Lone Pine Capital 13F Holdings Analysis

This post is being written as part of HedgeFundBlogger.com’s Investment Securities Tool which analyzes the holdings of hedge fund managers. Below are Q3 Holdings details as filed by Lone Pine. These are by there very nature outdated as they represent only some of the hedge funds holding at one point in time.

Please click on the image below to view a list of securities which Lone Pine Capital has purchased since their last filing.

Please click on the image below to view a list of securities which Lone Pine Capital has partially or completely sold since their last filing:

The securities listed within this most recent 13F filings included:

• America Movil Sab De Cv (AMX)
• Mastercard Inc (MA)
• Pricelinecom Inc (PCLN)
• Qualcomm Inc (QCOM)
• Sandridge Energy Inc (SD)
• Visa Inc (V)
• Weatherford International Ltd (WFT)
• Xto Energy Inc (XTO)
• Crown Castle International Corp (CCI)
• Dolby Laboratories Inc (DLB)
• First Horizon National Corp (FHN)
• Hansen Natural Corp (HANS)
• National City Corp (NCC)
• Precision Castparts Corp (PCP)
• Deltek Inc (PROJ)
• Amazoncom Inc (AMZN)
• Brookfield Asset Management Inc (BAM)
• Cb Richard Ellis Group Inc (CBG)
• Entergy Corp (ETR)
• Google Inc (GOOG)
• Illumina Inc (ILMN)
• Infosys Technologies Ltd (INFY)
• Monsanto Co (MON)
• Dicks Sporting Goods Inc (DKS)
• Eagle Materials Inc (EXP)
• Fastenal Co (FAST)
• Msc Industrial Direct Co (MSM)
• Saic Inc (SAI)
• Teradata Corp (TDC)

Source: SEC 13F Filing | MFFAIS

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Tags: Lone Pine Capital, Lone Pine Capital Partners, Lone Pine Capital Management, Lone Pine Hedge Fund Holdings, Securities owned by Lone Pine Capital, Stephen Mendel Jr., Stephen Mendel Junior Hedge Fund Manager

Investing Guide | Hedge Funds

I get emails from HNW investors looking for more information on hedge funds. This page will serve as the long-term destination for hedge fund investing information for High Net Worth Investors. It is not a recommendation to invest in anything, follow any strategy or rely on advice found here. These are simply high-level introductions at a high level and no investments should ever be made without seeking competent licensed assistance from a wealth management professional and/or legal counsel.

Without further disclosure details here are the first few investor oriented resources which we have made available:

• Hedge Fund Due Diligence Tips
• What is a Hedge Fund? (Video Introduction)
• How To Invest In Hedge Funds
• Hedge Fund Investments (A Video Overview)
• Who Can Invest in Hedge Funds?

Please also feel free to download my free book on hedge funds by clicking here.

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http://richard-wilson.blogspot.com/2008/10/guide-to-investing-tips-research-online.html

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Hedge Fund Video Notes

Here is a short video on recent hedge fund developments related to A to B Capital, The Children’s Investmetn Fund and Avenue Capital. If you are reading this via my daily hedge fund newsletter please click here to watch the video now.

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Tags: A to B Capital, Childrens Hedge Fund, Avenue Capital, hedge fund, hedge fund manager

Hedge Fund Vs. Bank Blowups

Last week a member of a hedge fund professionals networking group on LinkedIn asked a question about why we have seen more investment bank blow ups than hedge funds.

In the past 2 years there have, of course, been hedge fund blow ups starting with Amaranth in September 2006. Unlike troubled investment banks not all hedge funds suffering losses and closing downs receive press coverage. We have seen a few notable names, such as hedge funds managed by Bear Stearns, Sowood, Peloton and a few others mentioned in the papers. Many more troubled hedge funds managed to avoid major headlines. It’s not necessarily clear what exactly constitutes a hedge fund blow up. For the names mentioned above the loss was sudden and quick and resulted in eventual termination of the funds. Amaranth lost close to six billion dollars in just one week. Peloton earned a spectacular return of almost 90% in 2007 just two months before the blow up. These, however, are extreme cases. Many hedge funds suffer the slow death as they enter into periods of large draw downs. In this study we tried to identify hedge funds that have terminated since January 2008.

