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Seth Klarman Bets on Alphabet and Facebook, Should You?


Sep. 4 2020, Updated 6:52 a.m. ET

Seth Klarman is often called “the next Warren Buffett” due to his style of investing. His fund, Baupost Group disclosed its positions during the first quarter of 2020 in a 13F filed with SEC (Securities and Exchange Commission). The hedge fund’s total portfolio value at the end of March 31 was $6.7 billion—a decline of 26% from the previous quarter.

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Seth Klarman bets on Alphabet and Facebook

During the first quarter, Seth Klarman placed new bets on Alphabet (NASDAQ:GOOG) and Facebook (NASDAQ:FB). While Alphabet formed 5.2% of his total portfolio, Facebook contributed to 4.9%. Both of these stocks have remained almost flat year-to-date. However, the stocks outperformed given the negative returns by the S&P 500 (NYSEARCA:SPY) and the NASDAQ Composite Index (NYSEARCA:QQQ).

Hedge funds’ interest in technology giants

As reported by the Wall Street Journal, a Saudi sovereign wealth fund bought a stake in Facebook worth about half a billion dollars. Other technology giants also attracted interest from big buyers. Due to COVID-19, their earnings were expected to remain comparatively steady. On the other hand, David Tepper thinks that some big tech stocks like Amazon (NASDAQ:AMZN), Facebook, and Alphabet might be “fully valued.”

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Klarman’s largest stakes

Seth Klarman also added to his positions in eBay, which is now the fund’s biggest position. eBay contributes to 14.3% of the fund’s portfolio value. Liberty Global and Fox trail with 12.5% and 11.5% stakes, respectively. Klarman doubled his stake in HP. Meanwhile, he ramped up positions in Qorvo, ViacomCBS, Cars.com, and a few others.

Baupost fund exited some stocks

On the other hand, Seth Klarman exited his stake in Bristol Myers Squibb and Eldorado Resorts. While Bristol Myers Squibb’s stock price has risen by 1% this year, Eldorado Resorts stock has fallen by 61%.

Notably, in January 2020, Klarman made his bearishness clear for the market. As reported by CNBC, he told investors that “the rocket fuel that has propelled markets in 2019 will run out.” He had 31% of his fund’s portfolio in cash at the end of 2019.


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