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Billionaire Stanley Druckenmiller Squashed the Market in Q1 With These Top Picks

Stanley Druckenmiller’s Duquesne Capital easily outpaced the timid Q1 market, in which the S&P 500 returned just 0.9%. The billionaire’s fund, now a family office closed to outside investors, continues to report its quarterly holdings with the SEC via Form 13F’s. In its latest filing, which disclosed its equity portfolio as of the end of 2014, Druckenmiller reported 35 long positions, 34 of which were in companies with market caps of at least $1 billion. Those 34 positions had strong weighted average returns of 7.7% during the first quarter.


Druckenmiller announced the closure of his fund to outside investors back in 2010, expressing the challenges of managing a large amount of money both in the personal toll it takes as well as in the difficulty of generating the same high returns. Our own research  also suggests this is the case and that as funds grow larger and larger and must allocate more and more of their investment dollars into large-cap stocks, their returns inevitably take a hit. That’s because their top large-cap picks simply don’t generate the same returns that their small-cap picks do, which we discovered through exhaustive research of the period between 1999 and 2012 (see the results). Since launching our small-cap strategy at the end of August 2012, which only considers funds’ top small-cap picks, the strategy has returned greater than 137% and outperformed the market by 240% during that period.

Biogen Inc (NASDAQ:BIIB) was Druckenmiller’s top pick at the end of 2014, and also a top biotech stock among billionaires as a whole. Druckenmiller was extremely bullish on Biogen Inc (NASDAQ:BIIB) during the fourth quarter, increasing his stake by 247% to 359,400 shares. That vaulted Biogen from the sixth most valuable position in his portfolio right to the top of it, with his exposure to the stock increasing to 11.96% from the 4.21% exposure he had to it at the end of the third quarter. The move certainly paid off, as Biogen Inc (NASDAQ:BIIB) had a big first quarter, returning 24.39%. Israel Englander and Paul Tudor Jones were a couple of the other billionaires invested in Biogen.

After its disastrous launch in Canada, which eventually led to it pulling out of the country completely, Target Corporation (NYSE:TGT) may not have seemed like the wisest of investments. However its stock has been white-hot since the middle of October, gaining over 35%, including 8.85% during the first quarter. The good news for Target Corporation (NYSE:TGT) is that while its Canadian operations were floundering, its much larger U.S operations were flourishing. Same-store sales have seen a big bounceback from disappointing numbers earlier in the year, and online sale have greatly improved. The skepticism from some investors could be seen heading into 2015, with two of the three largest positions in Target Corporation (NYSE:TGT) from funds in our database consisting of put options underlying shares, with one of those positions being held by billionaire Ken Griffin. Druckenmiller on the other hand had the greatest long exposure to the stock at 5.66%, with his position of 760,600 shares, which he again wisely increased during the fourth quarter, by 144%.

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