So far this year, US stocks have been at the bottom of the world's major markets.

The s & p 500 is down more than 18% this year, closer to a bear market, and the Dow is down nearly 14% this year, giving up most of its 2021 gains. The technology-heavy Nasdaq index fell 27% this year, giving up all its 2021 gains.

In fact, US stocks are facing a lot of uncertainty. Global inflation has continued to soar since the start of the year due to high demand and supply chain disruptions caused by outbreaks. In February, a fierce conflict broke out between Russia and Ukraine, and commodity prices rose, further fuelling inflation. In response to inflation, major central banks, including the Federal Reserve, have pulled out of the stimulus package and started the cycle of raising interest rates, investors have sold risky assets.

So how do Wall Street bosses invest at a time of increased volatility?

Recently, Qiaoshui, Citigroup, Goldman Sachs Group and other Wall Street institutions disclosed what is known as the "market vane" of the 13F quarterly position report. Let's take a look at how the bosses respond to market volatility.

Sweep energy stock

• Buffett

In the context of the downturn in U. S. stocks, "stock god" Buffett continues to sweep energy stocks.

Buffett once said: "I am greedy when others are afraid, and I am afraid when others are greedy." Buffett's Berkshire Hathaway reportedly spent tens of billions of dollars to invest in stocks during the decline in U. S. stocks over the past few months.

Position report shows that Berkshire increased its holdings in the first quarter$Chevron Corp (CVX.US) $120 million shares, up 316 per cent from the previous quarter, with a market capitalization of $25.919 billion, accounting for 7.02 per cent of the portfolio. By the end of the first quarter, Chevron Corp had been promoted to the fourth largest heavy stock from the ninth largest in the fourth quarter of last year.

In fact, Buffett has already "targeted" Chevron Corp. According to the position report, Berkshire increased its position in Chevron Corp by 5.58 million shares in the third quarter and 9.54 million shares in the fourth quarter of 2021, up 24 per cent and 33 per cent respectively from the previous quarter.

Why is Chevron Corp favored by Buffett? It is understood that since the second half of last year, international energy prices have risen sharply, and Chevron Corp is one of the biggest beneficiaries. Chevron Corp also has the safest balance sheet in the industry, valuation indicators and earnings indicators are attractive, investment risk is relatively low, and the company buys back shares and returns money to shareholders. In addition, Chevron Corp has made progress in areas such as biofuels and carbon capture, which is expected to transform his energy business.

In addition to Chevron Corp, Berkshire increased its holdings in the first quarter.$Western Oil (OXY.US) $5.89 million shares, with a market capitalization of about $13.2 billion, accounting for 3.57% of the portfolio, ranking the sixth largest. Buffett's logic of taking a fancy to western oil may be similar to Chevron Corp.

After a significant increase in positions, energy stocks accounted for 9.26% of Berkshire's total positions, up from 1.36% in the fourth quarter of last year. However, from the perspective of position preference, Buffett still prefers information technology stocks and financial stocks, accounting for 45.86% and 27% of the total positions, respectively.

Thanks to the excellent performance of energy stocks, Berkshire Hathaway's total market capitalization of its positions reached $363.554 billion in the first quarter, up 9.85 per cent from the previous quarter.

In addition to Buffett, many Wall Street bigwigs also favor energy stocks.

• Druckenmiller

Stanley Druckenmiller, a former portfolio manager at Quantum and now chief investment officer at the multibillion-dollar family office Duquesne, bought $250 million worth of energy stocks in the first quarter.

In the first quarter of 2022, Drucken Miller began to build positions.$Coterra Energy (CTRA.US) $、Vanguard Natural Resources (PXD.US) $、$Cenovus Energy (CVE.US) $、$Antero Resources (AR.US) $和$Phillips 66 (PSX.US) $And increased its holdings$Chevron Corp (CVX.US) $。

Druckenmiller also built a new warehouse mining enterprise.$Tektronix Resources Limited (TECK.US) $It's a position. It is worth noting that the largest natural resources position of the fund managed by Druckenmiller is still$McMoran Gold (FCX.US) $。

It is understood that among the energy stocks invested by Druckenmiller, Phillips 66 is an oil refinery, while Chevron Corp and Cenovus Energy are comprehensive producers. Coterra Energy, Pioneer Natural Resources and Antero Resources are pure upstream operators that produce oil and gas. It can be seen that Druckenmiller has invested in all aspects of the energy industry, but that does not mean that he is particularly optimistic about any of the energy sub-sectors.

