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New York State Common Retirement Fund (Dumbest Money Imaginable) Does Not Participate In Q3 Stock Rally
It may come as a surprise to many that even the dumbest of the dumb money, the New York State Common Retirement System, which according to its most recent 13F had about $44 billion in total equity assets (Calpers was a distant second at $29 billion) did not participate practically at all in the last quarter's run up, and in fact of its top 30 positions, except for one notable addition, the fund was a net seller. Ironically, and true to its definition of dumb money, the fund added 7 million shares of Bank Of America: probably the very same shares that John Paulson was selling to whoever was dumb enough to bid them at that price.
As the chart below demonstrates, the top ten positions at the New York Fund were:
- Exxon ($1.2 billion)
- Microsoft ($740 million)
- JPMorgan ($684 million)
- Apple ($656 million)
- General Electric ($630 million)
- Johnson and Johnson ($620 million)
- AT&T ($610 million)
- IBM ($600 million)
- Procter & Gamble ($597 million)
- Bank of America ($565 million)
Yet what is most interesting is determining whether the fund was part of this ridiculous concept of money on the sidelines, which is climing the "wall of worry," or whatever the retarded phrase of the day that is used by The First In Subversive Propaganda Worldwide. And the answer is no. The New York Fund, one of the biggest and dumbest money managers (and if the AG is correct, one of the allegedly most corrupt ones too) out there, did not participate in the "rally." In fact, if one excludes the 7 million shares of BAC added which nets out the sale that John Paulson accomplised over the quarter (gee, wonder who top ticked that one), the fund actually was a net seller of 308,251 shares, or $10 million worth of actual value disposed in Q3. So yes, hedge funds and quants managed to run the market up on no volume in Q3, without actual active participation by the dumb money whales.
The chart below demonstrate the net change in Q3 for the top 30 holdings by the fund.
Zero Hedge will next analyze the portfolios of the other idiot money out there (the people who actually buy or sell based on a Goldman recommendation change) - the Fidelity's and the Putnam's of the world. We are fairly convinced the results there will be a mirror image of what the New York Common fund demonstrate: nobody has been taking advantage of this rally, which is as hollow as the computer boxes which have traded the market to stratospheric valuations.
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Ironically, and true to its definition of dumb money, the fund added 7 million shares of Bank Of America: probably the very same shares that John Paulson was selling to whoever was dumb enough to bid them at that price.
Gets my vote for quote of the day!
also:
1. New York State is a cesspool piece of shit.
2. Timothy Geithner is a liar.
Agreed.
What state do you live Deadhead?
NY
..
avid readers of Zero perhaps (snark)
Sooo this whole stance of: "this rally and market are manipulated, you'd have to be an idiot to buy into it" that ZH has held suddenly doesn't apply to NYSCRF...now they are 'dumb' because they took the same stance preached every day by ZH?
You are no better than those you mock.
Yup. Too much time they are speNding reading ZH.
Not a very impressive growth portfolio. Perhaps if they swapped their top holding, Exxon, with Golden Slacks they may have seen a greater return.
So they own the Dow, and they have human beings "managing" this portfolio?
Ha!
Agreed. It looks like the top 25 of an S&P index fund, or the Dow. I have VFINX in my holdings and manage to cost myself some 0.09% ER per year for the same services that are being charged significantly higher ERs in the pension fund.
There's a reason smart pensions are going to passively managed fund that use indexing and asset class allocation rather than trying to pick a "winner" stock -- it's cheaper and, on a risk adjusted basis, delivering vastly higher performance than active management.
the title of the post implies they were allocated largely in cash, which isn't the case, right? If they own $44B in equities, they should have seen nice performace from the rally...
seems to me that NYSCRF not buying more stocks last quarter is something to commend them for - not ridicule them for - no?
word
As pointed out below, the whole point of the post, which you seem to have missed, is the fund's lack of participation in the rally. NYC is not being ridiculed for avoiding the rally - the dumb money moniker, as i hope you are aware, arises for other reasons. The point is to refute that even dumb money is participating in the market by purchasing on the upside. And to simply once again: the question boils down to who is buying on the margin. With exponentially declining volume, very little few. Does that explain it?
yes, i deduced that you probably meant they didn't "contribute" to the rally by buying stocks.
as you know, when people in the business say that someone didn't "participate" in the rally, there is an implication that the subject is either not long, or short. No need to get snippy with me because you used the wrong phrase, TD, as the fact is that NYSCRF indubitably did participate in the rally.
Happy to see we once again reach a consensus on semantics.
Apparently the only way to reach a consensus with you is to acknowledge you're right even when you're wrong.
And to simply once again: the question boils down to who is buying on the margin. With exponentially declining volume, very little few.
