Tracking Francis Chou’s Chou Associates Portfolio - Q1 2017 Update

• Chou’s 13F portfolio decreased from $313M to $301M during the quarter.
• Chou increased Valeant while reducing JPMorgan Chase WTS.
• Berkshire Hathaway at ~12% of the portfolio is the largest position.

Francis Chou’s Chou Associates Portfolio decreased ~4% from $313M to $301M during the quarter. The portfolio continues to be very concentrated with just 27 positions. Below is a look at his largest stakes:

1. Berkshire Hathaway (BRK.A): The ~12% portfolio position is the largest 13F equity stake. The last major activity was a 50% reduction in Q1 2016 at prices between $187,000 and $214,000. The stock is now at $251,800.  

2. JPMorgan Chase Warrants (JPM-WT): The 9.62% stake in JPMorgan TARP Warrants was acquired in 2011 at much lower prices. The position had remained relatively steady since. This quarter saw a ~44% selling as the underlying traded between $83 and $94. Chou is harvesting large long-term gains.

3. Resolute Forest Products (RFP): The ~9% RFP position has been in the portfolio since 2010 (Abitibibowater at the time) and the cost-basis is much higher compared to the current price. Q2 2013 saw a one-third increase at prices between $13 and $16. The five quarters through Q1 2016 also saw a ~20% combined increase at progressively lower prices between $4 and $19. The stock is now at $4.35.

4. Valeant Pharmaceuticals (VRX): VRX is a 8.61% portfolio position established in Q1 2016 at prices between $26 and $102 and increased by ~48% the following quarter at prices between $19 and $36. There was another ~35% increase last quarter at prices between $13.50 and $24.50 and that was followed with a ~20% increase this quarter at prices between $10.50 and $17. The stock currently trades at $15.80.

Below is a spreadsheet that highlights the changes to the portfolio as of Q1 2017. Please check out our previous update to have an idea on how the portfolio is progressing:

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