Last comments on Mr Lokey. It would be very interesting to know how IOC came to be on his radar all of a sudden. His other posts/picks are all on pretty large profile stocks (GOOG, NFLX, GMCR, RIMM, GRPN, CSTR) and worldly issues. How did IOC pop up for him, especially since news has been very slow. So it MUST have been the Soros "news" that he picked up on, even though he's picked up on it well after it was news. So he grabs hold of the Soros thing for some reason, and assumes "Soros possibly knows something the rest of us don't." I think that's true, but it isn't necessarily about IOC specifically.
I still believe that the lightening of his IOC position was about reallocation and part of his shifting to family-only money. As part of that the hedge fund has made a big move toward simplification. On December 16th Reuters ran an article, "Layoffs hit Soros Investment Company" (
http://www.reuters.com/article/2011/12/1...MV20111216)
In this article it states, "The moves came after the New York-based fund hired a new chief investment officer, Scott Bessent, in September, and after it closed its doors to outsiders in July by reorganizing into a so-called family office to exclusively oversee the Soros family's personal fortune." and, ""It would appear that with Scott Bessent installed as the new CIO, he is taking steps to put his stamp on things. And the pendulum at Soros is now swinging back to its traditional macro focus," said Gregory Cresci, an executive recruiter who specializes in hedge funds at Odyssey Search Partners."
Question is, did that happen? You would expect this would be a more focused group of stocks/holdings which would represent their feelings on the world and where things are headed, and then adjustments of the portfolio as their feelings change. To make any significant shift in a fairly quick time you would want to hold fewer positions. Did Soros do that? Yes, in a very big way.
I looked at the filings for Soros' fund for the third and fourth quarters to see what changed. It's pretty amazing. At the end of the third qtr they had 473 positions representing $5.8 billion. At the end of the 4th qtr (most likely after distributing cash to "outsiders") the fund only held 145 positions representing $4.6 billion. This represents a 70% reduction in positions, but only a 21% reduction in dollar value (which makes sense since it was reported that outside money was around $1 billion).
As we know Soros' IOC holdings did not change from Q3 to Q4, so not only did it become a larger % of the total fund's positions (excluding the huge cash balance) in dollars (4.02% Q3 to 5.05% Q4) it also went from being its 9th largest holding in Q3 to 5th in Q4.
With Soros' view at the beginning of the year that Europe was going to fall apart and deflation would most likely set in, having that big a chunk of the portfolio in IOC didn't make sense, especially with the 4 holdings above IOC all being tech plays.
You would think that Mr Lokey (if he really hopes to get a job at GS or start his own hedge fund) might do a bit more homework before using Soros' selling of IOC shares as the primary reason to recommend and consider shorting IOC. Especially since the rest of his reasoning was simply using Google to find more negative information. I wonder how much time he invested in at least trying to get IOC's IR dept to give him info/respond. I bet none.
This guy is very so-so in his picks. He quickly pointed out his good calls (who wouldn't?), but left out these:
1. Nov 17th- Recommended shorting Allianz (AZSEY.PK) when it was around $9.75; it pretty much went up frm that point and is now at $12.28
2. Nov 17th- Recommended RIMM as a Buy at $17.17; it's now $14.52
So he's no better than anyone else, and in this case seems to have gone after a stock out of his realm for some reason. Wonder why?