Bingo.
The issue of the PPT is almost as haunting as the issue of abortion...if you advocate transparency, non-corrupt puppet legislators, and ending the fed, you have to accept that the after effects of the destruction of this mirage and this is the Catch 22 that perpetuates and enables the evil that drives this system.
Yeah Tyler, it couldn't be that the post was poorly written, that most people can't figure out how a fund with $44 billion of stocks (that looks like a closet index fund based on the top 30) somehow didn't participate in the equity market rally as the headline states. We're just too dumb to get the meaning that was somehow buried within.
The point is to refute that even dumb money is participating in the market by purchasing on the upside. And to simply once again: the question boils down to who is buying on the margin. With exponentially declining volume, very little few. Does that explain it?
Given the fiscal situation of NYC, I doubt they were pouring new cash contributions into their pension fund during the quarter. I would not be surprised if they paid out more to retirees than they added in cash. I would also guess that a large fund like NYC stays pretty fully invested, perhaps tweaking their asset allocation a little bit over time. So if they started the quarter fully invested and paid out more cash than they contributed and didn't shift their asset allocation toward equities, then what were they supposed to buy more equities with?
But wait, now I get it. I've just proved your point. Since one pension fund didn't have "cash on the sidelines" to invest in the stock market, nobody does. Proof by anecdote.
Why is this flagged as junk? I've gotten into an argument with Green Sharts before (what's an argument between friends), but he is one of the best posters on this site. And I agree with his observations on the matter.
I don't see anything that Green Sharts articulated that would generate an objective 3 as junk. I hope this is not blind left finger mouse banging because anyone who questions Tyler or Marla should be flagged.. If this keeps up all the decent posts will evaporate and TD MS can argue with themselves...
P.S. I know they do good work and I appreciate it, but lets get fucking real here..3 JUNKS?? Make that 4 oh wait a minute 6 #133780
I'd take the Junk ratings with a grain of salt. One of my posts got junked yesterday, and I thought it was one of my funniest and poignant comments that I have made on this site. The way I see it: +1 for hitting a nerve , and +1 for verification that someone read my post. Since Junking doesn't remove the post, I wouldn't worry about it.
I'm not pissed about the flagging as much as the motivation for it..
If the contention wasn't with Tyler my guess is that no flagging would have taken place...Just a bunch of ass kissers..They sense Tyler needed their help...Please..
Isn't it a little hypocritical to say that TD, when you've been nothing but bearish this whole rally?! If anything, you should be commending them for not buying into the nonsense.
NY Common is not ridiculed for not participating in the rally: the issue here is the "money on the sidelines" which has been touted to be coming precisely from the likes of the NYC fund and others. The New York Common fund is called dumb money for other reasons.
dumb is the new smart...
And the new comfortably retired. LOL
Maybe they aren't so dumb (at least for now). The real dummies should appear when this thing performs the percentage equivalent of last summer's correction. For this very patient short seller that bounce is going to be most interesting to follow and ultimately where rubber meets road for the trading bots.
I would agree, what they know is more then the common folk.
their mistake is owning any equities at all
damn smart of them not to get suckered into trading their cash for shit GS is offering.
there is no such thing as money on the sidelines. if I have $1m in a money market fund, that fund holds short term securities. If i redeem, the money market fund has to sell some securities to someone else, so my $1m comes out and some other schmuck's $1m goes in on the other side of the sell. And if I use that $1m to buy GE stock, my $1m goes in and someone else's $1m comes right out as a sale. so stop with the nonsense that there is some magical pot of $ on the sidelines. There will be no such thing as money new money in the market until the nation as a whole retires more debt that it issues.
so it isn't money on the sidelines, it is demand that comes into the market in the form of willingness to pay more for stocks. that's it.
Oh, and another note, if my $1m order pushed up the share price by 5 cents, then the market cap added to GE could be about $535m (10.7b shares x 5 cents a share). But there really isn't $535m new market cap in existence from my measly $1m order, is there....unless everyone sells immediately to recognize the "new money" but that would drive the price down...makes perfect sense right?
Only Calpers is more corrupt--
Geez, seemed like a pretty straightforward post to me. Then the poo-storm started.
"No, no, I thought you said, "I'm alright, Spider.""
"No I'm not alright. What am I on your pay no mind list?"
What could possibly come from a state run by a legally blind governor. More sugar & soda please, that will fill the state's tax coffers.
The only way you can tell if the fund participated in the equities rally is to look at the returns. Looking at the changes in the top holdings through 13F filings is usually meaningless as money is shifted around inter- and intra-asset classes.
And CALPERS has far, far more than $29 billion in equities.