Are mega hedge funds now taking on meme mania? Recent reports, with fanfare, that famous investor Ray Dalios Bridgewater Associates has purchased GameStop stock GME and AMC Entertainment stock (AMC) - Get AMC Entertainment Holdings, Inc. Class A Reportin the first quarter.
These headlines may be confusing, however, because I explain below why Bridgewaters GME and AMC share purchases are unlikely to indicate that the Connecticut-based hedge fund has been betting large on these stocks heading to the moon.
Bridgewaters Ray Dalio Is The New Meme Investor in Figure 1:GME, AMC?
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Bridgewater buys AMC and GME
On May 16, Bridgewater submitted its 13-month report for the first three months of 2022. This filing is used by certain institutional investors to disclose their long-equities positions. Apple Maven, for example, recently discussed Berkshire Hathaways'' portfolio moves in Q1.
According to the filing, Ray Dalio and his team acquired more than 27,000 shares of AMC. In addition, the fund purchased over 4,000 shares of GME in Q1, which was not owned by Bridgewater since the end of the fourth quarter of last year.
Is there really a story here?
For many people, individual investors, the number of shares listed above may seem quite significant. However, keep in mind that Bridgewater is the world''s largest hedge fund, with an estimated AUM (asset under management) of $150 billion. It is possible that this amount includes only Bridgewaters Pure Alpha strategies and excludes the more passive All-Weather portfolios.
At the conclusion of Q1, the hedge funds position in AMC and GME stocks was estimated at a combined $1.4 million, and is likely to account for only 0.001% of Bridgewaters funds value. The position in AMC and GME would have to be many times greater than expected to result in a rounding error.
Bridgewater''s acquisition of AMC and GME in Q1 is absolutely nothing for the meme cause. In fact, it would make very little sense for a macro fund, which invests based on its views on the wide markets and global economies, to place a significant bet on this or that individual stock.
Think about it: The total value of Bridgewaters'' entire security ownership disclosed via 13-F was less than $25 billion, the amount of less than the estimated AUM of $150 billion. Despite the fact, many of the top ten holdings, like the Vanguard International Equity (VWO) - Get Vanguard FTSE Emerging Markets ETF Reportand the plain SPDR S&P 500 (SPY) - Get SPDR S&P 500 ETF Trust Report, and not individual stock wagers.
The following is a breakdown of Bridgewaters Q1 holdings by key categories. Is there any chance to see the slice of the pie attributable to GME and AMC?
Bridgewater''s projected stock in the first quarter of this year
DM Martins Research
Shareholders of AMC and GME should not read much on Bridgewaters'' recent passage into their favorite meme stocks.
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(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Along the article may also include affiliate links. These partnerships do not influence editorial content. Thanks for the support of Wall Street Memes