Tracking Charlie Munger's Daily Journal Portfolio – Q4 2017 Update

• Charlie Munger’s Daily Journal Portfolio continues to have just four positions.
•  The portfolio has been largely untouched since their first 13F filing for Q4 2013.
• The overall portfolio value increased ~12% in the quarter.

Charlie Munger’s Daily Journal portfolio value increased ~12% this quarter from $154M to $173M. Since their first 13F filing in Q4 2013, there has only been one change to the holdings: POSCO was reduced significantly in Q4 2014. After accounting for this sale, the portfolio value has remained remarkably steady over the last four years. To know more about Charlie Munger, check out the book Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger.

Below is a look at the holdings:

Wells Fargo (WFC): WFC stake forms ~56% of the entire portfolio. The stock was at $45.40 EOY 2013 during their first 13F filing and is now at $65.78.

Bank of America (BAC): BAC is another large stake at ~39% of the portfolio. The stock was at $15.57 during their first 13F filing for EOY 2013 and is now at $32.

US Bancorp (USB): USB is a 4.86% of the portfolio position. The stock is at $57.14, around 43% higher compared to the EOY 2013 pricing of ~$40

POSCO (PKX): The minutely small 0.44% portfolio stake was sold down by ~85% in Q4 2014 at prices between $64 and $73. The stock is now at $89.48.

The spreadsheet below show Charlie Munger's Daily Journal US stock holdings as of Q4 2017. Please visit our previous updates to get an idea on how the portfolio has progressed:

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 .

Tracking Baker Brothers Portfolio – Q3 2017 Update

• Baker Brothers’ 13F portfolio increased from $11.44B to $12.33B. The number of positions increased from 120 to 121.
• BeiGene Ltd. Stake was increased while reducing Achaogen. 
• The top-three positions are Incyte Corporation, Seattle Genetics, and Alexion Pharmaceuticals and they add up to almost ~62% of the portfolio.

This article is first in a series that provides an ongoing analysis of the changes made to Baker Brothers’ 13F portfolio on a quarterly basis. It is based on Baker Brothers’ regulatory 13F Form filed on 11/14/2017.

Baker Brothers was founded by Julian & Felix Baker in 2000. Despite a less than ~50% win-record, the firm has managed to post outstanding returns thru prudent position sizing. Over the years, the firm had a number of home runs as the invested firms got acquired at huge premiums. Recent M&A winners include Pharmacyclics (acquired by AbbVie), Synageva (acquired by Alexion), and Salix (acquired by Valeant).

Assets Under Management (AUM) is at around $12.5B. They invest in over a 100 companies although only around 20 are sized above 0.5% of the portfolio. As a percentage of AUM, allocation to the highest conviction picks can be very high at over 30%. 

This quarter, Baker Brothers’ 13F portfolio increased ~8% from $11.44B to $12.33B. The number of holdings increased from 120 to 121. The top three holdings are at ~62% while the top five holdings are close to ~75% of the 13F assets: Incyte Corporation (INCY), Seattle Genetics (SGEN), Alexion Pharmaceuticals (ALXN), Acadia Pharmaceuticals (ACAD), and BioMarin Pharmaceuticals (BMRN).

Notes: a) Regulatory Filings on 1/22/2018 indicate Baker Brothers owning 22.4% of BeiGene Ltd (BGNE). Around 2M ADS shares were purchased following a secondary offering at $101 per share bringing the total ADS shares held to ~5.81M. The ownership stake also includes ~75.8M ordinary shares also held (equivalent to 5.83M ADS shares, 1 ADS share = 13 ordinary shares). Including those, the position sizing is close to 10% of the portfolio, and b) Regulatory Filings after the quarter ended show them owning 4.9M shares (27.3% of business) of Erytech Pharma S/A (ERYP). The position was acquired at a cost-basis of ~$24.50: around 3M shares in the public offering at $23.26 and the rest for $47.5M before. For investors attempting to follow Baker Brothers, these two stocks are good to consider for further research.

The spreadsheet below highlights changes to Baker Brothers’ 13F holdings in Q3 2017:

To learn more about how to profit from a strategy of following the best hedge fund picks, check out our book Profiting from Hedge Funds: Winning Strategies for the Little Guy . 

Tracking Chase Coleman’s Tiger Global Portfolio – Q3 2017 Update

• Chase Coleman’s 13F portfolio value increased from $11.56B to $14.74B this quarter.
• Tiger Global substantially increased Netflix, TAL Education, and Facebook during the quarter.
• The largest three positions are Priceline Group, JD.com, and Amazon.com Inc. and they add up to ~36% of the portfolio.

