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Why Smart Money Is Dumping U.S. Stocks

by Justin Spittler, Casey Research:

Some of the world’s smartest investors are cutting back on U.S. stocks…

On Monday, Bloomberg Business reported that hedge fund managers cut their holdings in U.S. stocks by $200 billion last quarter. These funds now hold $1.5 trillion in U.S. stocks, down from $1.7 trillion at the end of June.

The list of fund managers who trimmed their U.S. stock holdings reads like a “who’s who” of the investing world. It includes David Einhorn, John Burbank, David Tepper, and Stan Druckenmiller.

Druckenmiller is one of the world’s most successful hedge fund managers. He generated an incredible 30% average annual return from 1986 to 2010. Today, he runs Duquesne Capital.

At a conference earlier this month, Druckenmiller said he’s investing with caution right now.

I’m working under the assumption that we may have started a primary bear market in July…

I can see myself getting really bearish. I can’t see myself getting really bullish.

Duquesne Capital cut its holdings of U.S. stocks by 41% last quarter, according to recent company filings.

•  David Tepper cut his fund’s position in U.S. stocks by 30% last quarter…

Tepper is the founder of Appaloosa Management, a $24 billion hedge fund that’s averaged 30% annual returns since 1993. That’s almost triple the S&P 500’s 11% return over the same period. Tepper has outperformed the market by nailing several “big picture” calls over his career.

Tepper had been bullish on U.S. stocks since the global financial crisis. But he recently changed his stance. In September, Tepper told CNBC, “I can’t really call myself a bull.”

Read More @ CaseyResearch.com

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