Back in February, some were surprised to find that [8]in the quarter (Q4 of 2014) in which Tepper again called the end of the bond bull market [9](incorrectly), dismissed Bill Gross' PIMCO exit as irrelevant [10](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 [11], just before he said was "nervous" and unlike now, said "not to be too freakin' long [12]." 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.
[13]
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 [14]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...
