David Tepper Has a Large Cash Position, Update on Appaloosa's Q2 Holdings

David Tepper (Appaloosa Mgmt)
Yesterday, an article in Institutonal Investor mentioned that David Tepper, founder of $15 billion hedge fund Appaloosa Management, was 30-40% in cash.

"Sources say he has gone 30 percent to 40 percent in cash, which is very high for him. Some of his cash is invested in U.S. Treasuries, which have in turn risen in value in recent weeks."

"Word is he will remain cautious until there is improvement in the European bank crisis." (continue reading)

This doesn't surprise me. On 6/13/2011 he told CNBC:

"Basically Bernanke said no QE3. If SPX is down a couple hundred points and financial conditions tightened maybe they would reconsider. There is no logic to QE3 now and the only result might be more food and energy inflation. We're in a difficult investing environment."

QE2, which fueled the "Tepper rally", ended on 6/30/2011. When Appaloosa's second quarter holdings were filed last month, it showed sharp reductions in some of its largest positions. Check out the bubble chart below, courtesy of GuruFocus, showing Appaloosa's top buys, top sells and top holdings during the second quarter. Tepper liquidated 54% of his Hewlett Packard holding, 41.9% of Bank of America, 31% of Dean Foods, 17.5% of Applied Materials, 17.5% of Microsoft, 11.18% of International Paper, 8.19% of Goodyear Tire Rubber Co, 6.7% of CF Industries, 6% of Citigroup, 5.97% of Wells Fargo, and still held some Royal Bank of Scotland. Tepper also bought some energy and chemical names (Valero, CVR Energy, Mosaic, Western Refining) and Google.

Remember, this is very old data with Q3 ending on September 30, but with equities crashing in August, and banks in the U.S. and Europe in the emergency room again, did he make more adjustments in July or early August? David Faber thinks so: Tepper's Appaloosa Exits Financials, 8/8/2011. We'll see. At the end of Q2, Citigroup was Appaloosa's largest holding at 7.07%, and then Pfizer at 7.04%.




Chart source: http://www.gurufocus.com/news/141474/hedge-fund-appaloosa-q2-update-buys-mos-wnr-goog-hoc-cvi-vlo-tso-sells-hpq-bac

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