Steve Cohen‘s Point72 Asset Management began managing outside capital in 2018 after operating for several years as a family office following Cohen’s former hedge fund SAC Capital Advisors being involved in one of the 10 Biggest Insider Trading Scandals Ever to Rock Companies. That’s great news for investors, who have reportedly poured $5 billion of their assets into the fund since it opened to the public, as Cohen’s returns have been some of the best in the industry. His success has propelled him to a personal fortune of $12.8 billion according to Forbes, making him one of the top 100 richest people in the world.
November was a rough month for the fund however, as it lost 5%, and a bear market may be upon us sooner than later according to the billionaire investor. During an event at the 92nd Street Y in mid-November, Cohen predicted a bear market by 2020, and expected that returns won’t be very good over the next two years. Several industries have already fallen into bear markets, with the most recent being finance, now down by 20% from its 52-week highs, while several others are in correction territory (down by over 10% from their 52-week highs).
Despite the influx of $5 billion in capital, Point72’s 13F portfolio has only risen by just over $1 billion in value in 2018 according to its latest 13F filing, declining by 3% quarter-over-quarter to $24.25 billion as of the end of Q3. Cohen’s fund was particularly bullish on tech stocks in Q3, which rose by nearly 4 percentage points to 16.46% weighting in the fund’s portfolio. Healthcare remained the sector which was given the most weighting (18.49%) by Point72, while the fund lowered its exposure to consumer discretionary (11.09%) and communications (7.31%) stocks during the quarter.
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On the next page we’ll check out four stocks that Cohen was confident about heading into Q4 despite his broader market misgivings, as well as one stock he dumped.