Hayden Capital, an investment management firm, published its third-quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly net return of 2.8% was delivered by the fund for the third quarter, compared to the 0.6% and 1.3% gains of its benchmarks, the S&P 500 and MSCI World Index respectively for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
Hayden Capital, in its Q3 2021 investor letter, mentioned Coinbase Global, Inc. (NASDAQ: COIN) and discussed its stance on the firm. Coinbase Global, Inc. is a Wilmington, Delaware-based cryptocurrency company with a $90.4 billion market capitalization. COIN delivered a 17.73% return for the past month and it closed at $345.36 per share on November 15, 2021.
Here is what Hayden Capital has to say about Coinbase Global, Inc. in its Q3 2021 investor letter:
“Coinbase (COIN): We established a new position in Coinbase, the dominant US crypto exchange and brokerage, this quarter. Given the misperceptions and early-stage nature of the industry, I thought it would be helpful for our partners’ understanding to share a report outlining our thesis, which we published on October 31st.
At a high level, we believe the crypto economy is in the middle of “crossing the chasm” into mainstream adoption & use cases, which will result in millions of mainstream users needing to transact in crypto in some form.
Coinbase is well positioned in the Western, regulated markets to capture this influx – considering their dominant market share / mindshare, their focus on the casual user and thus superior userexperience compared to alternatives, and their position as a “toll-booth” for this industry. Longer-term, we also believe Coinbase has “super-app” ambitions, and will be the primary gateway for both the general population and institutions to interact with the crypto economy…” (Click here to see the full text)
Based on our calculations, Coinbase Global, Inc. (NASDAQ: COIN) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. COIN was in 49 hedge fund portfolios at the end of the first half of 2021. Coinbase Global, Inc. (NASDAQ: COIN) delivered a 34.47% return in the past 3 months.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. Recently we came across a high-growth stock that has tons of hidden assets and is trading at an extremely cheap valuation. We go through lists like the 10 best growth stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage.
Disclosure: None. This article is originally published at Insider Monkey.
