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Presenting The Latest Hedge Fund Hotel: These Are The Most Beloved Stocks By Hedge Funds At September 30

Tyler Durden's picture


Every quarter, Goldman's David Kostin conveniently compiles a list of the 50 stock that "matter the most" to hedge funds, which is simply a polite way to define the "hedge fund hotel", or the companies which are expected to generate the most alpha. As the name implies these are the names that more so than the S&P 500, or the Nasdaq, determine the fate of Wall Street's richest, because while bankers may comprise the 0.1%, hedge funders constitute the 0.0001%. Why is this list significant? Because just like gold has a liquidation threat associated to it each and every day as it is the item to be sold when the margin calls start, at some point even the gold runs out, and funds will be forced to sell their paper winners, the bulk of which can be found in the top ten places on the list below. Which is why, like last quarter, we caution anyone still long AAPL, GOOG and MSFT. When the trapdoor opens, it is the top 3 stocks on this list that will get hit the most as those who were first, become last.


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Fri, 11/25/2011 - 17:33 | 1913942 GubbermintWorker
GubbermintWorker's picture

And for everything else.... Mastercard!

Fri, 11/25/2011 - 17:55 | 1913988 prains
prains's picture


Fri, 11/25/2011 - 23:32 | 1914524 spiral_eyes
spiral_eyes's picture

"Other diversified financial services", bitchez.

Fri, 11/25/2011 - 19:26 | 1914092 paarsons
paarsons's picture

All my money is in pork and beans.

Anyway, seasons greetings.  And go LSU.

Wed, 07/25/2012 - 05:07 | 2648260 mediaprizm
mediaprizm's picture

Thanks for informative and helpful post, obviously in your blog everything is good.If you post informative comments on blogs it fetches you a lot.
Hotel Designers

Fri, 11/25/2011 - 21:21 | 1914244 xcehn
Fri, 11/25/2011 - 17:33 | 1913947 jcaz
jcaz's picture

Wow, some real snoozers in there;

Alpha?   Looks more like trying to settle down shaky clients with a quasi-mutual fund........

Fri, 11/25/2011 - 17:59 | 1913997 MillionDollarBonus_
MillionDollarBonus_'s picture

You forget that many of these funds hold mean-variance optimized portfolios, so return to risk ratios are of a professional standard. I'm sick and tired of redneck day traders criticising experts who have spent years studying advanced portfolio theory.

Fri, 11/25/2011 - 18:14 | 1914017 jcaz
jcaz's picture

MDB!   Your Mom let you out of her basement for the weekend?

Your post defines the term "Pseudointellectual";   Stop using Wickopedia, your terms don't even match up.

Amusing how few you snow on this board..........


Fri, 11/25/2011 - 19:37 | 1914103 narapoiddyslexia
narapoiddyslexia's picture

"experts who have spent years studying advanced portfolio theory..."

Which takes us to Markowitz and then straight to Milton Friedman. God, we have so many reasons to thank those Chicago economists!

Where would we be without them?



Fri, 11/25/2011 - 20:20 | 1914115 hedgeless_horseman
hedgeless_horseman's picture



Will you just look at that chart of fund holdings?  

Can't help but think that the ghost of Bernie Cornfeld rides again.


By definition, diversity guarantees mediocrity.  

Many fools may pay for mediocrity...but only for a little while.

Fri, 11/25/2011 - 21:09 | 1914220 trav7777
trav7777's picture

bbbut...I have been told diversity is our strength.  In fact, there is a black studies department at some college that wrote that desegregation was an advantage to WHITE students as a result that they got access to diversity being bused in.

Sat, 11/26/2011 - 06:44 | 1914856 falak pema
falak pema's picture

hobby horse; like black dikks are kings of the combo. Lets dance to that tune. Why does prejudice so rhyme with jaundice?

Fri, 11/25/2011 - 18:30 | 1914033 JPM Hater001
JPM Hater001's picture


Where is the Dr Paul Krugman fellow?  Ever notice how you never see Clark Kent and Superman at the same time?

