UPDATED 05:14 EDT / FEBRUARY 13 2015

Chairman Co-CIO Bridgewater Associates Ray Dalio NEWS

Respected hedge fund loses faith in Apple and bets on Microsoft

hedgefundBridgewater Associates, a huge hedge fund – largest in the world says Institutional Investor – based in Westport, Connecticut, has revealed that it has diminished its holdings in Apple by almost 50 percent, according to its regulatory filings with the Securities and Exchange Commission. This comes at a time when Apple’s shares have gone up by 15 percent this year, becoming the first U.S. company to pass the $700 billion mark in terms of value.

The company, owned by billionaire Raymond Thomas Dalio, presently owns 259,497 Apple shares, which amounts to about $33 million shares going at $126. Reports suggest that the Apple shares will reach over $200 a piece. Microsoft shares on the other hand are down 8 percent this year so far.

Bridgewater however seems to betting on Microsoft, with its shares in the company increasing to $27.9 million as 2014 closed, an increase from almost $680,000 as the third quarter ended. During the same time period Bridgewater’s Apple stock went from $53.9 million to $27.9 million.

While some analysts have been outspoken in saying that Apple stock is not a good bet, investors have said that Apple will become the first $1 trillion company. But take heed, the reason hedge funds are dubbed ‘smart money’ is because they predict the future and are willing to takes risks in order to reap the rewards. While Apple climbs, perhaps there might be a pothole or two hiding in wait on the road to the future. Perhaps Apple’s princely phones will succumb to cheaper competition; and maybe the fat wallets of the biggest investors are preparing for a shift in demand. At some point all winners must know when it’s time to cash-out. As Value Walk out it, “Often one of the basic value indicators in a relative value trading strategy is to invest in the relatively depressed asset, in this case Microsoft, and sell the now expensive asset, in this case Apple and wait for mean reversion and gravity to run its course.”

Photo credit: Simon Cunningham via photopin cc / featured image: Thos Robinson/Getty Images


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