Trending
Written by: Leo Kolivakis Arie Shapiro reports, Which Hedge Funds Got ‘Whale Rocked’ in October? : "Today is the deadline for 13Fs, where funds of all kinds will disclose what stocks they bought and which ones they sold in the third quarter. But this filing period is a bit different than others because the quarter ended just days before a rout in the market began: The Nasdaq plunged 9.2% in October, its largest monthly decline since November 2008, while the S&P 500 fell almost 7%. And volatility hasn’t subsided since -- Just look at what happened in the e-minis overnight (rallying 16 points last night only to reverse by ~33 handles, and now practically flat) or what’s been going in crude oil over the past month and a half, with WTI seeing virtually zero upticks in a straight slide from $77 to $55 per barrel ." 
So what we may get is a proper look at who piled into some of the biggest pressure points of the market during the meltdown, for example the breakdown in the tech sector. What we won’t get is a more up-to-date view on who panic sold and/or who doubled and tripled down as the selloff deepened. That’ll have to wait until the next 13F season -- unless the investor letters leak before then, of course. We’ve received some insight into the October carnage from several TMT-heavy hedge funds, like Whale Rock, the $3 billion firm run by former Fidelity portfolio manager Alex Sacerdote, which saw its flagship fund plummet 11% during the month; meanwhile, the master fund at Light Street Capital, Glen Kacher’s $1.4 billion firm, fell more than 9% .See the graphic below for a look at Whale Rock’s top holdings by market value as of June 30, which can be viewed via the FLNG function; the positions will be updated later today when the new 13F gets filed.As you can see, three of the FAANGs topped the list (Amazon was 8.6% of the fund’s portfolio followed by Netflix 7.5% and Facebook 6.5%) while the rest of the top ten was littered with tech momentum names like Shopify, MongoDB, Nvidia, and Square, all of which are down many percentage points since the end of the third quarter. 
I’ll be screening for which other funds potentially got "Whale Rocked," which is a completely made-up term by me in a bid to understand who else may have gotten wrecked when tech turned south. Of course, this non-trademarked term only works well in the context of one month’s performance, as Whale Rock was still up for the year through October (up 4.7% vs S&P 500 up 1.4%), according to an investor document viewed by Bloomberg. The keys will be to check who took a fat new stake or boosted their positions in some of the momentum names in the tech sector, many of which tend to be hedge fund hotels. On the flip side, I’ll also be curious to see who exited their positions in the worst-performing sectors (tech & communication services, consumer discretionary, energy and industrials) and rotated into more defensive ones like the utilities, consumer staples, or REITs, all of which outperformed since the end of the third quarter, as the graphic below shows . 
13F Cheat Sheet Here’s a list of names to watch with their respective share move quarter-to-date:
As far as Coatue Management and Tiger Global, they added to Apple ( AAPL[NGS] - $185.86 ) and the stock did fine in Q3 before getting clobbered during the nasty October selloff, the worst October since 2008On Apple, I said as long as it holds above its 50-week moving average, I'd be long despite the October selloff and negative weekly MACD (click on image): 
I don't care if it's Warren Buffett's top position, I don't care if the company will stop reporting unit sales (everyone knows they've been falling and will continue to fall), all I care about is that weekly chart above and it helps knowing they have more cash than they know what to do with, so expect buybacks to continue lending support to shares (not that I really put too much credence to the buyback bull).Still, I expect a slowing global economy next year with high possibility of a recession, so it's hard for me to be all excited about Apple from a fundamental point but if you notice, the company is moving aggressively into entertainment and other financial ventures which is positive.All this to say, if I had a choice between owning Apple or Facebook here, I'd follow the Oracle of Omaha into Apple, no doubt about it (I never liked Facebook, I personally think it's a waste of time and it's definitely not a well-run company).But the point of these quarterly comments on top funds' activity is to show my readers there's so much more to this market than FANG stocks or high-flying tech stocks like NVDIA ( NVDA[NGS] - $144.70 ) which got killed on Friday (click on image): 
On StockTwits, told my followers, don't bother trying to play this chip stock on the long side, it broke below its 100-week moving average and the weekly MACD is negative, telling me even if there's a bounce, it's headed much lower.In general, I don't like semiconductor shares( SMH[ARCA] - $90.74 ) here given my macro views that the US and global economy are slowing (click on image): 
But it's a bit of crazy market and while some risk assets are getting clobbered, others might come back.Earlier this week, I told my followers on StockTwits to pay attention to biotech shares( XBI[ARCA] - $76.91) which got clobbered as rates rose and were at an important support level (click on image): 
It’s still very weak and I'd be very careful here but you see how it bounced off its 200-week moving average? In the past, biotech shares came roaring back after such a selloff but the rise in rates is removing a lot of liquidity in markets.Still, on Friday, biotech shares (XBI) rallied 2.5% that's all it took to ignite many of the smaller biotech shares I track. 
You'll notice shares of Tesaro ( TSRO[NGS] - $36.83 ) rallied 32% on rumors of a buyout but the stock has punished investors over the last two years (click on image): 
I noticed Joseph Edelman's Perceptive Advisors, one of the best biotech funds, took a small position in this one as it got killed in Q3 but I don't know what to make of today's big pop.Perceptive Advisors also added big to shares of Arena Pharmaceuticals ( ARNA[NGS] - $40.86 ) in Q3 and the company's stock had a spectacular week.Perceptive also made big money buying the dip in Solid Biosciences ( SLDB[NGS] - $33.38 ) this year and added to its position in La Jolla Pharmaceuticals ( LJPC[NSC] - $15.06 ) as shares declined in Q3. You can view Perceptive's top holdings here but be warned, biotech isn't for the faint of heart.Anyway, I can literally ramble on for days about what top funds bought and sold but I will spare you the details. Zero Hedge did a good job going over 13-F summary here.As always, take this stuff with a grain of salt and remember, even the "gurus" get it wrong, just ask Seth Klarman and others who got scorched this week on their PG&E ( PCG[NYE] - $23.26 ) positions. Shares of that utility rallied 37% Friday but the damage is done (click on image): 
I'll end it there. Have fun looking at the third quarter activity of top funds listed below. The links take you straight to their top holdings and then click on the fourth column head, % chg, to see where they decreased (click once on % chg column head) and increased their holdings (click twice on % chg column head).