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Massively Levered Beta: Tepper Adds $1.3 Billion, Or 33% Of Long Equity AUM, In SPY, QQQ Calls
Back in February, some were surprised to find that in the quarter (Q4 of 2014) in which Tepper again called the end of the bond bull market (incorrectly), dismissed Bill Gross' PIMCO exit as irrelevant (incorrectly, now that PIMCO is no longer the world's biggest bond fund as a result of relentless billions in outflows) and most notably, proclaiming that that stocks were inexpensive and multiples not high, Tepper dumped some 40% of his portfolio, taking his net long AUM to only $4 billion by selling among other things his entire AAPL stake just as the company went on to surge on a new bout of wearable euphoria.
The same Tepper kept very quiet throughout all of Q1, without any public appearance all the way until May when he spoke at the Ira Sohn Conference. Why was he silent? Perhaps because while the market was topping out, Tepper was actively adding to his bullish exposure, but not in the form of many new stock positions, when in fact he partially unloaded 15 of his 38 positions, while adding 12 new positions. It was 2 of these new additions that were particularly notable: just like in early 2014, Tepper is once again back to index investing, having added a whopping $939 million in notional-equivalent SPY Calls, and $413 million in notional-equivalent QQQ Calls.
In other words, Tepper is once again making a very levered beta bet that the market will resume climbing, and he can capture the upside through SPY and QQQ calls.
Incidentally this is almost a carbon copy of what Tepper did a year ago, just before he said was "nervous" and unlike now, said "not to be too freakin' long." Recall:
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.
In short, a massively beta levered deja vu.
As for all of Tepper's other less relevant additions, reductions and liquidations, you can find the breakdown below.
So with Tepper adding in Q1 when he said nothing, one wonders what he was doing in Q2, when he appeared at the Ira Sohn conference and told listeners not to "fight four Feds" and that the S&P is trading a little "cheap" just days before the Fed Chairwoman said the market is largely overvalued. Something tells us he wasn't selling Treasurys...
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Wow, value added for 2 and 20... and this frog faced fuck is laughing all the way to the bank!
Wow's all around I see. :-)
==>You gotta give it to the man, he's got bull size balls.
==>I think he might lose one this time, though.
Option calls due to privy phone calls!
Or he's buying calls because it's cheaper to buy calls than expose yourself to the potential downside. Risk is cheap right now, why not buy it.
Yes Vol is very low. Whats the delta of the calls? That would give a better assessment of what Tepper is doing.
a better question here is how much premium he paid. the notional value of a spoo contract, for eminis, is about $150,000 each. So 10 calls is a million and a half notional. so he bought something like 8000 of them if they are at the money? Or less if they are out of the money? And the premium paid for those? Much less than 33% of portfolio value. He is not putting 33% of his portfolio at risk. Strange story. Is the hyperventilation really called for?
Wow, I don't think this takes balls nearly as much as it does insider "Club Member" info.
Fuckin' God's work, I tell ya.
He'll just keep those little tid-bits of info. under his yamulke.
What is the market "priced in" again? Don't everyone throw a "tepper tantrum" now...
we all know the "market" is going up. This was confirmed a long time ago.
Looking forward to another X-mas in Deer valley, and it isn't even July yet.
I love you guys...
remember selling the peaks is not illegal... ...yet...
Tepper is just front running soon to be announced The FED's QE4 & 5 programs.
Prediction: US Treasury debt may well be monetized but MBS and Equities a going to be explicitly targeted/bought.
At least he got really good "value" for his "shares" might want to re-check Tyler
"Tepper is once again making a very levered beta bet that the market will resume climbing,"
go right ahead ... dance while the music playing ... just no asking for bailout when the music stops, dope
I agree 100%. This time, there will be no net. I hope Ben Bernanke tastes good, save me some backstrap.
Well you're being downright un-American with your trite no bailout rhetoric, it's not like you're talking about some joe shmoe losing his house or something, this is an important person, so STFU and pay your taxes (other wise known as the rich guys hedge).
Tepper is tasting the royal jelly, gentlemen. He is fucking tight tawny babes on piles of $100 bills ... while bears and doomers sit at the monitor with their pants at their ankles and youporn on the other tab ...
LOL, well at least one of us has a clean conscience.
wtf? my money says he lives in scarsdale or greenwich with an annoying j wife and 2 or 3 whining j kids... even "the help" hates his guts
LOL. I'm a permabear, but this was downright funny.
The market goes up until it goes down and further down and a lot of zig-zagging in between to squeeze the speculators till they are dry.
This clown is nothing more than a Pinko Fascist Commie gambling with other people's money expecting a bailout if his call goes awry. Hard to respect someone like this who sucks at the teat of the status quo...
Everyone knows bull markets end when recessions start - and EVERYONE knows we are IN a face ripping recession right now.
And yes, we never left the last one, but when they can't even paper over the dogshit numbers of Q1 & Q2, we are ROYALLY effed. The sound of money velocity is losing 3db every week.
Tepper is a fucking ass... either way.
Nah, he just went massively short into expiration like all the other big boys, and picked up the calls for hedging purposes. If big hedgies were betting long, we'd see more volume on up days, and the omnipresent perfectly horizontal day session pattern wouldn't hold, instead we'd have daily 3:30 ramps like in 2014 as they stepped all over each other ("What? You're long too? Why, I oughta ...").
He must agree with Peter Schiff that QE4 is a certainty. That gets the DJIA to 20,000 by year end.