Well, this is nothing like that.  Just a sad footnote in history.  Poor MDB.

Fri, 11/25/2011 - 19:39 | 1914108 knukles
knukles's picture

Marla never sees Tyler and the Narrator at the same time, either.  But then again, that's a man dealing with his alter ego. 
Not a man embracing his own ignorance.

Got some bad bad news for MDB, BTW. 
There are some of us here who are neither day traders nor ignorant of modern financial theory and practice.  I myself, have published in serious professional journals and texts and have professionally, successfully managed institutional monies for some 30 years. 
Have you, MDB?
Have you published?
Have you managed money professionally?
Has a portion of your master's thesis been used as required reading in an MBA course?

Just askin', ya know. 

Sat, 11/26/2011 - 06:38 | 1914854 falak pema
falak pema's picture

Bare knuckles play of fight club magnitude. I gasp in applause at the incisive thrust of impressive track record. Autoproclaimed but probably merited, as I don't doubt the rectitude of  your mental boner.

Just tellin', ya know.

Fri, 11/25/2011 - 18:41 | 1914046 Alien Invader
Alien Invader's picture


You are a wanker! All that MPT does is try and eliminate systematic risk. If your portfolio is comprised of a bunch of dog shiat stocks then as it goes down the crapper it will do so, but with less volatility than if you were holding a "non-diversified" portfolio. MSFT come on!


Me thinks you are a failed GS intern. Go suck some wisdom out of Llyods cack!

Fri, 11/25/2011 - 20:10 | 1914133 Unprepared
Unprepared's picture

A failed GS intern would at least know that's a bunch of bullshit. MDB woke up one day and found himself enrolled into an advanced financial market engineering theory PhD program. The pure shit.

Fri, 11/25/2011 - 18:52 | 1914059 Catflappo
Catflappo's picture

MillionDollarBonus - that you have the name you do, and yet are so brain dead (assuming your post is not sarcastic) is to possibly sum up why the financial world is in tatters.  


I suspect on a like-for-like basis my nick would be something like QuadrillionDollarBonus, and even those in the most menial jobs in society would be named HundredThousandDollarBonus

Fri, 11/25/2011 - 19:00 | 1914064 Smiddywesson
Smiddywesson's picture

Sockpuppet, your comments reek of Robothink.  You wouldn't be Robo's younger brother would you?

Tyler, get your third alter ego out of my holiday weekend.  :-)


mean-variance optimized portfolios, so return to risk ratios are of a professional standard


LOL, very funny.  Redneck trading saved my account in 2007, so big worded gambling doesn't intimidate me.

Fri, 11/25/2011 - 20:01 | 1914121 Unprepared
Unprepared's picture

MillionDollarBaby is a real professional troll. Robotard is still an amateur compared to him.

Fri, 11/25/2011 - 19:10 | 1914077 Carlyle Groupie
Carlyle Groupie's picture

Occupy Zerohedge brah. Right on.

Fri, 11/25/2011 - 19:10 | 1914078 Iconoclast
Iconoclast's picture

Are you touchy because your million dollar bonus will be paid in shares? Unlucky...

Fri, 11/25/2011 - 19:48 | 1914110 WhiteNight123129
WhiteNight123129's picture

MDB you have a rotten sense of humor, I like that very much!

We have in our industry a lot of fakes who sell because they have a name...I work for a small hedge fund for 11 years and no down year and I am fucking tired of being the ghost of some stupid ass self promoted former high net worth broker, go red necks go rogue pros, fuck the insider hacks of Galleon and SAC, SAC got right on their short squeeze of TLB but then I shorted, they stayed in those stupid asses. SAC has some bad traders too and a lot of insider shit, they very good traders too.






Fri, 11/25/2011 - 20:03 | 1914125 WhiteNight123129
WhiteNight123129's picture

All the good pros know that mean variance is BS.

So I am assuming MDB is probably a pro criticizing the bad pros and getting some people upset while he actually has some sympathy.

