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Hedge-fund investor who has beaten Warren Buffett by 200x likely made a killing on Tesla

Renaissance Technologies (RenTech), added more than 3 million shares of Tesla to its holdings in the fourth quarter of last year, as the electric-vehicle maker’s shares catapulted higher, according to public filings.


The hedge fund founded by James Simons, considered the premiere quantitative-driven investor, owned 3.9 million shares of Tesla at the end of Dec. 31, with the company’s stake in Renaissance’s portfolio jumping from 0.1% in the prior quarterly period to 1.3%, according to file-tracking site Whalewisdom.

James Simons, founder of Renaissance Technologies. Photo from Getty Images

The purchases would have come as Tesla’s shares TSLA, +7.03% were zooming higher, punishing a number of investors with short positions who had bet that the Elon Musk-run Silicon Valley darling would see its price collapse soon. Instead, Tesla’s shares have surged 142% in the past three months and has more than doubled since the beginning of 2020, according to FactSet data.


By comparison, the Dow Jones Industrial Average DJIA, +0.23% has gained 4.2% over a three-month period, and 2.4% so far this year, while the S&P 500 index SPX, +0.40% has climbed 7.9% in the past three months and 4.2% in the year to date. The technology-laden Nasdaq Composite COMP, +0.69% has advanced nearly 14% in the past three months and boasts a 8.3% gain in 2020 so far.


By some reckonings, Simons is one of the most famous quantitative traders ever. He retired from the firm’s day-to-day operations of Renaissance a decade ago, but is still involved with the firm. For his efforts, he ranks No. 21 on the Forbes list of the wealthy, with a net worth of $21.6 billion. If you want to take a deep dive into Jim Simons and RenTech, I highly recommend the book below: The Man Who Solved the Markets: How Jim Simons Launched the Quant Revolution.




Renaissance’s main investment offering is the flagship Medallion Fund, which has generated a 39% average annual return from 1988 to 2018, that is despite rich fees, which currently include a 5% management and 44% performance fees.


Those costs haven’t prevented Medallion from outperforming Warren Buffett’s Berkshire Hathaway BRK.A, +0.36% BRK.B, +0.27% over the same 30-year period writes Nick Maggiulli of Ritholtz Wealth Management.


The Medallion Fund limits its assets to roughly $10 billion and is only available to Renaissance employees.


For its part, Tesla completed a $2 billion secondary offering on Friday and analysts have continued to hold a bullish view on the company. Bernstein analyst Toni Sacconaghi nearly doubled his price target, describing the vehicle maker as the “ultimate ‘possibility’ stock.” Sacconaghi raised his price target to $730, which was still below current levels at $845, from $325. “Revenue in 2020 is expected to rise by 30.3% to approximately $32 billion, and earnings are forecast to rise to $8.68 per share from $0.20 per share in 2019,” Whalewisdom researchers wrote.


Beyond Renaissance Tech, JPMorgan Chase & Co. JPM, +1.10% was seen purchasing roughly 2.2 million shares of Tesla in the most recent period, bringing its position to 2.5 million, according to Whalewisdom data.


Article originally posted on Marketwatch.

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© 2019 Anthony Davian (aka @hedgieguy) Cleveland, Ohio 

hedge fund manager Cleveland and hedge fund manager Akron