Hedge Funds Have Never Been More Bullish Stocks (And Bearish Gold)

Tyler Durden's picture

Across the universe of hedge funds that Goldman Sachs covers, the net long exposure to the market reached a record-breaking 52% in Q4 2012 - the most bullish level on record. It would appear, as we noted here, that the 2-and-20 crowd of alpha generators have merely been corralled into beta-chasers as, just as they did in the run-up to the 2007/8 highs, their exposure is mirroring the broad market performance. It strikes us that a 'hedge' fund should, in general, be contrarily reducing exposure as the market rises but with turnover of all positions also at record lows it would appear the managers have set out their chips and are all holding on - as the reality of relative returns (in a fickle investing environment) trump absolute returns. Despite low turnover, hedge funds notably reduced holdings of underperforming long-time favorites Apple and gold (lowest holdings since the crisis began) while raising allocations to rallying Financials. Seems like deja vu to us?

Will hedge funds be turning point indicator as they were in 2007? Hedgies are the most bullish stocks on record currently - given their most net long nature...


as Turnover keeps sliding...


and GLD holdings are the lowest since the crisis began...


This positioning heading into the new year does make one wonder whether the low volume algo lift we have been experiencing along with incessant sell-side stratification that 'the rotation is here and its time for retail to step in' was merely to enable the over-exposed to exit on the basis of obviously slowing macro and no fiscal solution...


Charts: Goldman Sachs

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Aziz's picture

Everything ounce hedge funds will sell, China and Russia will buy.

DoChenRollingBearing's picture

Not if the Central Bank of DoChenRollingBearing gets there first...  Actually, our CB will be taking a month or so off form buying.  So this is your LAST CHANCE to buy before the big boys come in!

MillionDollarBonus_'s picture

It's amusing that silly ZH small time ZH day traders consider the world's leading hedge funds the dumb money. It's like a weedy libertarian computer nerd judgmentally criticizing a heavy weight boxing champion for poor martial combat skills. Do you have any idea how pathetic greasy ZH day traders look to professional investors? Financial professionals view ZHers with the same indifference and annoyance as they would view a fly at the dinner table. To them, ZHers are nothing but a bunch of annoying pathetic losers with no investment knowledge or academic credentials.

Ag Tex's picture

Zimbabwe was the best performing stock exchange, nominally, with the creation of more trillionaires than anywhere in the world.

thisandthat's picture

He defined himself pretty accurately, though.

DoChenRollingBearing's picture

MDB wrote: "Financial professionals..."  That's pretty good, LOL!

Almost as funny as Barron's "investment pros", having the S&P whip 'em every time...

Non Passaran's picture

What was that research that showed how most of those "professsionals" couldn't beat a random number generator?

Some professionals! 

Stuck on Zero's picture

Yes.  How well did these hedge funds do in the 2008 bloodbath?


rosiescenario's picture

You are so correct....those Noble winners have had such a great track record in hedge fund management....LTC comes to mind....

RichardENixon's picture

No one is saying they are "dumb money", MDB. These hard-charging, savvy and prescient hedge fund managers are busy dawn to dusk, 7 days a week, working to lure the unsuspecting retail investor back into the bubble so that they can pull the plug and enjoy their hard-won and well-deserved gains.

IridiumRebel's picture

i would imagine the vast majority are "retail investors". Why do some of the ZHer's parrot and believe what many heavy-weight Hedge Fund masters state? Some of these people are almost prophetic. I pray you are nimble. Even a dumbass would be able to see that these fundamentals are frail if non-existent. Math is certain.


from Han Solo

  • Insider stock sales
  • Investor sentiment
  • Retail investors just got scalped
  • PM slammed prices down to 200 MDA and bouncing
  • Walmart, Foxconn & Catepillar sales
  • ISM index & unemployment divergance
  • Europe not fixed and in depression(Greece & Spain worsening by the day)
  • Berlusconi going may be reelected
  • China tightening

tick tock tick tock

Silver Garbage Man's picture

Not all of us are greasy day traders......some(at least one) of us are greasy garbage man.

JOYFUL's picture

... ZHers are nothing but a bunch of annoying pathetic losers with no investment knowledge or academic credentials....

can't argue with that...you've nailed most of us to a tee. One of your better postings MDB. But there's one thing I don't quite understand - why do you think we are greasy day traders? Most of us don't trade at all, and are so pathetic that we wouldn't give up our loser hoards of shiny stuff even if you offered us a lucrative opportunity to join the world of professional investors and make some real money in exchange for doin so! Guess we just greasy, not greedy huh?