• Blackstone Group Inc

Blackstone Group Inc Group (BX.US) is still fond of energy stocks.

From the perspective of position preference, energy still accounted for the first proportion of Blackstone Group Inc's total positions in the first quarter of this year, accounting for 62.07 per cent.

In Blackstone Group Inc's top five heavy stocks, energy stocks occupy four seats.

Among them$Cheniere Energy Partners LP (CQP.US) $It continues to rank first, with a position of about 204 million shares and a market capitalization of about $11.485 billion, accounting for 29.15% of the portfolio.

In addition$Energy Transfer (ET.US) $、$MPLX LP (MPLX.US) $、$Enterprise Products (EPD.US) $And other energy stocks into the top five heavy stocks.

Increase defense stocks

Generally speaking, when the economic cycle is relatively poor, defense stocks are generally regarded as better havens for capital because of their strong persistence and stable performance. Common defense stocks include consumption, pharmaceuticals and banks, as well as energy, which is favored by Buffett.

Against the backdrop of the still volatile global market environment, many Wall Street institutions have also fended off volatility by increasing their positions in defensive stocks.

• Bridge water

In the first quarter of this year, Bridge Water Fund, the world's largest hedge fund, not only soared its allocation to emerging markets, but also significantly increased its positions in consumer and pharmaceutical stocks.

Specifically, consumer stocks and pharmaceutical stocks account for 5 of the top 10 stocks in Qiaoshui, including$Procter & Gamble Co (PG.US) $、 $Johnson & Johnson (JNJ.US) $、$Coca-Cola Company (KO.US) $、$PepsiCo Inc (PEP.US) $And$Costco Wholesale Corp (COST.US) $Wait. These stocks increased their holdings by a large margin in the first quarter.

The position of the Bridge Water Fund is also more diversified. In the first quarter of this year, consumer goods stocks, financial stocks, health care stocks and non-essential consumer goods stocks accounted for 24.12%, 23.51%, 16.7% and 12.61% of the total positions, respectively.

Qiaoshui's diversification strategy has also paid off. According to statistics, the total market value of Qiaoshui's positions reached US $24.807 billion in the first quarter, an increase of 44 per cent over the previous quarter.

• Pershing Square

Hedge fund boss Bill Ackerman (Bill Ackman) still has a deep love for consumer goods stocks.

According to the report, Pershing Square, INC. Capital, a Pershing Square capital management company owned by Ackerman, made a large position in non-essential consumer goods stocks in the first quarter.

$Lowe's Companies Inc (LOW.US) $、$Chipoli Mexican BBQ (CMG.US) $、Hilton Hotel (HLT.US) $和$Food Brand International (QSR.US) $Non-essential consumer goods stocks and other non-essential consumer goods occupy the top four major stocks.

From the perspective of position preference, non-essential consumer goods, real estate and communications stocks ranked in the top three, accounting for 72.87%, 13.58% and 11.21% of the total positions, respectively.

It is worth mentioning that Pershing Square built a new warehouse in the first quarter.$Netflix Inc (NFLX.US) $It bought 3.1 billion shares, but Netflix Inc plunged 38 per cent during that period. In April, Bill Ackerman revealed that the company had sold its stake in Netflix Inc. The media estimated that he lost about $435 million on the investment.

Fancy play option

In order to resist market fluctuations, Wall Street banks have come up with the magic weapon of option investment.

• Citigroup

Citigroup Inc (C.US) bought a lot of call and put options on index funds in the first quarter, according to the position report.

