Eric Sprottby Jason Smith | December 30th
Filed in: Hedge Fund and Institutional News
Is Eric Sprott’s uber-bearish call for the S&P on target, or is he merely hopeful that an equity dive will bolster his gold-heavy portfolio?
Stocks have rallied by 66% from their March lows, and while bulls appear to maintain control of the market, commodity hedge fund manager Eric Sprott doesn’t buy it. In an interview with Bloomberg, Sprott said “We’re in a bear market that will last 15 or 20 years,” and the S&P 500 will plunge below its March 2009, 12-year low.
We noted Sprott’s bearish outlook back in August. The market’s surge towards year-end has likely continued to hurt his fund’s short book, but continued dollar weakness has bolstered its gold-saturated portfolio.
A look at Sprott’s top U.S.-listed equity holdings at the end of Q3 shows that, like 2008 hedge fund all-star John Paulson, he has a penchant for gold miners.
During the third quarter, Sprott was adding to stakes to precious metals plays Barrick Gold (ABX), Yamana Gold (AU), Eldorado Gold (EGO), Jaguar Mining (JAG), and Silver Wheaton (SLW).
Sprott also held a large position in Oil Sands Stocks Index component Oilsands Quest (BQI).
A look at the Gold and Silver Stocks Index’s performance chart over the last six months shows that the sector is trading near a technical support level of its recent upward trend. However, while select components like Crystallex International (KRY), Corriente Resources (ETQ), and DRDGOLD (DROOY) have added 30% or more over the last month, the bulk of the segment is negative for the period.
It will be interesting to see whether Sprott’s forecast is on target. To see a performance chart of his fund’s top-holdings, or check out some other stocks he’s invested in, visit tickerspy.com.
Pro portfolio performance is based on institutions’ top-15 holdings as disclosed in quarter-end filings with the SEC. Pro performance does not take into account additional holdings beyond the top 15 nor does it include positions that are not required to be disclosed by the SEC. As such, Pro portfolio performance should be considered an approximation and not a precise record of how an institution has performed over time.
Tags: ABX, AU, BQI, DROOY, EGO, ETQ, JAG, KRY, SLW