uploads/2020/03/David-Tepper-Bill-Ackman.jpeg

What Are Ackman and Tepper Doing As US Stocks Fall?

By

Updated

  • US stock markets have tumbled over the last month. The crash is the worst since the 2008 financial crisis. On some metrics, the Dow Jones crash bears a resemblance to the Great Depression.
  • Meanwhile, fund managers have offered differing views amid the crash in US stock markets. In this article, we’ll see what Appaloosa Management’s David Tepper and Pershing Square’s Bill Ackman are up to.
Article continues below advertisement

What are Ackman and Tepper doing?

US stock markets are in the grip of a bear market. The sell-off deepened last week and has continued into this week as well. The crash in the Dow Jones shattered some scary records. Several fund managers, including Warren Buffett, have expressed their opinion on the coronavirus-led stock market crash. We’ll discuss what David Tepper and Bill Ackman have to say about investing during this turbulent time.

Bill Ackman is buying big

Bill Ackman, the founder of Pershing Square Capital Management, is “very bullish.” He’s focusing on “companies with strong balance sheets.” The fund has brought more than $2.0 billion in stocks over the last ten days. To put that number in perspective, Pershing Square has about $8 billion in assets. Ackman added Starbucks and Berkshire Hathaway (NYSE:BRK.B) shares this month. He added Berkshire shares last year as well and sounded bullish on the stock. Berkshire is sitting on a record cash pile. Chairman Warren Buffett used some of the cash to buy back shares in the fourth quarter.

Article continues below advertisement

Pershing Square’s Q4 13F

Looking at the 13F, Chipotle Mexican Grill, Hilton, Lowe’s, Restaurant Brands International, and Berkshire Hathaway were Pershing Square’s top five holdings at the end of the fourth quarter. The 13F also revealed that Howards Hughes and Agilent Technologies were Pershing’s top two buys in the fourth quarter, while Starbucks was the top sell during the quarter.

What’s David Tepper doing?

Appaloosa Management’s cofounder David Tepper has been somewhat circumspect compared to Ackman. In an interview with CNBC, Tepper said, “you have to be very selective.” While he cautioned that stock markets could fall another 10%-15%, he’s “nibbling right now.” He also said that he would “nibble more” if stock prices fall further. He said that “it may be time to buy a little” for long-term investors. He emphasized on “little” and warned against leveraging. Tepper said that he’s looking at tech and healthcare stocks.

Article continues below advertisement

Appaloosa’s Q4 13F

Looking at Appaloosa’s fourth-quarter 13F, the fund is overweight on tech stocks. Alphabet, Facebook, Amazon, Alibaba, and Micron were its top five holdings at the end of the fourth quarter. Appaloosa’s fourth-quarter 13F showed that Tepper brought shares in Alibaba, Micron, Energy Transfer, and United Health Group. Appaloosa cut its stake in Alphabet, the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEARCA:XOP), and PG&E in the fourth quarter.

Like Ackman and Tepper, Buffett is also buying stocks. So far, the filings have revealed that Berkshire has increased its stake in Delta Airlines. However, given the crash in US stock markets, Buffett might get opportunities to deploy some of Berkshire’s soaring cash pile. Read What’s Warren Buffett’s Plan as US Stock Markets Crash? to learn more.

Advertisement

More From Market Realist