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Intriguing Similarities Between Curtis Macnguyen and David Einhorn’s Portfolios

Curtis Macnguyen started Ivory Capital in 1998 after working at Siegler, Collery & Co. He returned 11.8% annually after fees between 1998 and early 2009, vs. -0.5% for the S&P 500. He likes to invest in companies that are trading well below their intrinsic value and short the ones that are trading well above it. He looks for mispriced securities with at least 30% margin of safety that have significant catalysts. Macnguyen believes “a bargain that stays a bargain is not a bargain”. He doesn’t short just for the sake of hedging, he also tries to make money from his short positions. Ivory Capital is usually 60-80% long and 30-50% short, so net exposure is around 30%.

Curtis Macnguyen

Unfortunately Ivory Capital’s flagship fund is down 1.9% during the first six months of 2011. When we went over Curtis Macnguyen’s long positions we noticed a lot of similarities between his stock picks and David Einhorn’s stock picks. Here are the 10 positions they have in common at the end of March.

1. Best Buy (BBY): Einhorn had $172 Million in BBY, Macnguyen had $14 Million.

2. British Petroleum (BP): Einhorn had $147 Million in BP, Macnguyen had $88 Million.

3. Carefusion (CFN): Einhorn had $283 Million in CFN, Macnguyen had $151 Million.

4. CVS Caremark (CVS): Einhorn had $112 Million in CVS, Macnguyen had $202 Million.

5. HCA Holdings (HCA): Einhorn had $99 Million in HCA, Macnguyen had $20 Million.

6. LyondellBasell (LYB): Einhorn had $92 Million in LYB, Macnguyen had $20 Million.

7. Microsoft (MSFT): Einhorn had $230 Million in MSFT, Macnguyen had $172 Million. According to the recent letter Macnguyen wrote to Microsoft, Ivory Capital increased its stake in MSFT since the end of March. Interestingly both David Einhorn and Curtis Macnguyen started to invest in Microsoft during the first quarter of 2007. Coincidence?

8. Pfizer (PFE): Einhorn had $507 Million in PFE, Macnguyen had $98 Million.

9. Sprint Nextel (S): Einhorn had $259 Million in S, Macnguyen had $197 Million. They have the largest positions in S among the 300+ hedge funds we are tracking. Einhorn lost around $50 Million from his S investments after S’ earnings announcement.

10. Yahoo (YHOO): Einhorn had $141 Million in YHOO, Macnguyen had $187 Million. Einhorn told his investors in his quarterly letter than he sold his entire stake in YHOO after the news about Alipay was revealed.

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