Investors of a certain age -- myself included -- will always
remember the name Julian Robertson, the founder of Tiger
Management. He was one of the pioneers of the hedge-fund industry,
and he built a cult-like following after turning $8 million in seed
money in 1980 into more than $20 billion by the late 1990s.
Robertson eventually retired and turned over the reins to the next
generation. Among this group, one protégé stands out: Charles
"Chase" Payson Coleman III.
If you don't know about him, then you should. He's steadily
amassed a fortune -- and huge profits for investors -- by gaining
early stakes in up-and-coming technology companies. That
positioning enabled his firm, Tiger Global, to rack up a 21%
annualized gain during the past decade. In fact, his fund was up a
hefty 45% in 2011, making it the best-performing
in the country.
To be sure, Coleman's ability to buy companies before they go
public helps him to generate returns the rest of us can only dream
about. Yet, in recent months, he's been much more focused on
publicly-traded stocks, building clear and concentrated positions
in the technology and consumer space. He's also been an active
seller of stocks that he says may be less relevant in this changing
regulatory filing, so let's take a closer look in what Coleman is
Ditching the old world
Coleman has historically held stakes in traditional media
companies, but that's no longer the case. In the second quarter, he
closed out long-held positions in
Liberty Media (Nasdaq:
, wireless firm
Crown Castle (NYSE:
and ticket vendor
Live Nation Entertainment (NYSE:
. These companies all generate significant
free cash flow
, though Coleman presumably questions their relevance in the
changing media landscape.
Coleman reinvested those proceeds into new or existing positions
that collectively point to a clear theme. These include:
• An expanded position in European and South American broadband
Liberty Global (Nasdaq:
, which shows that he's not necessarily as dismissive of
traditional media as he is of U.S.-based media assets.
• A new position in
where he picked up 1.9 million
at an average price of $29.60. The fact that shares now trade for
just more than $21 shows a bit of bad timing, but Coleman is a
clear believer in this controversial stock's
• He also added to his position in
, and now holds 1.4 million shares. That works out to be a $900
million stake, which isn't pocket change no matter how big your
• Coleman has been building a position in
. His current stake of 1.48 million shares is worth roughly $200
million. He also has a 2.4 million share stake in Chinese security
Qihoo 360 Technology (NYSE:
. Lastly, he has been building a position in Chinese education firm
TAL Education Group (NYSE:
Coleman's recent Facebook purchase wasn't the only case of bad
timing. He also added roughly 80,000 shares to an existing 780,000
share stake in
at an average price of $689 a share. Shares went on to plunge in
subsequent weeks, though
as I noted here
, they look poised to rebound back above $700 as investors look
past the near-term weakness in European travel.
And though he made no changes in the second quarter, Coleman
still holds a $600 million stake in Russian search engine firm
I profiled this firm back in February.
) Although it remains stuck in the low $20s, by making this his
second-largest holding behind Apple, Coleman is obviously a true
Risks to Consider:
These moves only get filed quarterly with the SEC, so positions
may have been adjusted since the end of June.
Action to Take -->
It's notable that this top-performing manager is shedding exposure
to old-line media companies such as Viacom while making ever-larger
bets on newer technology firms, here in the United States as well
like China and Russia. Those markets are often considered
speculative and risky, but Coleman clearly believes they
the most robust long-term potential.
-- David Sterman
[Note: Warren Buffett, Goldman Sachs, John Kerry... maybe even
YOUR own Congressman already own many of these stocks. They're
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David Sterman does not personally hold positions in any
securities mentioned in this article. StreetAuthority LLC does not
hold positions in any securities mentioned in this article.
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