At the very least, regulatory filings this past quarter reveal no shortage of investors who are building meaningful positions in large capitalization technology stocks.
This article in Institutional Investor this past Friday highlights that Ralph Whitworth of Relational Investors LLC now owns 1 percent of Hewlett-Packard (HPQ). He also secured a board seat.
The article also points out Baupost's Seth Klarman disclosed a substantial position in HP.
Baupost has assets under management north of $ 20 billion. So while this HP position may make up an awful large percentage of the stocks Baupost owns that trade in the U.S., it's actually a relatively small part of the whole. This Bloomberg Businessweek article says Baupost had $ 3 billion in U.S. stocks on September 30th.
So that $ 3 billion in stocks make up only a small portion of the portfolio.
From that point of view it reveals less but still a meaningful move.
Here's the top five Baupost equity positions that trade on a U.S. exchange:
Top Five Positions
BP ADS (BP): 16.4% of the portfolio. More than doubled the position (increased position ~150%).
Hewlett Packard (HPQ): 15.4% of the total portfolio. New position.
ViaSat (VSAT): 11.6% of the total portfolio. Minor increase to position size (~ 4%).
News Corp. (NWSA): 10.8% of the total portfolio. Slight increase to position (~10%)
Microsoft (MSFT): 9.9% of the total portfolio. No Change.
The portfolio is, not unlike Berkshire Hathaway's (BRKa), very concentrated with roughly 50% in the top five.
Berkshire's top five is more like 75% as of the latest filing.
There's been a notable number of large capitalization technology stock purchases by those not normally associated with making such investments. Some for the first time ever. Most notable, of course, is Warren Buffett.
Last week we learned he made a major purchase (nearly $ 11 billion) of IBM (IBM) and a much smaller (~ $ 200 million) investment in Intel (INTC).
Berkshire Hathaway's 3rd Quarter 2011 13F-HR
Two stocks not too long ago many thought Buffett would never have an interest in.
What has suddenly put these on the radar? Price relative to value, of course. When a perceived discount to a conservative estimate of intrinsic value exists, value-oriented investors usually begin to take notice. What seems an uninteresting alternative at the higher price, considering the specific risks involved, becomes front and center.
Paying a low price relative to well-judged value (conservatively calculated, of course) may help regulate investment risk, but reveals nothing about the likely near-term or even somewhat longer-term price action of a stock.
Adam
Baupost Group 3rd Quarter 2011 13F-HR
Long positions in HPQ, BP, MSFT, and INTC
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This site does not provide investing recommendations as that comes down to individual circumstances. Instead, it is for generalized informational, educational, and entertainment purposes. Visitors should always do their own research and consult, as needed, with a financial adviser that's familiar with the individual circumstances before making any investment decisions. Bottom line: The opinions found here should never be considered specific individualized investment advice and never a recommendation to buy or sell anything.
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Applying Newton's Fourth Law
Origin of Newton's 4th Law?
"Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac's talents didn't extend to investing: He lost a bundle in the South Sea Bubble, explaining later, 'I can calculate the movement of the stars, but not the madness of men.' If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases." - Warren Buffett
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Find good businesses; buy at nice discounts to value; stay within limits & stick to what's understandable (necessarily unique for each investor); minimize trading, frictional costs, & errors of all kinds.
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This site's emphasis? Put simply, it's on finding and buying -- with the long-term in mind -- good businesses at a plain discount to conservatively estimated value; it's on selling shares of those well-bought high quality business reluctantly. The view here is that selling makes sense only when core economics become permanently impaired, prospects have been misjudged, market price not just somewhat but, instead, meaningfully exceed per share intrinsic value, or opportunity costs are high. Buy/sell decisions aren't just an opportunity to increase returns; they're also an opportunity to make mistakes. It's easy to overemphasize the former and forget the latter. The focus here is on minimizing trading, frictional costs, and errors of all kinds; it's on staying comfortably within realistically assessed limits. First and foremost is the view that an investor should never make a specific investment based upon what someone else thinks. In other words, what makes sense to own is necessarily unique for each investor and it'd be unwise to not act accordingly. So, more generally, this site simply attempts to better understand some useful principles and ideas in context of investment. It's about, in a practical sense, what tends to work over the long haul as well as what, at times, gets the investor into trouble. It's not about grand theories in finance and economics. These too often distract from what matters or, worse yet, lead to costly misjudgments. As a result, they are mostly viewed with a healthy dose of skepticism here. Otherwise, the best thinking across disciplines should be learned well then put to good use in a way that's uniquely suitable.
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Notable Quote
"Warren and I have not made our way in life by making successful macroeconomic predictions and betting on our conclusions.
Our system is to swim as competently as we can and sometimes the tide will be with us and sometimes it will be against us. But by and large we don't much bother with trying to predict the tides because we plan to play the game for a long time.
I recommend to all of you exactly the same attitude.
It's kind of a snare and a delusion to outguess macroeconomic cycles... ...very few people do it successfully and some of them do it by accident. When the game is that tough, why not adopt the other system of swimming as competently as you can and figuring that over a long life you'll have your share of good tides and bad tides?" - Charlie Munger
Our system is to swim as competently as we can and sometimes the tide will be with us and sometimes it will be against us. But by and large we don't much bother with trying to predict the tides because we plan to play the game for a long time.
I recommend to all of you exactly the same attitude.
It's kind of a snare and a delusion to outguess macroeconomic cycles... ...very few people do it successfully and some of them do it by accident. When the game is that tough, why not adopt the other system of swimming as competently as you can and figuring that over a long life you'll have your share of good tides and bad tides?" - Charlie Munger