There were rumours a couple of weeks ago that John Thaler’s JAT Capital might be liquidating some positions because of big losses he took as some big momentum stocks plunged unexpectedly.The $3 billion fund recently took a big position in Netflix, for example, which has seen better days.
But JAT’s performance numbers this year, which remain high, +31% YTD (-3.2% in September), dispel those rumours. Any losses he might have taken on Baidu, Wynn, and Sina, to name a few of his holdings that got hit, were offset by shorts Thaler took on Chinese Internet stocks.
JAT is now doing so well that it looks like everyone is passing around the fund’s marketing document, because it was obtained by Bloomberg.
JAT trades telecom, media and technology companies, and is now also embracing trading consumer, industrial and gaming companies, which have driven the majority of profits this year, according to Bloomberg.
Other details revealed by the marketing document include:
The fund has typically swung between about 10 per cent net long or short in the past 18 months, the people said. It currently has gross exposure of about 200 per cent, using leverage to magnify its long and short wagers, and a market- neutral position with zero net exposure… Thaler generally aims to hold long positions for two years and short positions for three to 12 months…
About half of the fund’s investments are currently in companies with less than $10 billion in market value, they said. The majority of its stakes can be liquidated within five business days.
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