -3.92% for the year and was down 1.10% in October. Andreas Halvorsen and company seem to be faring alright this year, all things considered. You can view their month by month performance breakdown here. Also, in our October hedge fund performance update, we've listed the performance figures of numerous other funds. In Alpha's latest hedge fund rankings, Viking was ranked #70 in the world. You can view their Q3 investor letter here in .pdf format.

The following were Viking's long equity and options holdings as of September 30th, 2008 as filed with the SEC.


New Positions (Brand new positions that they initiated in the last quarter):
Visa (V)
Verisign (VRSN)
Quest Diagnostics (DGX)
Alliance Data (ADS)
Beckman Coulter (BEC)
Harley Davidson (HOG)
Blackrock (BLK)
Coach (COH)
Autodesk (ADSK)
Franklin Resources (BEN)
Expedia (EXPE)
Thor Industries (THO)
National City (NCC)
Herbalife (HLF)
AvalonBay (AVB)
Stanley Works (SWK)
Whitney Holding (WTNY)
Charles River Labs (CRL)
Glacier Bancorp (GBCI)
Susquehanna bancshares (SUSQ)
Jeffries (JEF)
Alexander Baldwin (AXB)
Sina Corp (SINA)
Fair Isaac (FIC)
Arkansas Best (ABFS)
Associated Banc Corp (ASBC)
Tidewater (TDW)


Added to (Positions they already owned but added shares to)
Mettler Toledo (MTD): Increased by 2282%
Idearc (IAR): Increased by 395%
National Financial (NFP): Increased by 184%
MSCI (MXB): Increased by 82%
Federal Mogul (FDML): Increased by 59%
Donnelley (RHD): Increased by 49%
Monster Worldwide (MNST): Increased by 40%
First Horizon (FHN): Increased by 5%
Humana (HUM): Increased by 2.5%


Some Reduced Positions (Positions they sold some shares of - note not all sales listed)
Transocean (RIG): Sold 89%
Kroger (KR): Sold 79%
AON (AOC): Sold 62%
Apollo Group (APOL): Sold 27%
Invesco (IVZ): Sold 12%
Qualcomm (QCOM): Sold 15%
Davita (DVA): Sold 12%


Removed Positions (Positions they sold out of completely)
Mastercard (MA)
Plains Exploration (PXP)
Viacom (VIA.B)
Weatherford (WFT)
NII Holdings (NIHD)
Prudential (PRU)
Staples (SPLS)
Southwestern Energy (SWN)
Massey Energy (MEE)
Saic (SAI)
IHS (IHS)
Frontier Oil (FTO)
ITT Education (ESI)
Sherwin Williams (SHW)
Hologic (HOLX)
Illumina (ILMN)
Google (GOOG)
American Medical (AMMD)
Delta (DAL)
Mckesson (MCK)
CMGI


Top 20 Holdings (by % of portfolio)

1. Apollo Group (APOL): 19% of portfolio
2. Invesco (IVZ): 11% of portfolio
3. Qualcomm (QCOM): 9% of portfolio
4. Davita (DVA): 7.7% of portfolio
5. MSCI (MXB): 4.7% of portfolio
6. Visa (V): 4% of portfolio
7. Priceline (PCLN): 3.7% of portfolio
8. Verisign (VRSN): 3% of portfolio
9. First Horizon (FHN): 2.9% of portfolio
10. Mettler Toledo (MTD): 2.8% of portfolio
11. Kroger (KR): 2.4% of portfolio
12. Quest Diagnostics (DGX): 2.3% of portfolio
13. AON (AOC): 2.2% of portfolio
14. Alliance Data (ADS): 1.9% of portfolio
15. Keycorp (KEY): 1.8% of portfolio
16. Macrovision Solutions (MVSN): 1.8% of portfolio
17. Beckman Coulter (BEC): 1.7% of portfolio
18. St Jude Medical (STJ): 1.3% of portfolio
19. Harley Davidson (HOG): 1.3% of portfolio
20. Blackrock (BLK): 1.2% of portfolio

