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Gold Is Back To Being Third Point's Top Holding

Tyler Durden's picture




 

The last time we checked on the top 5 portfolio holdings of Mr. Pink's Third Point, we noticed that gold had surprisingly dropped to third position, behind Delphi and El Paso. Less surprising is that the fund, which has outperformed the S&P in July, returning 0.3%, and which increased in AUM by a whopping $800 million or well over 10%, has followed gold's surge to fresh all time highs, by once again making gold its top position. So in addition to the Bank of Korea, it appears that one of the key members of the hedge fund "think tank" is once again back and buying. If all of the $800 million in new capital went into gold, it tells you all you need to know about the ability to generate stock alpha in this market. Incidentally, how long before China, and its paltry gold reserves, finally gets the memo?

July letter:

 

 

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Tue, 08/02/2011 - 08:13 | 1516146 TSA Thug
TSA Thug's picture

What is the global legal precedent that requires a sovereign entity to disclose exactly how much gold they have?

Does anyone know?

Wouldn't a country like China buy a mine or miner instead of bullion? Even if it's the largest gold exporter in the world. http://en.wikipedia.org/wiki/Gold_mining_in_China

What about it's in-ground assets?

Tue, 08/02/2011 - 08:14 | 1516164 caerus
caerus's picture

check out the history of the BIS at <a href="http://www.bis.org/about/history.htm">http://www.bis.org/about/history.htm</a> in particular the Basel Capital Accord and Basel II...

Tue, 08/02/2011 - 08:25 | 1516175 TSA Thug
TSA Thug's picture

Thanks for that link. So it appear to me after reading the information that you could understate your holding as long as you meet minimum requirements.

Tue, 08/02/2011 - 08:33 | 1516199 caerus
caerus's picture

looks like that to me...the BIS also recognizes differences in accounting practies by members...

Tue, 08/02/2011 - 08:19 | 1516171 TSA Thug
TSA Thug's picture

Just one last question if you will indulge me as I learn...

Since China is the largest exporter of gold, and the price where it is($1600-$1700/oz). Is buying gold a way to endorse and support communism and the decline of the American economy?

Just trying to learn....

Tue, 08/02/2011 - 08:24 | 1516185 caerus
caerus's picture

complicated question as it combines economic and political considerations...gold doesn't itself know if it is held by a communist or a capitalist or anyone else...to oversimplify I would think that given the decline of the dollar and other fiat currencies, a large exportation of Chinese gold (to U.S. in particular) would be good for the U.S. and not so good for China but again this is an oversimplified answer

Tue, 08/02/2011 - 08:40 | 1516215 TSA Thug
TSA Thug's picture

I think that China is exporting gold and buying it back on the open market.

This has a two fold positive affect for them:
1) it supports the price and sends the price higher
2) they dump their US Dollar holdings exchanging USD's for gold.

Your thoughts?

Tue, 08/02/2011 - 08:04 | 1516147 Debtless
Debtless's picture

$1634.36 just printed.

sorry edit - $1635.88...

Tue, 08/02/2011 - 08:06 | 1516150 High Plains Drifter
High Plains Drifter's picture

so they buy a lot of GLD shares. so what? got physical? i don't think so. This point will one day soon perhaps, be driven home for them. When you own $800 million in GLD does not mean you really own gold....Basically they own paper. Let them try and take delivery on that pile and let's see what happens real fast.....

Tue, 08/02/2011 - 08:08 | 1516158 Internet Tough Guy
Internet Tough Guy's picture

Agree. Paper is Third Point's top holding, with a side of counterparty risk.

Tue, 08/02/2011 - 08:15 | 1516166 equity_momo
equity_momo's picture

Exactly.

Some smart hedge funds will make an absolute fortune as gold continues to rally and then one morning they'll wake up and realize it was just paper profits like all those tech millionaires 10 years ago.

Good luck really realizing those gains (although i bet the fund manager is converting his quartlery fiat paycheck into something more tangible)   The "Investors" though = suckers.

Tue, 08/02/2011 - 08:07 | 1516151 slaughterer
slaughterer's picture

Look at the other top holdings besides Gold: 

Mosaic: down about 6% since beginning of year.

Delphi: down about 8% since beginning of year.

El Paso: ready to crash, a good short. 

