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The World's Biggest Hedge Fund Hotel Just Got Bigger - 226 Hedge Funds Owned Apple As Of March 31

Tyler Durden's picture




 

 

According to some estimates, there are currently about 500 hedge funds in the world with AUM over $100 million. This means that roughly half of these asset managers collected performance and management fees for one simple task: to hold AAPL stock. According to the latest just released Hedge Fund Tracker from Goldman Sachs, a record high number of hedge funds, or 226, were long AAPL stock as of March 31, just days ahead of its all time highs, in what can only be described as the world's biggest hedge fund hotel (California). Because the only thing that is roughly comparable to the chart of the recently parabolic move higher in the AAPL stock is the number of hedge funds holders: 216 at the end of 2011, 209 at the end of Q3, 181 at the end of Q2, 173 at the end of Q1 2011, and so on. And while they may all be long the stock for their own "fundamental" reasons, the reality is that whenever there is a scramble for safety, on margin calls or simply due to general Risk Off behavior, it is the winners that would get sold, as selling beget selling, and eventually liquidations. Only in this case, 226 hedge funds all have the same winner. So far the AAPL drop has been relatively benign, not least of all because the stock is the NASDAQ, which just happens to be the growth frontrunning of the 2012 stock market. But what happens if the Fed continues to push off the NEW QE announcement: just how much of a general collateral redemption onslaught can the said hotel withstand before its tenants all scramble to leave at the very same time?

Nubmer of funds owning AAPL stock:

Full breakdown of the 50 most widely held HF stocks per Goldman Sachs:

 

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Tue, 05/22/2012 - 19:45 | 2453310 Coke and Hookers
Coke and Hookers's picture

Everything can be turned into a bubble. Even a design studio in California that doesn't even know how to build their own products.

Tue, 05/22/2012 - 19:46 | 2453314 SilverTree
SilverTree's picture

An AAPL a day...

Tue, 05/22/2012 - 19:53 | 2453342 fonestar
fonestar's picture

Heraclitus ponders thus, if an AAPL were to fall from the Grexit tree in a perfect vacuum, would the momentum chasers on CNBC notice?

Tue, 05/22/2012 - 20:06 | 2453385 Xkwisetly Paneful
Xkwisetly Paneful's picture

52 week lows in gold and silver yet or not quite?

 

Tue, 05/22/2012 - 20:08 | 2453390 Aziz
Aziz's picture

Bubbles can always get bigger, whether it's AAPL or fiat currency.

Tue, 05/22/2012 - 20:15 | 2453409 Xkwisetly Paneful
Xkwisetly Paneful's picture

How much tax is AAPL paying thanks to ZIRP?

You know that 99.95% tax on interest income.

Given their pile of cash and cash equivalents, exactly how much is AAPL foregoing?

 

Tue, 05/22/2012 - 20:45 | 2453495 Freddie
Freddie's picture

Hey Tyler's - tell Snorg Tees to tell the girls to wear padded brassieres to make em bigger or use photoshop.

Tue, 05/22/2012 - 21:58 | 2453683 Freddie
Freddie's picture

The red head in the Snorg Tees and t-shirts is hot.  I am posting this so hopefully the Tyler's bot serve up Snorg ads versus the 2012 Muslim ads.

Wed, 05/23/2012 - 07:50 | 2454302 old naughty
old naughty's picture

The hotel revolving door is jammed as in-coming meets OUT-GOING...

wonder what would it be like if HFT is triggered then?

Tue, 05/22/2012 - 20:14 | 2453400 kalasend
kalasend's picture

"...a design studio in California that doesn't even know how to build their own products..." You learn something. They build the most value-adding parts of the product. Period. What you expect a $150k salaried engineer from Cupertino to do soldering, molding and assembly? Get your minds together: Does Apple make high quality product? YES Is AAPL over-priced? YES Does Apple make high quality product? YES Is AAPL over-priced? YES Does Apple make high quality product? YES Is AAPL over-priced? YES Does Apple make high quality product? YES Is AAPL over-priced? YES Does Apple make high quality product? YES Is AAPL over-priced? YES

Is it so hard to seperate facts?

Wed, 05/23/2012 - 02:59 | 2454110 1984
1984's picture

"... Does Apple make high quality product?..."

NO.  My MacBook died 3 times already - charging and battery issue and overheating.

 

But they are very pretty.

Wed, 05/23/2012 - 14:56 | 2456076 kalasend
kalasend's picture

I'm a software guy. Write your complaint to Foxconn.