Assets from the collective holdings above were $5 billion last quarter and were $3.3 billion this quarter. Its also interesting to note that they effectively swapped out of Mastercard (MA) for their new Visa (V) position. We mention this mainly because many of the 'Tiger Cub' funds have positions in these two names and recently their mentor Julian Robertson was buying them. Interesting to see that Viking prefers one over the other. Please note that we have not detailed every single change to every single position in this update, but we have covered all the major moves. Also, keep in mind that these filings only include long equity and options holdings and do not reflect the cash or short portions of their portfolio. This is the tenth hedge fund we've covered in our 3rd quarter 2008 edition of our hedge fund tracking series in which we're tracking 35+ prominent funds. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, Timothy Barakett's Atticus Capital, John Griffin's Blue Ridge Capital, Bret Barakett's Tremblant Capital, and John Paulson's Paulson & Co. Overall, its been one of the worst years ever for hedge funds, as we noted in our recent October hedge fund performance update. Thus, the recent moves they've made in their portfolios become all the more interesting given the way the market has played out.

More on Halvorsen & Viking:
- Viking's performance numbers
- Viking's 3rd quarter investor letter (.pdf format)
- Tale of two 'Tiger Cub' hedge fund managers
- Hedge Fund Rankings

Halfway Through Redemptions?

Could we be halfway through the redemption cycle? That's what global wealth management firm Bernstein is postulating. After surveying the landscape of hedge funds, they believe that we are roughly halfway through the deleveraging process.

Here is some of the rationale,

"For a start, average gross leverage has fallen to 142 per cent of assets under management from about 175 per cent in 2006 and 2007. Most respondents, 63 per cent, think the hedge fund deleveraging process is at least halfway over. On average, those surveyed thought redemptions are 52 per cent complete — with the process to finish around the first-quarter of 2009. Still, about 10 per cent of respondents said they were setting aside cash for known or anticipated redemptions. Overall, cash as a percentage of total assets is now at about 31 per cent, compared to an average of 7 per cent over the past two years."

Source: FT

Hedge Fund Tracking: Paulson & Co (John Paulson) - 13F Filing 3rd Quarter 2008

This is the 3rd Quarter 2008 edition of our ongoing hedge fund tracking series. Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here. We're aiming to cover 35 or so prominent funds this time around and we'll be releasing the 13f analysis of each individual fund here in the coming weeks. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, Timothy Barakett's Atticus Capital, John Griffin's Blue Ridge Capital, and Bret Barakett's Tremblant Capital. Next up, we have John Paulson's Paulson & Co. Paulson & Co is famous for making a fortune by betting against sub-prime when this whole mess began to unfold. And, it appears as if Paulson is still up to his fortune-making ways. One of his funds has generated a 589% return, which could easily be up there amongst the largest returns by a single hedge fund in a year. Paulson's Advantage Plus fund has returned 19.44% year-to-date as of the end of August. This is the same fund that gained 158% the year prior and has grown to almost $9 billion.

Paulson's bet against sub-prime has paid off and he has recently reversed course on that bet and has started to buy the assets he was previously short. In addition to his dances in sub-prime, Paulson recently disclosed a 14.6% stake in Cheniere Energy (LNG). And, prior to that, it was revealed that he was short UK banks. As we noted in our October hedge fund performance update, Paulson & Co's advantage plus fund was up 29.4% at the end of October. And, a week ago, Paulson went before Congress to testify with regards to the hedge fund industry.

The following were Paulson's long equity and options holdings as of September 30th, 2008 as filed with the SEC.