Black and scholes is crap, there a lot stocks which can look like Gauss, but when the distribution is Poisson like you make a killing when other people use Gauss, as for in the money Warrants on mining or asset which reprice inflation the premium is ridiculously cheap because some idiots you the treasury curve to price compound rate which is completly disconnected from compound inflation.  BUY 50% IN THE MONEY WARRANTS WITH LONG EXPIRATION, YOU WILL BUY THE BUSINESS FOR HALF PRICE PROVIDED YOU HAVE A TINY BIT OF GOLD. I.E. THE FUTURE PRICE IN TODAYS DOLLARS YOU WILL PAY WILL FOR EXERCISE WILL BE SMALL (THE FUTURE DOLLARS WILL WORTH SHIT),  OR OUT OF THE MONEY CALLS ON EQUITY, EQUITY REPRICES MASSIVE INFLATION, AND SHORT FOREIGN CURRENCY THOSE WILL SLAUGHTERED WITH EURO IMPLOSION COMING (several exits) but that is for the short term.



Fri, 11/25/2011 - 20:15 | 1914140 css1971
css1971's picture

So... Good coke, no?

Sat, 11/26/2011 - 02:40 | 1914765 Freddie
Freddie's picture

LOL!  Do coke heads write in LONG run-on sentences?  The dude should learn to use a comma or a period once every 50 words. ;-)

Sat, 11/26/2011 - 02:13 | 1914729 Bansters-in-my-...
Bansters-in-my- feces's picture

Hey MDB,,,,

Have you ever swallowed keynesian cum you never liked...?

Fri, 11/25/2011 - 18:03 | 1914005 Caviar Emptor
Fri, 11/25/2011 - 17:34 | 1913948 Corn1945
Corn1945's picture

MSFT has been dead money for so long. I don't get why people hold it. Even the dividend yield sucks. 

Fri, 11/25/2011 - 17:39 | 1913956 Freddie
Freddie's picture

MSFT might be a decent swing trade when it goes just below $24 for a bounce to $26. Besides that, you are correct - it is dogshit.

Fri, 11/25/2011 - 19:16 | 1914081 Yamaha
Yamaha's picture

Tune into TED and see why......

Fri, 11/25/2011 - 21:12 | 1914226 trav7777
trav7777's picture

it makes Gates profits so he can help africans, how can you not want to buy into that?

Fri, 11/25/2011 - 22:19 | 1914400 Taint Boil
Taint Boil's picture

Need to help the people with AIDS now don't we?

Sat, 11/26/2011 - 00:35 | 1914612 chunkylover42
chunkylover42's picture

MSFT is a parking place for tech money when the market looks like shit.  You can maintain your bench exposure to the sector and not get killed being long beta when the maret goes down.

Sat, 11/26/2011 - 02:30 | 1914752 Freddie
Freddie's picture


MSFT is sort of like buying a tech treasury bill.

Fri, 11/25/2011 - 17:36 | 1913952 Caviar Emptor
Caviar Emptor's picture

Market is just a barometer for loose monetary policy. If that tightens, disapoints or fails to impress then stocks are a losing proposition. On top of that rides global uncertainty which adds big risk to your capital. 

Fri, 11/25/2011 - 17:39 | 1913959 Missiondweller
Missiondweller's picture

That kind of insite is why I love ZH!

Thanks Tyler, a great post.

Fri, 11/25/2011 - 19:54 | 1914114 Unprepared
Unprepared's picture

As the saying goes, "out of site, out of mind."

Fri, 11/25/2011 - 17:42 | 1913962 Freddie
Freddie's picture

Obama-UAW GM at #7?  LOL!  Must be a payoff or TARP scam for the hedgies.  Trash built by union goons.

Fri, 11/25/2011 - 18:33 | 1914036 LongBallsShortBrains
LongBallsShortBrains's picture

Your statement is an insult to real goons.

Fri, 11/25/2011 - 21:45 | 1914313 Freddie
Freddie's picture

LOL!  +1

My apologies to all non-UAW & non-Obama goons.