CIT: Mr. Pink must have gotten caught in the debt-to-equity conversion in the debt re-structuring when the company filed for bankruptcy, as, despite the appointment of office-furnishing-expert and ex-ML-destroyer Mr. John Thain, its financing is still broken.

 

Tue, 08/02/2011 - 09:37 | 1516451 glenlloyd
glenlloyd's picture

Delphi is a regurgitated piece of GM crap. Once GM finally goes belly up Delphi will be worthless.

How many people got shanked on the Delphi bankruptcy deal? I never did hear about that.

Tue, 08/02/2011 - 08:08 | 1516156 jkruffin
jkruffin's picture

Is there any doubt?  $1650 today is possible, and higher if the Senate blocks the deal...

Tue, 08/02/2011 - 08:26 | 1516186 ViewfromUnderth...
ViewfromUndertheBridge's picture

or if the Senate passes it...that Korea Research chart got a lot of distribution..longs on the sideline, shorts exposed and whammo! Mr Market does it again.

Tue, 08/02/2011 - 08:19 | 1516170 Pay Day Today
Pay Day Today's picture

"Incidentally, how long before China, and its paltry gold reserves, finally gets the memo?"

With Max Keiser covering China's new gold exchange using rmb, doesn't it seem likely that China has got a pretty good handle on the gold scene?

The Pentagon reckons that China spends 2x as much on its armed forces than it actually admits, and has been doing so for years.

What if China has been equipping itself on the sly against the US with GOLD??? :)

Tue, 08/02/2011 - 08:22 | 1516177 Thomas
Thomas's picture

I am in the camp that distrusts GLD and SLV. The question I have is simple: Will gold and silver soar or tank in the event that the ETFs fail? It seems it would be the former, but I cannot rigorously exclude a Bre-X effect.

Tue, 08/02/2011 - 08:28 | 1516190 A Man without Q...
A Man without Qualities's picture

I know I am preaching to the choir, but silver looks so much better value at this point....

Tue, 08/02/2011 - 08:51 | 1516257 High Plains Drifter
High Plains Drifter's picture

look at smiling joe liebermann...  well i am just a independent and all of this arguing between republicans and democrats is something......blah blah blah..........yeh and watch that smile go away if they come out with legislation to halt all money flows to israhole and halt all military cooperation with the terrorist state that he supports ( due to his tribal affiliations ) .......everything is ok, as long as the jews get their way.............that is the way it is. that is the way it has been , for a very long time...........and that my friends is real life............you can bitch, you can call me names but it does not change a thing. those are the realities all of you must  realized while you are arguing over non issues that really mean nothing..........we are zog , zionist occupied government and we have been for a long time and they senched it in for good when they got the FED passed into law ...........its all about tribe and race ladies and gentlemen, and always has been.......the final determination, the final frontier and the final solution...........we are the problem now. we must be eliminated. there are too many of us. we are not needed anymore.

for example.

1864 USA PRESIDENT ABRAHAM LINCOLN
''The money power (Ed : Rothschilds and other international bankers) preys upon the nations in times of peace and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy.”
President Lincoln after his re-election in a letter to a friend, November 21st 1864.

1865 PRESIDENT ABRAHAM LINCOLN

“I have two great enemies, the Southern Army in front of me, and the financial institutions in the rear. Of the two, the one in my rear is my greatest foe.” President Abraham Lincoln, in a statement to Congress. On April 14, 1865 he is assassinated by John Wilkes Booth.

1865 IZOLA FORRESTER (BOOTH'S GRAND-DAUGHTER)
More than seventy years later Booth’s grand-daughter IZOLA FORRESTER, reveals that Booth had been put up to this assassination by powerful interests in Europe.
Izola Forrester in her book “This One Mad Act”.

or this.

1869 RABBI REICHORN
''Thanks to the terrible power of our International Banks, we have forced the Christians into wars without number.
Wars have a special value for Jews, since Christians massacre each other and make more room for us Jews.
Wars are the Jews' Harvest, the Jew banks grow fat on Christian wars. Over one hundred million Christians have been swept off the face of the earth by wars, and the end is not yet''. Rabbi Reichorn at the funeral of Grand Rabbi Simeon Ben-Iudah in 1869.

and on and on it goes and the goyim sleep and play the game of pretend. as i have said before ladies and gentlemen. you had better realize just what kind of enemy you are up against.

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