I want to be hedge fund manager, for they get paid well.
According to the latest ranking by industry magazine AR: Absolute Return+Alpha, last year (2009), David Tepper took home $4 billion. The year before (2008), it was John Paulson who took home $3.7 billion. I assume that those amount are before tax income; The Mr. Teppers and Mr. Paulsons till had to pay tax on the amount. The tax part makes me want to be the government – that was my first career aspiration, with which I can collect all the money without having to put up the work. Since I cannot be the government as an individual (Monarchy was decided not to be the preferred form of government in this county some 200 years ago), I want to be a hedge fund manager, the next best thing.
I want to be the best kind, the kind who takes home most money, after tax if I have to.
And their work does not seem to be that hard, especially looking with the advantage of the hindsight. Paulson constructed the greatest trade ever by betting against the mortgage based securities and the firms holding such toxic assets. David Tepper, on the other hand, achieved his great deed by being on the long side, by betting the US government wouldn’t let the nation’s largest financial institutes go belly up or buying into shares of companies like Bank of America (BAC, Financial) at rock bottom price.
That is the story given by the media, but I suspect there is more to his story. For you see, according to GuruFocus, Tepper’s stock portfolio as of December 31, 2009, only had $3.28 billion of asset. Even the gains in the portfolio were impressive, there were simply not enough of asset to explain the huge gain and his personal profit. As I will show you a later, there has been some profit taking in his holding in BAC so he could have made a few profitable round trips in these stocks within one year. I still doubt he could have made $4 billion for himself with a total portfolio of a little over $3 billion.
So how did Tepper made the majority of his money in 2009? We really don’t know. GuruFocus has the full count of his equity holding, but we do not know his short positions or debt positions, which he is not legally obliged to file with SEC. One day he may tell us all or somebody might write a book about him, but as for now, we know he made money in financial stocks as well as somewhere else. Tepper was a junk bond trader when he was with Goldman Sachs. He might have reaped good gain in junk bonds last year – I am speculating.
That said, equity is still very important part of his total portfolio. Here is a snapshot of his top equity holdings as of December 31, 2009. He will be updating his position of March 31 in another month and a half, we will let you know the changes as soon as possible.
No. 1: Bank of America Corp. (BAC), Weightings: 14.81% - 32,252,101 Shares
Bank of America Corp. is one of the world's financial services companies. Bank Of America Corp. has a market cap of $156.21 billion; its shares were traded at around $18.04 with and P/S ratio of 1. The dividend yield of Bank Of America Corp. stocks is 0.2%.
History of David Tepper with BAC
Besides the common shares, in 4Q09, Tepper also bought 14.8 million shares of Bank of America Class S Preferred share that worth $221 million.
No. 2: Citigroup Inc. (C, Financial), Weightings: 13.94% - 138,121,800 Shares
Citigroup has attracted the investment from so many Investment Gurus that we at GuruFocus do want it to go up from this point on. The reputation of Bruce Berkowitz, John Paulson, George Soros and many more are at stake here.
Citigroup Inc. has a market cap of $95.57 billion; its shares were traded at around $4.18 with and P/S ratio of 1.
History of David Tepper with C
No. 3: Wells Fargo & Company (WFC, Financial), Weightings: 9.05% - 11,000,000 Shares
Wells Fargo & Company is a diversified financial services company. Wells Fargo & Company has a market cap of $162.75 billion; its shares were traded at around $31.37 with a P/E ratio of 17.2 and P/S ratio of 1.6. The dividend yield of Wells Fargo & Company stocks is 0.6%. Wells Fargo & Company had an annual average earning growth of 4.5% over the past 10 years.
Tepper bought his 11 million shares in 4Q09. He also held 311,319 shares (about $285 million) of Class L Preferred shares of Well Fargo. The preferred position accounts for 8.71% of the total $3.28 equity position.
No. 4: Fifth Third Bancorp (FITB, Financial), Weightings: 7.24% - 24,370,199 Shares
Fifth Third Bancorp is a registered financial holding company and a multi-bank holding company. Fifth Third Bancorp has a market cap of $10.8 billion; its shares were traded at around $13.59 with and P/S ratio of 1.1. The dividend yield of Fifth Third Bancorp stocks is 0.3%.
History of David Tepper with FITB
Conclusion
Although perhaps he had not made all the money in common stocks, for the portion he did, he did it with a very concentrated portfolio in financial sectors.
He made several relatively new investments in the sector (Citigroup, Wells Fargo) at prices not too far from today’s price. There might be further gains to be had among his top holdings.
GuruFocus provides real time information and insights of Investment Gurus such as Warren Buffett and David Tepper for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
According to the latest ranking by industry magazine AR: Absolute Return+Alpha, last year (2009), David Tepper took home $4 billion. The year before (2008), it was John Paulson who took home $3.7 billion. I assume that those amount are before tax income; The Mr. Teppers and Mr. Paulsons till had to pay tax on the amount. The tax part makes me want to be the government – that was my first career aspiration, with which I can collect all the money without having to put up the work. Since I cannot be the government as an individual (Monarchy was decided not to be the preferred form of government in this county some 200 years ago), I want to be a hedge fund manager, the next best thing.