Tue, 05/22/2012 - 20:28 | 2453449 ACP
ACP's picture

Hedge fund hotel soon to be heartbreak hotel...

Tue, 05/22/2012 - 21:13 | 2453564 jus_lite_reading
jus_lite_reading's picture

And it will continue to rise as even more hedgefunds line up for the last straws of revenue and await the retail suckers to come running in... except that they won't come in and these guys will be fighting their way out the door as the lastman left turns out the lights...

Already the slaughter has begun...

R.I.P Sour AAPL.

 

Wed, 05/23/2012 - 03:42 | 2454142 q99x2
q99x2's picture

There's a bubble in her naked shorts.

Tue, 05/22/2012 - 19:45 | 2453311 malikai
malikai's picture

BTFD

Tue, 05/22/2012 - 19:46 | 2453316 StockHut
StockHut's picture

Apple: all the cool kids are doing it.

Tue, 05/22/2012 - 19:48 | 2453326 SilverTree
SilverTree's picture

AAPL is a hell-of-a-drug.

Tue, 05/22/2012 - 19:47 | 2453318 Coke and Hookers
Coke and Hookers's picture

Apple: The Facebook of hardware.

Tue, 05/22/2012 - 20:23 | 2453412 kalasend
kalasend's picture

AAPL is FB of hardware.

There. Better. Seperate your fucking financial asses with us nerds, you mother fukka

No, i don't work for Apple. Just sad to see majority of ZH'er get desperately ignorant outside of money matters.

Tue, 05/22/2012 - 21:44 | 2453644 Dapper Dan
Dapper Dan's picture

Kalasend

Your world only seems small, go outside and take a breath, get out of your folks house and see the world, go to a foreign country for a week with minimal cash. Try to talk to someone verbally instead of texting.

Read “Into the wild”

Most importantly get some years behind you before spouting such childish tripe!

 

Wed, 05/23/2012 - 15:21 | 2456185 kalasend
kalasend's picture

LOL. Your world is fucking small. What? buy phys gold, buy can foods, buy bullets, find a cave. I'd say 80% of ZH'ers don't read anything other than those.

Tue, 05/22/2012 - 19:48 | 2453325 Gypsyducks
Gypsyducks's picture

Oh well at least it's not FadeBook

Tue, 05/22/2012 - 19:52 | 2453340 veyron
veyron's picture

CrAAPL > FUCK'd BOOK

Tue, 05/22/2012 - 19:57 | 2453351 nmewn
nmewn's picture

Everyone of them eyeballin the other, with their finger on the sell button...great sport.

Can you say crowded trade?

Tue, 05/22/2012 - 19:59 | 2453358 I am a Man I am...
I am a Man I am Forty's picture

Not just an exit, but an entrance, smart money buying into this selloff.

Tue, 05/22/2012 - 19:59 | 2453359 The Watchman
The Watchman's picture

Hey..... This AAPLs got worms damn it!!!!!!!

Tue, 05/22/2012 - 20:00 | 2453362 The_Passenger
The_Passenger's picture

I have a general question here:

How important is that "average days volume to liquidate HF position"?

I mean two days for AAPL doesn't seem to be that much of a big deal. If I would only look at this number I would be much more concerned with for example ESRX and its 29 days average daily volume to liquidate the whole position!

Are these volume numbers maybe too much inflated because of HFT that would only move against you in case of a sell off? 

Thanks for any help! 

 

Tue, 05/22/2012 - 20:00 | 2453363 francis_sawyer
francis_sawyer's picture

 "The things you own end up owning you..."

 ~Fight Club

 

Tue, 05/22/2012 - 20:01 | 2453370 Motley Fool
Motley Fool's picture

If it wasn't for the Bernanke put, this would be an excellent point to short.

Tue, 05/22/2012 - 20:02 | 2453372 cherry picker
cherry picker's picture

People don't get it do they?

We are in a world wide downturn that sees no way up.  The 99% are starting to feel it.  The 99% don't all live in the USA for those who cannot see past borders.

Governments all over as still spending more than they are bringing in.  The poor are getting poorer.

Those who are in power are still playing the same game as a few years ago.

Governments are beefing up military.  The only ones who are going down are the little people, unless......

But that won't happen will it?  Keep the food stamps going until after the election.

Tue, 05/22/2012 - 20:08 | 2453392 Xkwisetly Paneful
Xkwisetly Paneful's picture

Half the world lives on $240/mo or less.