I think I would rather own Netflix than own GM-Obama-UAW.

Fri, 11/25/2011 - 17:45 | 1913967 High Plains Drifter
High Plains Drifter's picture

yeh sure. look at that list.   hedge funds my ass. what is the definition of a hedgefund?  animal spirits?  oh please......

Fri, 11/25/2011 - 17:49 | 1913976 falak pema
falak pema's picture

But the real money is in that other hotel across the pond :

nobody lists their sovereign eurobond shorts in this; I'm sure they all have hedges on Euro bonds. 

Fri, 11/25/2011 - 17:50 | 1913978 buzzsaw99
buzzsaw99's picture

I wouldn't pay a plug nickel for HES.

Fri, 11/25/2011 - 17:55 | 1913987 mayhem_korner
mayhem_korner's picture



Random points:

Nothing raw materials/essentials in the top 10 (don't argue Pfizer...)

How many years have Newmont and Barrack been in the top 25?

Sector divergence is pretty clear even at this level.


Fri, 11/25/2011 - 17:56 | 1913989 comrade rally monkey
comrade rally monkey's picture



that has to be some kind of backdoor deal for the HF crew to get deferred comp passed thru congress.

Fri, 11/25/2011 - 17:58 | 1913995 slewie the pi-rat
slewie the pi-rat's picture


a roach!

Fri, 11/25/2011 - 18:04 | 1914009 css1971
css1971's picture

MSFT? Are you kidding? MSFT is a dinosaur.

They had to pay Nokia to use their mobile phone software, and that is when Nokia was desperate to switch their phones to something more modern. Linux has commoditised operating systems and is eating MSFT market share everywhere but the desktop, and Apple are eating it on the desktop.


Fri, 11/25/2011 - 21:14 | 1914228 trav7777
trav7777's picture

ROTFL, no crapple isn't...hahahahaha.

Last I heard, there was no "red hat" mobile OS or anything like it.  Only CIAgle's Andriod.

Fri, 11/25/2011 - 18:10 | 1914013 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

"Because just like gold has a liquidation threat associated to it each and every day as it is the item to be sold when the margin calls start, at some point even the gold runs out,"


Any evidence of this happening anytime soon?  Wouldn't it be interesting if the central banks ended up getting all their leased gold sold right back to them in time to use it to back new money?

Fri, 11/25/2011 - 19:17 | 1914076 Doña K
Doña K's picture

To do this, you will automatically revalue gold higher.

If the new dollar is worth 10 old ones, then gold = 1700x10 = 17k/oz. and even if you think that the new money stability will lessen the price of gold, then let's say 10k/oz.

But....., if interest rates stay low, gold back up to 17k/oz.

It will take more than a generation to re-stabilize faith in paper.

Last but not least, to introduce new money backed by gold is an admission of failure of Keynesianism.

And the worst thing on top of this the gold paperholders will burn as the gold/silver ETF's will have to be liquidated and pay cents on the dollar. The ETF design was done with that in mind. Buy the real, while supress the paper. Once they have most of it, BANG! goes the ETF's.

If you want gold, you must buy physical. Even clever and seasoned guys like Celente get hosed.

Ahoy! to all my Zero hedge old timer friends



Fri, 11/25/2011 - 21:49 | 1914327 Freddie
Freddie's picture


Good post.  Most people do not know that MF Worldwide cleared futures & options trades for eTrade.  Average Joes and Jane's with eTrade options accounts got screwed too.  I bet there were other brokerages that used MFW for options/futures.  

Fri, 11/25/2011 - 18:14 | 1914018 John_Coltrane
John_Coltrane's picture

Useful information.  Looks like DTG and CHTR have the largest chunk of their market cap held by these funds.  Should be good put candidates.  I've added them to my list.  But so many loser companies: e.g. OPEN, SODA, GMCR, TZOO, NFLX, FSLR that may be better candidates for short positions.  Not to mention GRPN!!!  (Yes, wait for any rally to $20 and buy JAN GRPN puts)  GRPN, OPEN and FSLR are all going to zero.



