Balestra Capital, founded by James Melcher, manages over $2.3 billion, as of September 2012. The fund returns were down -1.95 percent at the end of Q3. Balestra lost on its positions in gold in the last quarter, but added 36,081 more shares of SPDR Gold Trust (ETF) (NYSEARCA:GLD) to its holdings and sold 43,407 Call options for SPDR Gold Trust ( (NYSEARCA:GLD) in the last quarter. The major portfolio highlights from the recently filed 13f are as under:
Balestra bought 11 new stocks in third quarter. All of its top five holdings are now newly added long positions. The fund’s favorite in the last quarter has been real estate and mortgage companies.
Michael Mauboussin: Challenges and Opportunities in Active Management And Using BAIT #MICUS
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The hedge fund has initiated a major new position in the Market Vector Russia ETF Trust (NYSEARCA:RSX). The position now makes up 31 percent of its publicly disclosed long portfolio, with 3.52 million shares at the total price of $101.3 million. Another large stake was bought in ARMOUR Residential REIT, Inc. (NYSE:ARR), with 1,323,922 shares at the total worth of $45,807,699. CYS Investments Inc (NYSE:CYS) is the third largest holding, with 3,052,425 shares. Western Asset Mortgage Capital Corp (NYSE:WMC), PennyMac Mortgage Investment Trust (NYSE:PMT) and AG Mortgage Investment Trust Inc (NYSE:MITT) were also added in the portofolio in Q3.
Balestra closed its holding in 10 stocks in the last quarter. The major positions that were sold out were Annaly Capital Management, Inc. (NYSE:NLY) and American Capital Agency Corp. (NASDAQ:AGNC). The investments previously made up 20.88 and 13.66 percent of the portfolio. 58,920 shares of Market Vectors Gold Miners ETF (NYSEARCA:GDX) were sold in Q3. The fund also sold PUT options for iShares MSCI Emerging Markets Indx (ETF) (NYSEARCA:EEM), Industrial Select Sector SPDR, and PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ)