It has been a tough month for the darlings of the hedge fund investment world.
In December, Business Insider published a list of the stocks hedge funds love the most. And it has been a brutal few weeks for the top 10, with several down more than 10% in the past month. In comparison, the S&P 500 is down about 4%, and the Dow Jones industrial average is down about 5%.
It’s not all bad for hedge funds’ bets, of course, with many of the market’s favourite short trades benefitting from the recent volatility. Nvidia, a popular short target, is down 12% in the past month, for example. And Tesla’s tumbling stock has made short sellers $US1.9 billion in less than a month, as reported by my colleague Joe Ciolli.
And more generally, higher levels of dispersion – a measure that reflects how widely market returns are distributed – creates opportunities for investors. According to Bank of America Merrill Lynch, dispersion is at its highest since 2009, when the market was just starting to recover from the financial crisis.
- Facebook: -16.2%
- Amazon: -6.6%
- Alibaba: -3.95%
- Alphabet: -10.5%
- Microsoft: -6%
- Time Warner: +0.47%
- Apple: -7.46%
- Bank of America: -9.5%
- NXP Semiconductors: -2.93%
- Citigroup: -10.7%
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