Investors Pile Back into Risk Assets

U.S. and global stock markets ended the week on a mixed note.

On the one hand, gains in the mainstream U.S. indexes remained relatively muted. The S&P 500 posted a 0.88% rise, while the Dow Jones rose 0.62%.

On the other hand, appetite for risk assets jumped. The Nasdaq closed the week up 1.43%, while the MSCI Emerging Markets Index broke out of a trading range to close the week 3.95% higher.

Your most recent pick, David Einhorn’s significant position in General Motors Company (GM), rose 4.58%. Carl Icahn’s PayPal Holdings (PYPL) rose another 4.40%. With Q4 traditionally the strongest for emerging markets, Ray Dalio’s big bet on the sector, through the Vanguard FTSE Emerging Markets ETF (VWO), rose 3.21%.

Also, Priceline Group (PCLN), The St. Joe Company (JOE), Fiat Chrysler Automobiles N.V. (FCAU) and Liberty Broadband (LBRDK) each rose by at least 2%.

Eight of your positions now boast double-digit-percentage gains. PayPal Holdings (PYPL) is currently up over 90.61% since my initial recommendation. Fiat Chrysler Automobiles  N.V. (FCAU) is up by 54.12%.

Liberty Broadband (LBRDK), Berkshire Hathaway (BRK-B), Priceline Group (PCLN), BlackBerry Ltd (BB) and Navigator Holdings (NVGS) are all trading below their 50-day moving averages and are currently HOLDs.

Portfolio Update

As you know, I keep close track of what the Smart Money Masters are doing with their current positions. Most continue to hold onto their positions, whether they have performed well or poorly.

Bruce Berkowitz has added to his position in The St. Joe Company (JOE) over recent weeks. It now accounts for 56.14% of his portfolio.

Mohnish Pabrai’s big bet on Fiat Chrysler Automobiles N.V. (FCAU) means this position now makes up 56.89% of his portfolio. With his own target price near $30, there is a lot of upside left in this bet.

George Soros’ Liberty Broadband Corporation (LBRDK) has risen only about 4% since my initial recommendation in February. That pales in comparison to some of our most significant winners. However, Soros has been gradually increasing his stake in the stock over the summer. The stock now accounts for 22.13% of his portfolio and is his biggest position by a factor of four.

Bill Ackman reduced his position in Restaurant Brands International (QSR) last quarter, taking some money off the table. The position once accounted for over 40% of his portfolio. Now it accounts for 33.1%, which still is a massive bet for this activist investor.

With that, I wish you and your family a Happy Thanksgiving.

Sincerely,

Nicholas A. Vardy