99% in America, try again and start at the top this time and not the bottom.

Tue, 05/22/2012 - 20:09 | 2453395 Coke and Hookers
Coke and Hookers's picture

Apple has revenue of 108 billion (2011) and 34 bilion in profits. Foxconn, which manufactures their stuff, had 103 billion in revenue and 2,6 billion in profits. Apple's revenue and profit is mostly just 'added' value to Foxconn's products. Apple basically squeezed Foxconn to hand over all profits from the stuff to Apple. Is that a sustainable approach, given the fact that Apple no longer has manufacturing knowhow? When will Foxconn turn tables and grab Apple by the balls?

What if US-China relationship seriously hits the rocks and Foxconn ditches the contract? How much time will it take to move production somewhere else? What kind of profit margin will that leave Apple? How long will it take and for how long will Apple be without income while a factory somewhere else is being built or retooled and staff trained? How much will Apple stock tank if that happens? 50%? 70%

Apart from banks, I doubt there's a company in the world that has a more vulnerable business model than Apple. If I had Apple stock I'd sell ASAP. It's just a question of time until Apple crashes in a monumental fashion.

Tue, 05/22/2012 - 20:21 | 2453427 kalasend
kalasend's picture

Do you know how fucking many contract mfg'er are lining up behind Foxconn to take its place? Foxconn turning the table? Not in a million years. 

You should worry about China's labor cost in general. As long as the poor young men and women still willing, and are China-legal, to be enslaved (by not just Foxconn, but the likes of other Taiwan-based mfg'ers), AAPL's supply chain is intact.

Tue, 05/22/2012 - 20:37 | 2453476 Coke and Hookers
Coke and Hookers's picture

It's not that simple dude. Here's an example: I could easily pick up the phone and call a few engineers that would be able to come together and design a car - engine, transmission, electronics and all. But I don't know any that could build it. The manufacturing part is not some inconsequential thing that anybody can do. The process, materials tech and everything required for manufacturing is realtively heavy duty. Now, say I locate a group that can build my new inventive car. I send them the blueprints my engineers made. So what has happened? I still don't know how to build the car but the guys who build it now know how to design one. Say they tell me to fuck off and start designing their own based on my knowhow - and price it lower. What then? I'll most likely be out of business eventually, even if I can find another group of guys to manufacture my stuff.

The people over in China making this stuff are not dumb animals that sit and solder stuff. They are perfectly capable of designing this stuff and they will.

I'm using a Lenovo laptop to write this post. It used to be IBM. Lenovo laptops are better and more innovative than IBM laptops were and Lenovo is adding market share fast. When do you think you'll see a Chinese company replacing Apple the same way? The answer is soon.

Apple's business model is a disaster anyway you look at it. They don't control their manufacturing (which is ALWAYS core activity of a 'manufacturing company') and they don't protect their knowhow. Their profits are based on arm twisting the people who will fuck them later. Their market share is based on 'trendiness' which is good short term, disastrous long term.

Wed, 05/23/2012 - 15:17 | 2456170 kalasend
kalasend's picture

Dude, your entire 1st paragraph is non-existing scenario. It is only valid imagination because you are not a car designer and got no association with the industry.You don't know anybody who could build the car from design because you don't have the connections.

Here, let me pick up from where you left off, say, Foxconn suddenly gave a call to an Apple product mgr saying they need to raise unit price of iPads 50% higher. Then all this prod mgr would do is to call any of Sanmina, Quanta, Flextronics, Solectron, Celestica, etc. and ask who wants to take Foxconn's place. Suppose one does (who wouldn't?), Foxconn will be left to pay for all the parts that will never come together as an iPad. They can resell them to whoever Apple picks next, but it would be as easy for Apple to "ask" the new mfg'er to buy all new parts so Foxconn is screwed to the sky.

Let me just ask this, why do these mfg'er feel okay about such thin share of profit margins when their clients collect hundreds if not thousands on a unit?? 

And now let me tell you this, Foxconn is almost in losses exclusively with other thin volume products in order to win contracts for high volume products. Any hiccup in the whole mfg chain is going to be overly destructive to Foxconn but limited damage to Apple, and hugely profitable to Foxconn's competitors.

The only area I would worry about Apple's mfg base, is when one day the Chinese workers wake up to their fair share of profit, and demand to be paid rightly to the point where Foxconn has to pass the bill onto Apple. I think that day will come.

Bottome line, you worry about the right area, but the wrong player. 