Fri, 11/25/2011 - 18:25 | 1914028 Bam_Man
Bam_Man's picture

"And the first ones now will later be last,

For the times they are a-changin'"

Fri, 11/25/2011 - 18:34 | 1914038 vipmoneymachine
vipmoneymachine's picture

Blue Horseshoe loves Anacott Steel.

Fri, 11/25/2011 - 18:43 | 1914048 RobotTrader
RobotTrader's picture

Girls in a "brawl" over Victoria's Secret yoga pants.

Looks like LULU has some competition now.


Fri, 11/25/2011 - 21:15 | 1914233 trav7777
trav7777's picture

gee...who do i see in that pic?

Sat, 11/26/2011 - 02:34 | 1914757 Freddie
Freddie's picture

Obama voters with welfare checks?

Fri, 11/25/2011 - 18:49 | 1914054 Catflappo
Catflappo's picture

JPM stands like like a sore-thumb there doesn't it ?   How could it be down soooo much, and yet everyone is still soooo long ?

Fri, 11/25/2011 - 19:09 | 1914073 Seasmoke
Seasmoke's picture

and the TOP 3 LOSERS YTD......pretty much sums everything of the past 2 years

Government Motors



Fri, 11/25/2011 - 19:16 | 1914082 ZeroPoint
ZeroPoint's picture

Do you think Bill Gates shorts his own empire these days?

Sat, 11/26/2011 - 02:27 | 1914749 OCTOPVS
OCTOPVS's picture

do you think bill gates has the most powerful trading software these days?

Fri, 11/25/2011 - 23:12 | 1914492 slewie the pi-rat
slewie the pi-rat's picture

Troll Alert!!!

spamming 2 strings in2 minutes!

Fri, 11/25/2011 - 19:32 | 1914098 Cult of Criminality
Cult of Criminality's picture

Call me crazy but I just bought at the latest dump. $30.94

Silver that is....Could not resist it has been a while.

 Cheers, Happy Holidays to all

Fri, 11/25/2011 - 19:36 | 1914101 blindman
Fri, 11/25/2011 - 19:42 | 1914109 Carlyle Groupie
Carlyle Groupie's picture

nice thx!

Fri, 11/25/2011 - 20:33 | 1914171 High Plains Drifter
High Plains Drifter's picture

some of these hedge fund managers need to get on the jim cramer mad money show and play the "am i diversified "  game........

Fri, 11/25/2011 - 21:41 | 1914303 Dr. Engali
Dr. Engali's picture

What in the hell are they doing with GM?

Fri, 11/25/2011 - 22:10 | 1914377 Ku
Ku's picture

freakin gold bubble my arse, not one gold stock on that bloody list.


Fri, 11/25/2011 - 23:08 | 1914481 LowProfile
LowProfile's picture


But true.

This is gonna take a while.

Sat, 11/26/2011 - 08:52 | 1914912 Clint Liquor
Clint Liquor's picture

not one gold stock on that bloody list.

Except for Newmont and Barrick.

Fri, 11/25/2011 - 23:07 | 1914479 OCTOPVS
OCTOPVS's picture

Hey Jim, this is Paul Tudor Jones calling from Gstaad. Im shorting SP's, pyramiding gold, and BTW i dont own any of your bullshit. Does it bother you that im just a few months older and a couple billion up this year? 

Sat, 11/26/2011 - 05:16 | 1914834 cliffordg
cliffordg's picture

To: MDB-Used to pull the underwear up over kids heads like you. Now just gaze at sky.

Sat, 11/26/2011 - 15:38 | 1915634 Lord Koos
Lord Koos's picture

I'm surprised how many banks are on that top 50 list.  These hedgies must really have faith in the (bailout) system.

Sun, 03/04/2012 - 22:51 | 2223052 alphastratus
alphastratus's picture

We're constantly surprised at how many of the same names these hedge funds are all in:

Do NOT follow this link or you will be banned from the site!