Armored Wolf’s global macro strategy pursues investments in a number of asset classes. The fund suffered as precious metals recorded one of their toughest months in November and gold declined 5.5%.

Apple Inc.

John Brynjolfsson, CIO of Armored Wolf, notes in the monthly newsletter that the fund suffered on both the long and short side in November. Shorts in the euro, French bonds and Italian bonds detracted whereas longs in precious metals also ended on a loss.

Gains in Apple, Revlon

While Armored Wolf did not do well in commodity trading, the fund did well in its equity book. With only 13% net exposure in equities, the fund was able to generate a +2.5% return from this strategy, which compares to the +2.8% return of the S&P 500 in the same period. Armored Wolf gained in Apple Inc. (NASDAQ:AAPL), Revlon Inc (NYSE:REV) and airline stocks in last month.

The airline industry has lately been a hot holding among hedge funds, Julian Robertson’s Tiger Management, Barry Rosenstein’s JANA Partners, and David Yarrow’s Pegasus Fund all have recorded major gains in the sector. David Tepper, the ultra-bull, has large positions in several U.S based airlines and has once again recorded gains in this sector.

Airline industry makes big returns

Armored Wolf profited from its positions in Delta Air Lines, Inc. (NYSE:DAL) and United Continental Holdings Inc (NYSE :UAL). Hedge fund gurus like Julian Robertson and Stanley Druckenmiller are bullish on Delta as well. Like several other hedge funds, Armored Wolf also gained as the merger of US Airways Group Inc (NYSE:LCC) and American Airlines was approved by the courts. The consolidation in the airline industry bodes well for the other players; both Delta and United rose in November on the merger news.

Armored Wolf was unable to bag any profits in its energy holdings but the fund indirectly benefited from the decline in crude oil prices. The letter notes that from September to the end of November, crude oil has fallen by 15.5%, thus cutting the principal cost of the airline industry and lifting respective airline stocks.

Icahn is right

In the case of Apple Inc. (NASDAQ:AAPL), Brynjolfsson thinks that the company is going to come out as a major winner in the holiday season as sales of its latest iPhone and iPads speed up. The CIO also agrees with Carl Icahn in his repeated insistence that Apple should buy back stock. He writes,

“Apple has been missing a chance to buy back shares prior to the recent appreciation, which would have been highly advantageous. Due in large part to the severely suboptimal capital allocation policy, as well as ongoing concerns about competition and innovation, the shares remain highly undervalued despite tremendous execution from the company on what matters most, its ability to deliver products that consumers love.”

The fund was able to profit from Revlon, quite simply because it published a bullish paper on the company on Seeking Alpha and SumZero. In Armored Wolf’s analysis, Revlon has a 40% upside, and shares are currently trading around $26.