Tue, 05/22/2012 - 21:04 | 2453538 Coke and Hookers
Coke and Hookers's picture

One thing I forgot to mention. Increasingly, design is becoming a function of hardware tech. Only that which can be manufactured can be designed. The actual hardware development mostly takes place in Asia these days. This means that one of the most inportant drivers of innovation has been outsourced by Apple and is out of its control. To some extent, Apple engineers are just monkeys who cad assemble a fashion product that someone else has developed top to bottom.

Tue, 05/22/2012 - 21:22 | 2453587 Common_Cents22
Common_Cents22's picture

why would foxconn "ditch" a multi billion contract?    are they going to come out with Fapple products?

would you cut your multi billion customer off?  for what?   what is the gain in that?

Wed, 05/23/2012 - 04:18 | 2454162 Floodmaster
Floodmaster's picture

The U.S. is a big costco

Tue, 05/22/2012 - 20:12 | 2453401 FieldingMellish
FieldingMellish's picture

You can check-out any time you like, but you can never leave!

Tue, 05/22/2012 - 20:15 | 2453408 All Out Of Bubblegum
All Out Of Bubblegum's picture

Why are people always surprised by market and money manipulation by the Big Dogs? It's part of the historical record.

 

 

“The active cooperation of Grover Cleveland in the manipulation of the currency by the Rothschilds of London and J. Pierpont Morgan of New York was very unpopular with the people. He was accused by both leading Democrats and Republicans of having betrayed his party and of having turned his back upon the Democratic platform of 1884 upon which he was elected.” 

Senator William M. Stewart (Nevada, 1908)

http://unicornpoo.wordpress.com/2012/05/22/even-senators-used-to-speak-o...

 

Wed, 05/23/2012 - 05:50 | 2454215 Disenchanted
Disenchanted's picture

 

 

 

Didn't you hear? This all just started when the Muslim Obama became President.

 

Just ask Freddie.

Tue, 05/22/2012 - 20:16 | 2453414 ArrestBobRubin
ArrestBobRubin's picture

AAPL? Nope, no Bubble here. Safe Chart for sure. And we sure searched high and low, just like we did in the dot com bust, tech wreck, and housing farce. Oh, and Facebook. S'all good!

Tue, 05/22/2012 - 20:17 | 2453417 the 300000000th...
the 300000000th percent's picture

God, i would love to see APPL go down in flames. Its really all i want for Christmas

Tue, 05/22/2012 - 20:18 | 2453423 Saucy-Jack
Saucy-Jack's picture

AAPL stock is slave labor arbitrage that is pretty close to ending. Can you say "Chinese workers want some real fuckin wages and soon, bitchez?"

Tue, 05/22/2012 - 20:30 | 2453455 lotsoffun
lotsoffun's picture

and can you say 'hi.  i'm chinese.  we build this piece of i-junk toy from top to bottom. don't think we can figure out how to make one from scratch, considering we already do that'??  karma is a b*tch.  jobs checked out.

 

Tue, 05/22/2012 - 20:34 | 2453469 HaroldWang
HaroldWang's picture

I trade in and out of AAPL several times a week on momemntum long or short side. The case for it being fairly cheap on a relative basis can certainly be made at 11x forward earnings. But that's meaningless really. If they sell less product than expected, forward p/e means nada and the rush to get out is on. When trading AAPL never, ever take your eyes off the screen and keep your finger on the trigger. It can move fast and furiously.

Tue, 05/22/2012 - 22:51 | 2453796 Bob Sacamano
Bob Sacamano's picture

Don't have time to trade daily (even weekly sometimes), but shorted AAPL at 605 on 4/18, doubled the short position at 605 again on the big earnings rally (which had very mediocre volume for that size move) and should have made it triple short on today's rally.  AAPL is headed to 450.  FB going sour is not helping -- some folks are coming back to AAPL after selling it in order to ride FB (whoops).

Wed, 05/23/2012 - 07:36 | 2454288 francis_sawyer
francis_sawyer's picture

How good are you at predicting the outcomes of mutton busting?

Tue, 05/22/2012 - 21:16 | 2453574 dolph9
dolph9's picture

Just how many digital devices can people buy and sink their heads into while food and gas rises all around them?

Reality is the worm in AAPL's core.

Tue, 05/22/2012 - 21:18 | 2453581 geewhiz190
geewhiz190's picture

many of these funds own less than 100 shares

Tue, 05/22/2012 - 21:19 | 2453583 Trimmed Hedge
Trimmed Hedge's picture

Is everybody in..?

