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Bearish Kyle Bass Buys Index Put; Sells out Long Positions

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gurufocus

337 followers
Hedge fund manage Kyle Bass just reported his fourth quarter portfolio. He sold out almost all of his long positions and bought large positions of index put to his portfolio. His portfolio move is very bearish. Is he seeing something that others cannot see as the market continues to make new highs?

Kyle Bass did buy into one long position, which is the beaten down mortgage insurer MGIC Corp. (MTG). He kept his small positions in Six Flags and APU technologies unchanged, and sold out all other long positions such as Golar LNG Partners Lp, McMoRan Exploration Co., Imation Corp., Earthlink Inc., Tessera Technologies Inc. As of 12/31/2011, Kayle Bass’s firm Hayman Advisors owns 6 positions with a total value of $68 million. These are the details of the buys and sells.

For the details of Kyle Bass's stock buys and sells, go to http://www.gurufocus.com/StockBuy.php?GuruName=Kyle+Bass

New Purchase: Mgic Investment Corp. (MTG)

Kyle Bass initiated holdings in Mgic Investment Corp.. His purchase prices were between $1.63 and $3.83, with an estimated average price of $2.84. The impact to his portfolio due to this purchase was 6.9%. His holdings were 10,047,937 shares as of 12/31/2011.

Sold Out: Golar Lng Partners Lp (GMLP)

Kyle Bass sold out his holdings in Golar Lng Partners Lp. His sale prices were between $23.3 and $30.66, with an estimated average price of $27.81.

Sold Out: Mcmoran Exploration Co. (MMR)

Kyle Bass sold out his holdings in Mcmoran Exploration Co.. His sale prices were between $8.98 and $16.47, with an estimated average price of $13.24.

Sold Out: Imation Corp. (IMN)

Kyle Bass sold out his holdings in Imation Corp.. His sale prices were between $5.4 and $7.93, with an estimated average price of $6.46.

Sold Out: Earthlink Inc. (ELNK)

Kyle Bass sold out his holdings in Earthlink Inc.. His sale prices were between $5.97 and $7.22, with an estimated average price of $6.52.

Sold Out: Tessera Technologies Inc. (TSRA)

Kyle Bass sold out his holdings in Tessera Technologies Inc.. His sale prices were between $11.27 and $17.42, with an estimated average price of $15.05.

Here is the complete portfolio of Kyle Bass. Also check out the Undervalued Stocks, Top Growth Companies, and High Yield stocks of Kyle Bass.

About the author:

gurufocus
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 4.1/5 (14 votes)

Comments

mcwillia
Mcwillia - 2 years ago
How Right and How Soon?

In his 13f, the position simply reads SPY Call but does not state what strike/maturity. This would be nice to know, although one can guess that he paid net $1.34 for whatever he bought, I suppose. So that could mean he bought Sept 22 '12 strike 95, or Mar 17 '12 strike 130's, or a cocktail of several.

Bass probably assumes the fat tail is underpriced, as he is a big Rogoff guy. So did he go way out of the money and give himself a ton of time? The size of this position is 75% of his net assets, so if he is wrong, he will be wiped off the face of the planet. Does he think Japan catalyzes this crash? Or Europe?

mcfitzg
Mcfitzg premium member - 2 years ago
I believe it is the notational value not $ value, therefore depending on details his at risk $ is a small fraction of the total.

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