Once you high-flyer professional traders all follow each other off a cliff in search of an exit, I expect you'll see many of us buzzing around lookin to see if there's anything worth putting up with the putrid stench of your decaying carcasses to make off with!

Later Algotrader!

falak pema's picture

wooo? Joy is full of anger, the MDB has got to him.

Gone are the fanciful delusions of a mega conspiracy fermented by Shylock the medieval Jew; of Venice and its toxic brew of nascent, usury capitalism, that corrupted strain having tainted all those good Templars into debased capitalists, forgetting their simple Bible books. 

Its now blatant Mammon who is to blame...forget the blood line, concentrate on the debased knowledge line...we forget what life teaches us.

That is closer to truth than original sin of corrupted blood. 

JOYFUL's picture

woo hoo?

Angry bud? Has the supply of wormwood dried up in your neighborhood? We havin a bit of light-hearted banter here, me good bud MDB n me...you're usually more on the ball than this bit o bluster n blunder!

c'mon back when you're feeling more yourself squire!

Al Huxley's picture

You know, there's a subtle difference between expressing your distaste for the corruption of the system by being sarcastically witty and just being a dumb fucking cunt.  Your omments are putting you squarely in the latter category.

Non Passaran's picture

Haha, that's awesome!  I LOVE to be seen that way.


Karlus's picture

"It's amusing that silly ZH small time ZH day traders consider the world's leading hedge funds the dumb money."


How many of these "funds" beat the S&P, again?

EmileLargo's picture

I just bought a bucketload of Au. You gotta take the opportunity when it comes. Don't look at a gift horse in the mouth whatever its motives.

BigMike's picture

Long KGC, GG, EMXX, AAU, SLW, VGZ. I think risk/reward is favorable in mining, royalty, exploration and development sector. 

JustObserving's picture

Hedge funds are well connected to Bernanke.  They do what he says and US regulators look at porn instead.  This arrangement works well for the 1%.  

Without fraud and a corrupt Fed, there would be no US markets.

TheGermanGuy's picture

Last time I looked, there was no US market.

BigMike's picture

BTW, speaking technically, as of yesterday, the RSI 2 and RSI 14 on $GLD have never been as oversold in the history of that instrument. Not that I trade or own it, but it sure is interesting. 

eclectic syncretist's picture

Long Parker Schnauble, short Todd Hoffman.

GoldenGal's picture

What if  the price of gold goes below 1000?


DoChenRollingBearing's picture

Paper price maybe.  Not a chance the physical price will get that low ever again.  Think the "India Put" -- they bought over 100 tonnes at $1040 or so an ounce.  

Do you think they would NOT back up the truck if gold gets cheap again?

Do you think the Central Bank of DoChenRollingBearing would not back up the truck long before that happens?  Physical gold has a magnificent future ahead, it will take ALL of our breaths away...

Going Loco's picture

That's if the gold stackers don't asphyxiate themselves first, holding their breath during the long wait for that fabled event.

BTW unlike you lot, I trade gold, at Bullionvault. I don't stack it, I trade it. Has worked very, very well for several years. 

FD: BV account is in cash, USD, at the moment.

DoChenRollingBearing's picture

I don't trade, I have a terrible (and verifiable) record trading, it seems to work against my DNA.  Trading never worked for me, stacking gold (since under $500) has.

When I used to live in Texas they had a saying: "Hold your breath, you die."  So, I do not hold my breath.  Besides, my gold will be just sitting there, very still, for a long time.

Shell Game's picture

+1  LOL, I had to chuckle at your trading confession, DonChen.  Rings a bell close to home.. ;)  The calmness and peace that comes with procuring honest money has given me more time to spend with family, improve my shooting, work on alt-skilliing, etc..  I wouldn't trade that for the bullshit of the paper trading world...no sir.

Going Loco's picture

I used to be like that with trading. Everything I touched seem to go wrong. But I have learned how to do it. Trading is a skill which can be learned, and it is worth learning it. OTOH as a stacker you do have some good company - John Mauldin for example. Personally I think we are some way away from the reset and there is still time to accumulate more gold by trading it than by averaging in and stacking. There are so many people on this board who stack and are figuratively holding their breath until der tag arrives.