I want to be the best kind, the kind who takes home most money, after tax if I have to.
And their work does not seem to be that hard, especially looking with the advantage of the hindsight. Paulson constructed the greatest trade ever by betting against the mortgage based securities and the firms holding such toxic assets. David Tepper, on the other hand, achieved his great deed by being on the long side, by betting the US government wouldn’t let the nation’s largest financial institutes go belly up or buying into shares of companies like Bank of America (BAC, Financial) at rock bottom price.
That is the story given by the media, but I suspect there is more to his story. For you see, according to GuruFocus, Tepper’s stock portfolio as of December 31, 2009, only had $3.28 billion of asset. Even the gains in the portfolio were impressive, there were simply not enough of asset to explain the huge gain and his personal profit. As I will show you a later, there has been some profit taking in his holding in BAC so he could have made a few profitable round trips in these stocks within one year. I still doubt he could have made $4 billion for himself with a total portfolio of a little over $3 billion.
So how did Tepper made the majority of his money in 2009? We really don’t know. GuruFocus has the full count of his equity holding, but we do not know his short positions or debt positions, which he is not legally obliged to file with SEC. One day he may tell us all or somebody might write a book about him, but as for now, we know he made money in financial stocks as well as somewhere else. Tepper was a junk bond trader when he was with Goldman Sachs. He might have reaped good gain in junk bonds last year – I am speculating.
That said, equity is still very important part of his total portfolio. Here is a snapshot of his top equity holdings as of December 31, 2009. He will be updating his position of March 31 in another month and a half, we will let you know the changes as soon as possible.
No. 1: Bank of America Corp. (BAC), Weightings: 14.81% - 32,252,101 Shares
Bank of America Corp. is one of the world's financial services companies. Bank Of America Corp. has a market cap of $156.21 billion; its shares were traded at around $18.04 with and P/S ratio of 1. The dividend yield of Bank Of America Corp. stocks is 0.2%.
History of David Tepper with BAC
| Symbol | Quarter ended on | Value ($1000) | Shares (Split adjusted) | Share Price |
| BAC | 20091231 | 485,717 | 32,252,101 | $ 15.06 |
| BAC | 20090930 | 573,184 | 33,876,101 | $ 16.92 |
| BAC | 20090630 | 618,396 | 46,848,201 | $ 13.2 |
| BAC | 20090331 | 324,291 | 47,550,000 | $ 6.82 |
Besides the common shares, in 4Q09, Tepper also bought 14.8 million shares of Bank of America Class S Preferred share that worth $221 million.
No. 2: Citigroup Inc. (C, Financial), Weightings: 13.94% - 138,121,800 Shares
Citigroup has attracted the investment from so many Investment Gurus that we at GuruFocus do want it to go up from this point on. The reputation of Bruce Berkowitz, John Paulson, George Soros and many more are at stake here.
Citigroup Inc. has a market cap of $95.57 billion; its shares were traded at around $4.18 with and P/S ratio of 1.
History of David Tepper with C
| Symbol | Quarter ended on | Value ($1000) | Shares (Split adjusted) | Share Price |
| C | 20091231 | 457,183 | 138,121,800 | $ 3.31 |
| C | 20090930 | 385,947 | 79,741,067 | $ 4.84 |
No. 3: Wells Fargo & Company (WFC, Financial), Weightings: 9.05% - 11,000,000 Shares
Wells Fargo & Company is a diversified financial services company. Wells Fargo & Company has a market cap of $162.75 billion; its shares were traded at around $31.37 with a P/E ratio of 17.2 and P/S ratio of 1.6. The dividend yield of Wells Fargo & Company stocks is 0.6%. Wells Fargo & Company had an annual average earning growth of 4.5% over the past 10 years.
Tepper bought his 11 million shares in 4Q09. He also held 311,319 shares (about $285 million) of Class L Preferred shares of Well Fargo. The preferred position accounts for 8.71% of the total $3.28 equity position.
No. 4: Fifth Third Bancorp (FITB, Financial), Weightings: 7.24% - 24,370,199 Shares
Fifth Third Bancorp is a registered financial holding company and a multi-bank holding company. Fifth Third Bancorp has a market cap of $10.8 billion; its shares were traded at around $13.59 with and P/S ratio of 1.1. The dividend yield of Fifth Third Bancorp stocks is 0.3%.
History of David Tepper with FITB
| Symbol | Quarter ended on | Value ($1000) | Shares (Split adjusted) | Share Price (Split adjusted) |
| FITB | 20091231 | 237,609 | 24,370,199 | $ 9.75 |
| FITB | 20090930 | 246,870 | 24,370,199 | $ 10.13 |
| FITB | 20090630 | 201,833 | 28,427,210 | $ 7.1 |
| FITB | 20090331 | 63,801 | 21,849,728 | $ 2.92 |
Conclusion
Although perhaps he had not made all the money in common stocks, for the portion he did, he did it with a very concentrated portfolio in financial sectors.
He made several relatively new investments in the sector (Citigroup, Wells Fargo) at prices not too far from today’s price. There might be further gains to be had among his top holdings.
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