Chase Coleman’s 13F portfolio value increased ~27% this quarter from $11.56B to $14.74B this quarter. Recent 13F reports have shown a total of around 20 individual stock positions in the portfolio. The largest five stakes are Priceline Group (PCLN), JD.com (JD), Amazon.com Inc. (AMZN), Apollo Global (APOL), and Despegar (DESP) and they add up to ~50% of the entire 13F portfolio.

Chase Coleman is a "tiger cub" best known for a stunning 44% annualized return during the 2001-2008 period. To know more about Julian Robertson and his legendary Tiger Management, check out Julian Robertson: A Tiger in the Land of Bulls and Bears.

Below is a summary:

Fiat Chrysler (FCAU): FCAU is a ~3% of the portfolio position purchased in Q4 2016 at prices between $6 and $9. There was a one-third reduction in Q1 2017 at prices between $9.50 and $11.50 and that was followed with a ~40% selling last quarter at prices between $9.70 and $11.65. The stock is now at $24.81. This quarter also saw a ~18% stake increase.

Alibaba Group Holdings (BABA): BABA is a fairly large 5.32% portfolio stake established in Q3 2016 at prices between $78.50 and $109 and the stock is now at $205. There was a ~4% stake increase this quarter.

Amazon.com Inc. (AMZN): AMZN is currently the third-largest 13F stake at ~10% of the portfolio. The position was established in Q2 & Q3 2015 at prices between $370 and $540. Q1 2016 had seen a two-thirds reduction at prices between $482 and $676. The following quarter saw a ~40% increase at prices between $586 and $728 and the stock is now at $1402. This quarter saw another ~24% increase at prices between $945 and $1053.

Note: AMZN has seen a previous round-trip in the portfolio. A 1M share stake purchased in 2010 in the low-100s price range was disposed of in Q1 2014 in the high-300s realizing huge gains.

Charter Communications (CHTR): CHTR is now a ~2.44% portfolio position. It was first purchased in Q3 2012 at a cost-basis of ~$75 per share. The position has wavered. Recent activity follows: The first three quarters of 2015 saw the position reduced by ~84% at prices between $150 and $195. The pattern reversed in Q4 2015: roughly thirteen-times increase at prices between $175 and $193 in the three quarters thru Q2 2016. There was a ~20% reduction the following quarter at prices between $232 and $278 and that was followed with another ~30% selling in Q4 2016 at prices between $244 and $292. Q1 2017 saw a further one-third selling at prices between $286 and $333 and that was followed with a similar reduction last quarter at prices between $313 and $353. The stock is now at $377. Tiger Global is realizing huge long-term gains.

FleetCor Technologies (FLT): FLT is a ~3% of the portfolio stake first purchased in Q4 2012 at prices between $45 and $53. Q3 2015 also saw a ~47% increase at prices between $148 and $163. The three quarters thru Q3 2016 had seen selling: ~48% combined reduction at prices between $113 and $175. There was an about-turn in Q4 2016: ~22% increase at prices between $141 and $175. The pattern reversed again in Q1 2017: ~50% reduction at prices between $140 and $170. There was an almost two-thirds increase last quarter at prices between $131 and $151 and that was followed with a ~23% increase this quarter at prices between $139 and $155. The stock is now at $212.

Priceline Group (PCLN): PCLN is currently the largest position at ~14% of the portfolio. The position was purchased in Q4 2015 at prices between $1237 and $1465. Q3 2016 saw a one-third increase at prices between $1248 and $1473 and that was followed with another similar increase the following quarter at prices between $1424 and $1578. The stock is now at $1950. There was a ~15% trimming in Q1 2017 and that was followed with marginal reduction last quarter.

Note: PCLN has seen a previous roundtrip in the portfolio. A fairly large position first purchased in 2007 in the high double-digits was disposed of in Q3 2015 in the 1200s price range realizing huge gains.

Note 1: Tiger Global has significant ownership stakes in the following businesses: 7.7% of Transdigm Group (TDG), 17% of Apollo Global (APOL), 7.2% of Teladoc (TDOC), ~7.5% of Etsy (ETSY), ~10% of Redfin Corp. (RDFN), ~10% of Roku (ROKU), and ~22% of eHi Car Services (EHIC).

Below is a spreadsheet that shows the changes to Chase Coleman's Tiger Global Holdings US long portfolio holdings as of Q3 2017. For a look at how the portfolio has progressed, see our previous update:

To learn more about how to profit from a strategy of following the best hedge fund picks, check out our book Profiting from Hedge Funds: Winning Strategies for the Little Guy .