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Strategies & Market Trends : Sharck Soup -- Ignore unavailable to you. Want to Upgrade?

To: CAPTAIN MORGAN who wrote (25169)	5/27/2001 9:33:05 AM
From: puborectalis	Respond to of 37746

Soros firm buys $611 million in Nasdaq 100 By Miles Weiss Bloomberg News George Soros WASHINGTON - The money-management company founded by George Soros, renowned for big bets on the direction of financial markets, bought $611 million worth of shares in the first quarter that track performance of the Nasdaq Stock Market's 100 biggest non-financial companies. After owning no Nasdaq 100 tracking shares at the end of last year, Soros Fund Management LLC disclosed that the securities represented almost 26 percent of its reported stock holdings as of March 31. "It seems like a market call on their part," said Paul Cook, director of technology investing at Munder Capital Management in Birmingham, Mich. "If you go from zero to a 25 percent position, you seem to be making a fairly bullish statement on the direction of a stock or index." Soros became famous in 1992 by making $1 billion through an investment strategy that broke the Bank of England's defense of the pound. Soros swore off such multibillion-dollar bets last year and withdrew from decision-making at his namesake firm. Besides required quarterly disclosure of stock ownership to the Security and Exchange Commission (SEC), Soros Fund Management doesn't give out figures on assets in real estate, private equity, currencies or other investments, making it difficult to determine how much the Nasdaq 100 investment represents a wager on a market rebound. The shares track the Nasdaq 100 Index, which reflects performance by companies such as Cisco Systems, Microsoft and Intel. Officials at Soros Fund Management declined to comment. The first quarter proved a good time to bet on the Nasdaq 100. The index was finishing a 64 percent plunge that began in April 2000 and has jumped 22 percent since the end of March. Nasdaq 100 shares rose 75 cents to close at $47.90 each, giving the 15.6 million shares purchased by Soros Fund Management a current market value of $747 million. Other money managers made similar investments in Nasdaq 100 shares during the first three months of 2001. Janus Capital, for example, reported the purchase of 6.6 million Nasdaq 100 shares during the first quarter even as it sold stock in individual index companies, such as Cisco and JDS Uniphase. Often these investment advisers simply park cash in the Nasdaq 100, a proxy for the technology sector, while they do the research needed to select individual stocks. At least one such manager, though, views the Nasdaq 100 as a less risky way to bet on the recovery of technology industries. "We wanted to expand our position in technology but did not want to take a company-specific risk," said Bruce Aird, managing director at Bessemer Investment Management LLC, a New York-based manager for wealthy individuals that has purchased more than 12 million Nasdaq 100 shares this year. "There have been so many blow-ups in the technology sector, we thought it would be better to spread our bets until the outlook got clearer." Soros Fund Management, adviser to the Quantum Endowment Fund, which is up 8 percent so far this year, has in the past bet heavily on technology stocks. The advisory firm had almost 40 percent of its stock portfolio invested in telecommunications, computer and online stocks as recently as Dec. 31, 1998. That all changed after losing bets on technology stocks and currencies cost Soros Fund Management, then ranked as the world's largest hedge fund operator, about $5 billion in assets in April of last year. Soros, who already had withdrawn from day-to-day involvement at his advisory company, delegated much of its stock picking to outside managers. The firm also appointed Darren Davy to handle investments tied to macro-economic trends, which at one time were Soros' forte. The SEC filing provided no indication of whether the Nasdaq 100 shares were purchased by the outside firms retained by Soros or by its macro team. The Nasdaq 100 investment may have been part of a larger strategy at Soros Fund Management, perhaps to protect or hedge the value of other investments. This was an approach taken by David Rocker, a fund manager who purchased almost 3.6 million Nasdaq 100 shares after Oct. 1 last year. "I want to limit volatility in (my) overall portfolio," said Rocker, a New York-based fund manager who often bets against Nasdaq stocks by taking short positions. "I'm not bullish on the Nasdaq." Soros Fund Management on March 31 owned about $127 million of convertible bonds issued by Nasdaq companies such as Efficient Networks, Juniper Networks and Lattice Semiconductor, and also held about $102 million of common stock in Transmeta. The overall technology holdings in the $2.4 billion portfolio didn't approach the total value of the firm's Nasdaq 100 investment.