To analyze the rate of failure among hedge funds this year, we ran the analysis on the universe of hedge funds, fund o funds and CTA that report to Barclay’s Global Data Feeder database. To identify the blown up funds we first looked at the funds that stopped reporting performance to the database. We realize that there may be various reasons why a hedge fund would stop reporting to the database, but we believe that primary reason would be a significant drop in performance. To avoid double counting we focused primarily on the “On Shore” funds reporting performance in United States Dollars. There were 3,998 funds that reported performance at the beginning of the year. Of these funds 366 have not reported their performance since May 31, 2008. Chart 1 shows the distribution of the cumulative return of these funds since January 2007 (or later if the funds launched after January 2007).

Out of the 364 funds -156 funds or (43%) have had negative cumulative performance through their last reported date. Chart 2 shows the distribution of Maximum draw down achieved during the same period.

As we mentioned above we cannot be sure whether or not the funds that stopped reporting to Barclay’s database have indeed blown up. We do, however, consider it likely that hedge funds that stopped reporting after experiencing an extreme drawdown are in a “blow up” situation. Chart 2 shows that almost a third of the funds have experienced a drawdown of 15% or higher. This brings our estimate of defaulted funds to 2.5% or (100 out of 4,000).

Given the current market environment the estimate seems low. One factor that may account for relatively low blow up rate is the hedge fund liquidity. As an asset class, hedge funds enjoy the benefit of providing relatively stable asset base that is protected by long lock ups, strict redemption schedule, and withdrawal fees. Given these restrictions hedge funds that experience large losses are able to survive longer. It’s generally expected that the industry will experience significant redemptions at the end of the year, which may bring to the run on many hedge funds and lead to higher blow up rate. In the future issues of this newsletter we will attempt to examine the factors that may be helpful in identifying potential blow ups.

Guest post by Aleksey Matiychenko of Risk-AL, LLC

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Investment Marketing Hurdles for Hedge Funds

I just read an interesting article on AllAboutAlpha discussing the challenges today in marketing hedge funds to new potential investors. Within the piece AAA discusses how the US has one of the most restrictive regulatory regimes in the world when it comes to the hedge fund industry. The countries of Australia, Canada, Japan and China are all less restrictive.

Here’s a short excerpt from the article:

An article in this month’s Journal of Financial Transformation illustrates why this is. The piece, titled “Hedge fund marketing in an era of regulatory uncertainty” covers many of the issues faced by those trying to raise money in the US. It’s a great update on the ebb and flow of SEC edicts over the past year and was co-authored by hedge fund personality James Hedges. Here’s some of what Hedges suggests:

• Avoid speaking to the media about your funds – even if you’re not actively selling, but just “conditioning the market”.
• Avoid “print, radio and television advertisements or solicitations regarding funding or investment matters”.
• When giving presentations, “address the risks associated with hedge funds in general as well as the specific risks associated with the hedge fund being offered.”
• When your fund has a great year, make sure you “disclose the reasons for extraordinary performance…”
• No “mass mailings” except to “individual investors, or a discrete group of accredited investors”.

Click here to read the full article.

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Tags: Marketing for Investments, Investment Marketing, Hedge Fund Marketing tips, Investment Marketing tips, Investment Marketing Regulations, Investment Marketing Group

Hedge Fund Link Fest

In case you have been reading up on bank failures and bail outs all week and missed much of the news on the hedge fund industry here is a link fest out to many of the events which recently occurred in the industry:

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Short Selling Ban – How it has impacted Funds

The Boston Globe recently released an article on the short selling ban – it covers how different funds are being affected by the recent ban on the short selling of some securities.

While these are times when events seem to happen daily which should only happen bi-centennially I’m still surprised by how “business as usual” many professionals I work with and speak to in the industry seem to be. Even though many funds do have negative performance, often the worst since inception – I believe that many groups are confident that the losses may soon be regained. Many hedge fund marketers, consultants and niche service providers seem to be weathering the storm without too much pain yet.

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How to Study for the CFA Exam

I recently interviewed a Chartered Financial Analyst (CFA) Charter Holder to gain some insight into how to best study or prepare for a CFA exam. Here is what he told me:
______________________________________

1. Start early – CFA program tests are designed to test your breadth of your knowledge as opposed to the depth. Study guide provided by Chartered Financial Analyst Institute (the textbook you receive when you register) is over 2000 pages long. So, give your self good 6 months of preparation if you are currently working or going to school.

2. Get support- Create study group. Get support and motivation. Three years of dedication takes lots of patients and motivation, so get together with your fellow test takers and pull each other through this tough journey.

