- Chou’s 13F portfolio value decreased from $286M to $234M during the quarter.
- Chou decreased JP Morgan Chase, Valeant, Endo International, Teva Pharmaceuticals, and Overstock during the quarter.
- Resolute Forest Products at ~22% of the portfolio is the largest position.
Francis
Chou’s Chou Associates portfolio value decreased ~18% from $286M to $234M during
the quarter. The portfolio continues to be very concentrated with just 24
positions. Below is a summary:
1. Berkshire Hathaway (BRK.A): The ~14%
portfolio position is the second-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 $307,100.
2. JPMorgan Chase Warrants (JPM-WT): The
~5% stake in JPMorgan TARP Warrants was acquired in 2011 at much lower prices.
The position had remained relatively steady since. Q1 2017 saw a ~44% selling
as the underlying traded between $83 and $94 and that was followed with a
similar reduction last quarter as the stock traded between $82.50 and $95. This
quarter saw another ~50% selling as the stock traded between $95 and $108. JPM
currently goes for $115.
3. Resolute Forest Products (RFP): The
~22% 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 $8.65. There was a ~7% trimming this
quarter.
4. Valeant Pharmaceuticals (VRX): VRX was
the largest position at ~15% of the portfolio as of last quarter. The stake was
almost eliminated this quarter at prices between $11 and $22. The original
position was from 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 in Q4 2016 at prices between $13.50 and $24.50 and that was followed
with a ~20% increase the following quarter at prices between $10.50 and $17. Q2
2017 saw another ~30% increase at prices between $8.50 and $17.30. The stock
currently trades at $15.98.
Below
is a spreadsheet that highlights the changes to the portfolio as of Q4 2017.
Please check out our previous update to have an idea on how the
portfolio is progressing:
To learn more about how to profit from a strategy of cloning
hedge fund picks, check out our book Profiting from Hedge Funds: Winning
Strategies for the Little Guy .
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