Is everybody in?

The ceremony is about to begin....

Wed, 05/23/2012 - 03:16 | 2454122 dehdhed
dehdhed's picture

Apple hasn't begun to buy back 10 billion worth. That doesn't start till September 30th.
All those hedge funds own 3 percent and the hypothetical "what if they all rush to the exits at the same time" scenario, doesn't even allow for the nonfictional buyback that would gobble it all up.

Wed, 05/23/2012 - 06:04 | 2454223 Disenchanted
Disenchanted's picture

 

RE:

Is everybody in..?

Is everybody in?

The ceremony is about to begin....

 

 

Good call..

 

An American Prayer

http://www.youtube.com/watch?v=FPZsYAphUSg

Tue, 05/22/2012 - 21:43 | 2453623 earleflorida
earleflorida's picture

"The Niche Market of Spoiled Chinese Bureaucrats & Wealthy Brats, fomenting Ferment Dissension?"  [sour apples?/ or 'Boone's Farm' for you?]

What Russian's, Indian's, Chinese [?], and Brazilian's want?

Affordable, reliable SmartPhone's via ZTE & Xiaomi Corp. that are now Chinese manufactured --- Home Grown, with neighboring S. Korea's Samsung the Premiere SmartPhone 2013!!!

http://www.readwriteweb.com/mobile/2012/01/chinese-smartphone-maker-pass...   http://www.newspriyo.com/business/2012/04/25/chinas-smartphone-maker-sel...        Sorry, oops __ click on google search box :(

'whistling past the graveyard -- selling into winded strength -- all the while pissing on the iApple`tree -- this faded and arid orchard never pruned of suckers -- the arborist sharpens his axe -- whilst, the hedges wrestle the june bug'

Wed, 05/23/2012 - 00:52 | 2453846 billsykes
billsykes's picture

There are more than 500 hedge funds w. aum over 100m- maybe 10-20k in the world.

 

http://www.thetradenews.com/newsarticle.aspx?id=358  10-15k

aima-canada.org/doc_bin/AIMA_Primer.pdf - 6k

 

http://www.hedgefundjapan.com/need.html 10k w. 25% under 25m aum so 7.5k

 

last yr over 1,100 funds launched globally

http://blogs.wsj.com/source/tag/hedge-funds/

 

 

Wed, 05/23/2012 - 00:01 | 2453894 Muppet
Muppet's picture

"There are currently about 500 hedge funds in the world with AUM over $100 million".

That sentence is ridiculous..... someone needs to write better.  Do the 500 funds have >$100M in total or each?

Wed, 05/23/2012 - 01:17 | 2454020 Sandmann
Sandmann's picture

When the US Congress gets upset that fake Chinese components are in the electronics systems of F15, Apache, Seahawk etc

http://www.spiegel.de/wissenschaft/technik/china-ware-in-us-waffen-senat...

we can only assume whoever buys an iPad is automatically directed to an Apple stock buying site when credit card details are entered into iCloud

Wed, 05/23/2012 - 01:17 | 2454021 MayerRothschild
MayerRothschild's picture

How much would AAPL be worth with out T(AT&T)?  Without them there wouldn't be so many iPhones... Yet they are somehow worth more...

Wed, 05/23/2012 - 02:23 | 2454082 Tom Green Swedish
Tom Green Swedish's picture

T was actually worth more without AAPL then they are now.  60 billion dollar market decline since the release of the first Iphone.

Thu, 05/24/2012 - 01:28 | 2457950 MayerRothschild
MayerRothschild's picture

Which I find odd... AT&T makes more money when then Apple when someone buys an iPhone with a 2 yr contract... The data plan alone is ually around $30/month

Wed, 05/23/2012 - 02:17 | 2454080 Tom Green Swedish
Tom Green Swedish's picture

When in doubt. Buy Apple Stock.

Wed, 05/23/2012 - 03:04 | 2454111 dehdhed
dehdhed's picture

The number of funds go up but the percentage owned has gone down.
Altogether they own a little more than one days' trading volume.

Wed, 05/23/2012 - 05:31 | 2454203 ebworthen
ebworthen's picture

Bubblelicious.

Apple is one bad hack/virus/launch failure away from being Dell or HP.

Nice products and they have slaughtered the competition the past five years but Steve isn't here anymore.

Fri, 05/25/2012 - 02:49 | 2461461 agagshoes
agagshoes's picture

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