Thursday, August 10, 2017

On the Swiss National Bank Selling Their U.S. Tech Stocks: Never Mind—UPDATED

Update below.
Original post:

I've mentioned that I have an ability to hold the 'wrong' company in an M&A deal:
Noble Energy Has More Upside on Huge Gas Find (NBL)
As a pup I could spot an undervalued Exploration&Production company with one whisk of my slide rule.
I also tended to find myself holding the acquiree in a buyout whereas these days it is uncanny how often I've been recommending the purchaser.
3-D Printing: Stratasys Pops on Merger With Objet (SSYS)
 Over the years I've had the odd ability to pick names that will be involved in M&A but end up owning the acquirer, partly, I've surmised, because of a predilection for balance sheets that, well, balance.
Not a problem in this case, I've refined the technique to picking the acquirer, not owning it and having it uptick.
 Objet is private and SSYS is up 20% without my owning it.....
On to today's example of being exactly 180 degrees wrong:

June 12, 2017
Who Is Selling Their Tech Stocks? The Swiss National Bank?


From ZeroHedge:

"Mystery" Central Bank Buyer Revealed: SNB Now Owns A Record $84 Billion In US Stocks
In the second quarter of the year, one in which unlike in Q1 fund flows showed a persistent and perplexing outflow from US stocks and into European and Emerging Markets, a trading desk rumor emerged that even as institutional traders dumped stocks and retail investors piled into ETFs, a "mystery" central bank was quietly bidding up risk assets by aggressively buying stocks. And no, it was not the BOJ: the Japanese Central Bank's interventions in the stock market are familiar to all by now, and for the most part the BOJ keeps its interventions local, mostly propping up Japanese stocks, whether the Nikkei 225 or the Topix.

The answer was revealed this morning when the hedge fund known as the "Swiss National Bank" posted its latest 13-F holdings. What it showed is that, as rumored, the Swiss National Bank had gone on another aggressive buying spree in the second quarter, and following its record purchases in the first quarter, the central bank boosted its total equity holdings to an all time high $84.3 billion, up 5% or $4.1 billion from the $80.4 billion at the end of the first quarter.
As reported last week, the Swiss central bank has accumulated foreign exchange worth 714.3 billion francs (over $740 billion) due to its ongoing interventions to depress the Swiss franc, and has "invested" those funds created out of thin air in stocks and bonds. At the end of the second quarter, it held 20% in equities, of which the bulk was in US stocks.

While we are far beyond the point of debating central bank intervention in equity markets (we do want to remind readers that until several years ago, it was considered "fake news" to even mention it, and those who accused central bankers of manipulating stock markets were said to be paranoid tinfoil basement dwellers), we want to point out that unlike the BOJ, which at least keeps its capital markets distortion local, the SNB, which likewise creates money out of thin air (then sells it for dollars in an attempt to keep the Swiss franc depressed) is actively causing substantial price distortions in the US....MORE
The Swiss National Bank's Largest U.S. Equity Positions

Last week:
The Swiss National Bank's $750 Billion In Stocks, Bonds and Cash