New Positions (Brand new positions that they initiated in the last quarter):
Applied Biosystems (ABI)
Anheuser Busch (BUD)
Rohm & Haas (ROH)
Barr Pharma (BRL)
Genentech (DNA)
BCE inc (BCE)
Merrill Lynch (MER)
NRG Energy (NRG)
Brocade Comm (BRCD)
Time Warner Cable (TWC)
Hercules (HPC)


Added to (Positions they already held but added shares)
none


Reduced Positions (Positions they sold some shares of - note not all sales listed)
Mirant (MIR): Reduced position by 6%
Philip Morris Intl (PM): Reduced position by 14%
Macrovision Solutions (MVSN): Reduced position by 38%


Positions with no change
Boston Scientific (BSX)
Kinross Gold (KGC)
Wrigley
Dr. Pepper Snapple (DPS)
Affiliated Computer (ACS)
Cheniere Energy (LNG)
Equity Media Holdings (EMDA)
Tronox (TROXB)


Removed Positions (Positions they sold out of completely)
WH Energy Services (WHQA)
Hercules Offshore (HERO)
Navteq (NVT)
Choicepoint (CPS)
Applera
Nymex (NMX)
Bank of America (BAC)
EDS (EDS)
Yahoo (YHOO)
Clear Channel (CCU)


Top 20 Holdings (by % of portfolio)

1. Anheuser Busch (BUD): 25.8% of portfolio
2. Rohm & Haas (ROH): 14.8% of portfolio
3. Boston Scientific (BSX): 14.5% of portfolio
4. Barr Pharma (BRL): 9% of portfolio
5. Kinross Gold (KGC): 6.5% of portfolio
6. Applied Biosystems (ABI): 4.8% of portfolio
7. Mirant (MIR): 4.8% of portfolio
8. Genentech (DNA): 4.2% of portfolio
9. Philip Morris Intl (PM): 4% of portfolio
10. Wrigley: 3.9% of portfolio
11. BCE (BCE): 2.7% of portfolio
12. Merrill Lynch (MER): 1.3% of portfolio
13. NRG Energy (NRG): 0.7% of portfolio
14. Brocade Comm (BRCD): 0.6% of portfolio
15. Dr Pepper Snapple (DPS): 0.6% of portfolio
16. Time Warner Cable (TWC): 0.5% of portfolio
17. Macrovision Solutions (MVSN): 0.3% of portfolio
18. Hercules (HPC): 0.28% of portfolio
19. Affiliated Computer (ACS): 0.25% of portfolio
20. Cheniere Energy (LNG): 0.15% of portfolio

Assets listed in the long portfolio this quarter were a little over $7 billion when compared to last quarter's $5.7 billion or so. It definitely looks as if Paulson is trying to play it "safe" in the equity markets by betting on mergers he thinks will still get done despite the credit crisis. His large stakes in ROH and BUD clearly illustrate that. Please note that Paulson's holdings are not necessarily primarily in equity markets, as they operate in numerous other markets. Also, keep in mind that these filings only include long equity and options holdings and do not reflect the cash or short equity portions of their portfolio. This is the tenth hedge fund we've covered in our 3rd quarter 2008 edition of our hedge fund tracking series in which we're tracking 35+ prominent funds. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, Timothy Barakett's Atticus Capital, John Griffin's Blue Ridge Capital, and Bret Barakett's Tremblant Capital. Overall, its been one of the worst years ever for hedge funds, as we noted in our recent October hedge fund performance update. Thus, the recent moves they've made in their portfolios become all the more interesting given the way the market has played out.

More on Paulson & Co:
- Hedge Fund October performance numbers
- Paulson's congressional testimony
- Paulson's stake in Cheniere Energy (LNG)
- Paulson & Co shorts UK banks

Hedge Fund Related Linkfest

Since we're heavily into the hedge fund tracking series right now, figured we'd post up some relevant links for further reading.

Paulson & Co buys mortgages [FT]

If you ever wondered what SAC Capital's Stevie Cohen's house looks like, here ya go [DealBook]

Hedge Fund leverage historical comparison [PaulKedrosky]

Trimming the Hedgies [Ultimi Barbarorum]

Chill Out Man / Drink the KoolAid

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Hat tip Barry Ritholtz.

In other news, CNBC always wants you to drink the Kool-Aid. Just sayin'.

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