Greshams Law's picture

Then I whore myself out to 20 fat chicks at $50/pop and buy an ounce every day.

Fat chicks need lovin' too. But they gotta pay.

DoChenRollingBearing's picture

20 * $50 only equals $1000.  You would have to service about 40 or so...

That's called "earning your money!"  40 per day?!?!?!

GubbermintWorker's picture

I'll be getting close to breaking even?

Doubleguns's picture

Could this be in anticipation of EZ spectacular fail. All the money in EZ comes running here soon? Just trying to figure out the move that appears so foolish. WTFO!!

El Viejo's picture

Maybe it's different this time?

TrumpXVI's picture

This whole thing is just getting fuckin' retarded!

walküre's picture

Sounds like you had just closed all your short positions on Monday?

Dewey Cheatum Howe's picture

They are in on the fix simple as that. If they really gave a fuck about the investors they'd hedge a portion of the investments in physical and little to no risk options. When the market crashes everyone loses their savings, they just play the patsies for the theft of everyone's savings and then Satan Claus steps in and promises back those lost savings with the catch your money is where they think it should be invested. It was savings based on nothing and a con game to transfer the numbers from one book to the other.

Dewey Cheatum Howe's picture

These fuckers can smack down precious metal prices all they want. Once the confidence crisis happens and it will, who is the average joe going to trust more, the guy with physical gold/silver etc. (regardless of how much it is worth) as long as it isn't fake, the weight is the weight along with tried and true methods for purity testing, you can't fake that. You can be 100% confident that the gold you are getting is what it is claimed to be. The dollars on the other hand unless backed by tangible assets don't pass that credibility test. The price of pm's will rise in proportion to the lack of confidence in the paper, rigged market or not. That is probably the one absolute everyone can bank on.


These central planning assholes in fantasy land can run all the algos they want but none of their models can predict the human(rational/irrational) pysche where people just say fuck you and stop playing the game. We'll know when we hit that point because the police state will turn the guns on us to force back into the game against our will when all the other false pretense methods fail like a stock market that is clearly rigged based on not reflecting any sort of rational human behavior patterns.

Monedas's picture

They sold all the peoples gold trying to supress gold fever .... probably sold foreign gold under custody .... now they want Americans to disgorge their private gold .... these Socialists are "Hell Bent" on destroying every vestige of Capitalism and "American Exceptionalism" !  On a scale of 100 .... of believers in Capitalism .... Monedas is a 100, Doug Casey 98 or 99, Ron Paul is a 92 and Obama is a 1  !  I may have to start assigning numbers to some of the inane posters around here !       Monedas     1929     Comedy Jihad What's Your Number World Tour    PS:  Milton Friedman was a 100 !

DoChenRollingBearing's picture

If they sold our gold, that just makes my case even stronger: EVERYONE should have some physical gold in their own possession!  The best innoculation against Socialism Fever wrecking your financial future...

Monedas, I wold assign Obama a -100 as a Capitalist.

You ask: "...What's Your Number..."  My number is $55,000!

Monedas's picture

Do Chen, I knew I could count on you !  If you run for Presidente of Peru .... you got Monedas' vote !

Monedas's picture

Elizabeth Warren is a two .... Putin is a 20 and ascending .... China is waxing Capitalist .... North Korea is a - 20 !

Bam_Man's picture

And everyone knows hedge funds are never wrong.

BTW, what was the average hedge fund return last year? Around 2%? 

John McCloy's picture

   Well I bought more FAZ for the first time in 3 years yesterday at around the 52 week low...I am getting the 2008 feeling I had, 800K pentagon layoffs coming, less money in middle class paycheck weekly, inevitable health care bill layoffs, student loans bubble, news of liar loans being back in both the home and auto industry and there are essentially no tricks left up the EU sleeve nor the Fed and the citizens will never stomach a 2008 TARP replay.

  Hoping to ride a market crisis while gold and silver fall/collapse along (temporarily) and then all in metals for the inflationary nuclear bomb that they are going to try to pull out of their hats along with the announcement of price controls and gold and silver confiscation. That is the end game along with the nationalization of every single TBTF.

helping_friendly_book's picture

The Associate Director for FHA was testifying to Congress that they were loaning to people who had been in foreclosure more than 2 years ago. I couldn't believe my fucking ears. Makes me want to go out and buy property, rent it out, and never make a fucking mortgage payment.