Billionaire investors turn bearish as U.S. stocks hit record highs

Mon Aug 15, 2016 3:26pm EDT
 
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By David Randall

NEW YORK Aug 15 (Reuters) - A number of big-name hedge fund investors soured on U.S. stocks in the second quarter and moved to gold and other bearish bets, failing to anticipate the stock market rally in the current quarter.

George Soros, Jeffrey Gundlach and David Tepper were among the billionaire hedge fund investors and money managers who slashed their long equity positions in the second quarter, according to regulatory filings.

Gundlach, who oversees more than $100 billion at DoubleLine, told Reuters last month, "The artist Christopher Wool has a word painting, 'Sell the house, sell the car, sell the kids.' That's exactly how I feel - sell everything. Nothing here looks good."

Portfolio disclosures of long positions by hedge fund managers, which come 45 days after a quarter ends, are closely watched for their insight into the bets of managers in the roughly $3 trillion hedge fund industry and as a source of investment ideas.

Tepper, who did not exercise call options held in the prior quarter that would have allowed him to buy shares in the S&P 500 and PowerShares QQQ Trust, is cautious about the stock market, according to people familiar with his positioning on Monday.

Soros, who once called gold "the ultimate bubble," added a position in Barrick Gold Corp valued at $263.7 million to his fund during the first quarter.

Shares of the gold mining company are up nearly 185 percent over the last 12 months as gold has rallied the most since 2008 on concerns about central bank easing and Britain's vote to leave the European Union.

Billionaire hedge fund activist investor Icahn, meanwhile, had a net short position of 149 percent in the second quarter that was little changed from the first quarter, according to comments from company management on a conference call earlier this month.

Those bearish positions could hurt hedge fund managers at a time when many in the industry are struggling to keep their investors happy and justify their fees. (Reporting by David Randall; Editing by Jennifer Ablan)