Is This Why David Tepper Is "Very Nervous"
Below is the full breakdown of the just released 13-F of David Tepper's Appaloosa.
First, the highlights: it seems that the suddenly weary billionaire investor had no such skeptical reservations in Q1, when he increased the long-only equity portion of his book from $8 billion among 70 positions to $9.1 billion but among a more concentrated 58 positions. Among his most notable liquidations (sorted by size): Fluor, Hartford, EMC, Transocean and Foster Wheeler. Tepper also took new modest stakes in Priceline ($218MM), Expedia ($50MM), and Facebook ($29MM).
The full list of other positional increase and decreases can be seen on the chart below but two particular stake bear noting: as of March 31, Tepper's largest position is no longer just the SPY, or S&P500 ETF, which amounted to $2.1 billion in value as of December 31 followed by $765 million in the Nasdaq ETF, the QQQs, but rather calls on the S&P500, which at March 31, 2014 represented a notional equivalent of a whopping $1.1 billion, or 6 million shares! And perhaps even more notable: Tepper's 6th largest position at the end of Q1, after the SPY Call, a cash position in SPY in second place, followed by $815 million in QQQs, and $492 million in Google and $480 million in Citi, is a new position in Nasdaq (QQQ) calls, amounting to a just as whopping $438 million share notional.
To be sure, we don't know if Tepper still has any of these two massive call position on his books right now, nor do we know how much capital at risk they involve, but judging by the performance of the Nasdaq alone, the QQQ calls are hardly doing all that great.
So being very bullishly levered in 2 of your top 6 positions into a suddenly swooning market, that would make everyone, not just Tepper, nervous. Unless of course he sold his calls before the SALT conference and is already comfortably hedged with a billion or so in SPY and QQQ puts...
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