Conference nyoss1::market_investing

600.0. "Robertson Stephens Contrarian Fund" by KOALA::BOUCHARD (The enemy is wise) Tue Oct 26 1993 17:01

There was a discussion in here a while back about the Robertson Stephens
Contrarian Fund (which I can't find now...)  This is a mutual fund which
planned to be extremely aggressive in searching for returns while assuming
an imminent major market reversal.

The initial prospectus claimed they would initially look towards
Gold, Real Estate, and shorts of 'over-priced cult stocks'.

I just got the first semi-annual report, and it makes for interesting 
reading.  They've attracted $35M in new capital, plus the $5M in seed
money.  What's interesting (to me) is seeing how a 'professional' aggressive
fund would approach today's market given their assumption that things are
going to get bad.  Their largest positions are now:

	1. Cash, 28% (but the majority of this is collateral to
		cover shorts)
	2. Gold Mining stocks - 23%
	3. Base Metals - 10%
	4. Financial Services - 10% (including BGR Precious Metals,
		which sounds like it might be misplaced in the report)
	5. Real Estate - 6%

Other noteworthy holdings include
	
	1% Gold Call Options on Futures, all Feb or Apr 1994 contracts
 	   at strike prices between 380 and 400
	3% S&P 500 Index Put Options, Dec '93 through Sep 94, but
		with the biggest stake in Sep '94 deep-in-the-money
		contracts

And a fairly large short portfolio ($7M in liabilities), including

	Acclaim Entertainment
	Cabletron
	Charles Schwab 
	Coca-Cola
	Microsoft
	Novell

They managed to lose 2.5% in their first six months, with 35-40% of
that loss being due to losses in the short positions.

They state their goal as "to achieve absolute annual returns of 20-25%
over the next 5-10 years.  We hope our shareholders invest with a 
minimum 3 to 5 year time frame as we do not plan to manage for short-term
relative performance.  We will invest on a global basis, often
unconventionally, while employing hedging techniques such as short sales
and options to minimize risk."

    I should add that the NAV is up to $10.32 currently, presumably in
    large part due to their gold holdings...