Learn a few things from hedge fund managers....
For want of better things to do last week-end .(too damned cold for outside activities)..I researched a couple of dozen hedge funds to see if I could decipher some trading trends.
Methodology: I looked at the top 30 funds (for return) and to see which stocks were a common denominator for the group.
In stocks it was Micron, SunEdison, Bank of America..Intel, Apple , TSM, and Visa
These stocks were overweighted in almost every portfolio. Most were purchased when the charts said sell, and have become big winners in two to three years.
Take Sun Edison....purchased at less than $2.00 a share. When a stock like SUNE and BAC were in the low single digits these fund managers had just one question, and it was.. will this company survive? If the answer was yes...they bought in. No chart or spread sheet gave a glimmer of hope.
Now there are a few special situations to pay watch. Marvell (MRVL) has 10% of its stock owned by one hedge fund manager. What his plans are I don't know, but I do know that he will extract a price for his large position.
CHK ...Chesapeake Energy is another company with a hedge fund footprint all over it. I have no idea what the plans are for this company, but company officers are on notice.
My last observation is that most of the better hedge funds put about 10 to 15% of their monies on a few selected big bets (read MU, SUNE, BAC). The rest of the money goes to undervalued stocks in the hopes that one or two turn out to be big winners (like VALE, ESV, HAL , HES, and COG).These stocks individually usually comprise about about 1% or less or the portfolio.
I did not notice any 100 to 1 long shots, or any penny stocks.
My source for this information was ......
http://www.insidermonkey.com/ |
