Tuesday, February 23rd, 2010
A Look into Wilbur Ross' Market-Beating Portfolio
YES, I want free trades through Zecco.com!
National Financial Partners Corp. (NYSE:NFP) and PowerShares DB US Dollar Index Bearish (NYSE:UDN) represent two of the most significant new additions to the billionaire investor’s portfolio, while Assured Guaranty Ltd. (NYSE:AGO) remains his largest position.
Wilbur Ross is the billionaire founder of private-equity firm WL Ross & Co. that is well-known for distressed investing and restructuring failed companies. While dormant through much of the beginning of 2010, his stock portfolio jumped more than 20% in February after several of his key holdings moved higher, making his portfolio worth a second look.
National Financial Partners Corp. (NFP, Free Analysis) has jumped more than 30% since the iconic investor first reported a stake back in late December 2009. Purchasing at prices ranging from $7.81 to $9.80 per share, the stock trades at around $11.49 after reporting sharply higher-than-expected earnings for its fourth quarter.
The billionaire investor also made a so-far-correct bet on a recovery in the timber industry. Shares of the aptly tickered iShares S&P Gbal Tiber & Fortry Ind Fud (WOOD, Free Analysis) jumped more than 3% since he added 185,000 shares to his position at between $34.33 and approximately $40.53 per share.
Mr. Ross also initiated a large bearish position in the U.S. dollar by purchasing 187,500 shares of PowerShares DB US Dollar Index Bearish (UDN, Free Analysis) for $26.67 a piece. However, a recent Fed rate hike and growing concerns in Europe have led to an increase in the dollar, despite inflationary concerns and continuing domestic turmoil.
The billionaire investor also purchased SPDR S&P China (GXC, Free Analysis) at an inopportune time. Recently, China announced that it would try and curb lending by increasing reserve requirements for its major banks. The result was a sharp pullback in many Chinese stocks, as well as lower growth forecasts going forward.
In the end, Wilbur Ross’ portfolio has beat the market largely due to some strong gains in certain niche stocks. Whether or not his other bets like that on the dollar or a Chinese recovery turn out successful remains to be seen, but this successful investor is certainly worth watching.
Want to become a better trader? Click here to sign-up for a FREE trading e-course taught by a former floor trader!
-- Written by Simon Monger