3. Study each book thoroughly- Every single page of it counts. No, every single paragraph counts. It seems CFA loves to test you on topics that majority of people think it is less than important. As you progress towards level II and III this principal becomes more significant.

4. Do lots of practice questions- Purchase question banks. Search online for past exams.
Just as SAT and GMAT, being smart and knowing material doesn’t necessarily lead to higher score. Practice tons of questions and be a good test taker.

5. Find balance between your life and CFA preparation- Everyone knows preparation for CFA designation is extremely time consuming. I’ve heard people complaining that they can’t find anytime for their family or leisure. Although, it is important challenge, it is never worth it if this challenge compromises quality of your life.

What CFA study materials do you use and why?

There has been many discussions about which materials are best to use. General opinion is that since most of publications are sufficient enough to get you through the program. However, third party publication such as Schweser and Stella are more consice and easier to digest compared to official CFAI textbook which is provided to you with your registration for free. Rule of thumb is to study with whatever you feel comfortable with, but make sure you do questions on CFAI textbooks and mock exams that is available on CFA website few weeks prior to test date, because it is better reflection of what real test will look like.

__________________________________________

Disclosure: I am part of the group who runs the Certified Hedge Fund Professional (CHP) Designation Program.

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CFA Study Guide – Exclusive Notes

I have been receiving dozens of emails regarding the Chartered Financial Analyst (CFA), Certified Hedge Fund Professional (CHP), and Chartered Alternative Investment Analyst (CAIA) designations so I’ve had a guest blogger put together this one page CFA study guide for those looking for straight and simple answers on this topic. Hope this helps:
____________________________________

The CFA institute does not specifically provide a CFA Study Guide; the study information for each exam of the CFA, including study sessions, assigned readings, and practice problems, are included in the program curriculum. The CFA also provides additional study materials for the candidate.

The study material for each level of the CFA exam comes from the Candidate Book of Knowledge (CBOK). The CBOK’s content comes from real world practice; thousands of current CFA professionals weigh in on the skills needed to succeed within the investment world. The surveys the CFA collects from these charter holders provide the framework for the study material and for the exams.

The curriculum for the study material for each level of the CFA exam is divided in multiple sections. Each section will contain assigned readings drawn from textbooks, journals, cases, and analyst reports. Learning Outcome Statements (LOS) are also another section of the study material for each level of the exam. A LOS is a description of knowledge, skills, and abilities (KSA) that each candidate should master before taking the CFA examination.

The main purpose of not having a CFA Study Guide is to teach each CFA candidate that the value of the test lies in its application to real world scenarios. The CBOK is drawn from surveys of charter holders to determine the knowledge, skill sets, and abilities, which are most relevant to the profession. These surveys also help determine what the appropriate weighting for each topic on the examination should be. A committee of practicing charter holders along with the CFA institute designs the curriculum for each level of the exam. The exams themselves are also written by charter holders, which further emphasizes the amount of study time that should be devoted to the practical application of the knowledge learned from the assigned readings and LOS’s.

The CFA does provide candidates with various tools to help their course of study for the examinations. These tools include sample questions, CBOK topic outlines, exam topic area weights, and the curriculum itself. Within the Curriculum, there are the learning outcome statements as well as sample and mock exams. For a more traditional CFA study guide, a candidate can use an outside study source such as Kaplan or Schweser, which will provide a more traditional approach to preparing for the examinations.

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Prime Brokerage Boston – Meeting Notes

Yesterday I had a lunch meeting with two prime brokerage professionals in downtown Boston and the conversation quickly turned to the high demand for cap intro services for hedge funds.

The main problem with capital introductions being made by prime brokerage firms is that many hedge funds are not competitive enough to market. Many managers with negative or sub-par performance would still like to grow their business but the fact is most investors won’t consider hedge fund managers who are both relatively small and have mediocre or poor performance, there is nothing engaging enough that will convince investors to look past those two facts, they hear hundreds of stories and see as many teams pitching their outlook on the markets each year.

This leaves prime brokerage firms with two choices – offer capital introduction services knowing that there is almost no chance of raising assets or tell the hedge fund manager that they will not be able to market their strategy. The best prime brokers will often help with pre-marketing activities such as operational and risk assessments, marketing material scrubbing, newsletter development, etc.

This may seem straightforward but it is often an unsaid thorn in the side of prime brokerage firms offering capital introductions for hedge fund managers. They want to provide this service to everyone possible but by nature only 10-25% of all clients really qualify for the service.

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