Specifically, Citi bought a lot of put options on the S & P 500 index in the first quarter.$means 100ETF-Invesco QQQ Trust (QQQ.US) $Put options,$SPDR S & P 500 index ETF (SPY.US) $Call options,$iShares Russell 2000 Index ETF (IWM.US) $PowerShares QQQ Trust, Series 1 call option, and sell iShares iBoxx high yield corporate bond index ETF put option,$Amazon.Com Inc (AMZN.US) $Put options,$Tesla, Inc. (TSLA.US) $Put options,$Carvana (CVNA.US) $And$Carvana (CVNA.US) $。

Among the top five heavy positions in Citi, index put options occupy the top three, while the S & P ETF and S & P 500 ETF call options rank fourth and fifth, respectively.

It is understood that Citi is likely to implement the option investment strategy of straddle options (Straddle), that is, to buy or sell call options and put options of the same underlying assets on the same maturity date at the same execution price. Of course, it may also be the option investment strategy of implementing wide-span options (strangle option), that is, buying a call option contract and a put option contract with different prices and the same maturity date.

Although the above data cannot determine which option strategy it will eventually implement, what is certain is that it is long index volatility (both strategies benefit from rising underlying volatility). This may reflect the bank's view of rising market volatility and increased risk in the future.

• Goldman Sachs Group

Like Citigroup, Goldman Sachs Group is keen to hedge with options.

Goldman Sachs Group bought a lot of ETF call options on the S & P 500index in the first quarter.$iShares Russell 2000 Index ETF (IWM.US) $Put, etc., and sell$Tesla, Inc. (TSLA.US) $Put options, etc.

Goldman Sachs Group also built positions in the first quarter.Bond Index ETF-iShares iBoxx High yield Corporate Bonds (HYG.US) $Call options,Emerging market dollar debt DTF-Ishares (EMB.US) $Call options,$Datadog (DDOG.US) $Call options, etc., clearance$BABA (BABA.US) $Call options,On Semiconductor (ON.US) $Call options, etc.

Goldman Sachs Group, who is keen on hedging, still has a large position in technology stocks.$Apple Inc (AAPL.US) $、$Microsoft Corp (MSFT.US) $和$Amazon.Com Inc (AMZN.US) $Ranked among the top five heavy stocks. From the perspective of the plate, information technology stocks accounted for 19.06% of Goldman Sachs Group's total positions, second only to 31.64% of financial stocks.

Technology stocks: "cut meat" or copy the bottom?

High-valued technology stocks have been hit hard as major central banks such as the Federal Reserve have raised interest rates to dampen inflation and investors have dumped risky assets.

Are the technology stocks that once led the rise in US stocks worth investing in? Wall Street institutions take a different view.

• Some institutions increase their positions in technology stocks

According to the position report, IVZ.US continued to increase its holdings in the first quarter, including$Microsoft Corp (MSFT.US) $、$Apple Inc (AAPL.US) $和$Netflix Inc (NFLX.US) $This also seems to echo the view of Kristina Hooper, the group's chief global market strategist, that the market is closer to the bottom than to the top.

"I am optimistic about the outlook for technology stocks, but the Fed's easing policy has become mother's milk and it will be a painful weaning process," Hooper said during the tech stock slump.

The total market value of Q1, which holds a large number of technology stocks, also shrank to some extent to $392.052 billion, down 5.5% from $414.839 billion in the previous quarter, but still up from $374.714 billion a year earlier, according to the documents.

In addition to Jingshun, some institutions still increased their positions in technology stocks in the first quarter. For example, Goldman Sachs Group and Bank of America Corporation both increased their holdings in Apple Inc, Microsoft Corp and other science and technology stocks in the first quarter. Some hedge funds, such as Farallon Capital Management and Coatue Management, have also increased their holdings in some technology companies.

• Institutions generally stay away from technology stocks

At present, however, institutional investors generally stay away from technology stocks.

Citi reduced its holdings of large-scale technology "FAAMG" by 5% and 22% in the first quarter, including Apple Inc, Microsoft Corp,$Alphabet Inc-CL C-A (GOOGL.US) $The reduction of holdings reached 22%, 17% and 9% respectively, while Amazon.Com Inc and$Meta Platforms (FB.US) $It is relatively low, 4% and 5%, respectively.

Bank of New York Mellon (BK.US) reduced its holdings of Apple Inc, Microsoft Corp, Amazon.Com Inc, Alphabet Inc-CL An and$Alphabet Inc-CL C-C (GOOG.US) $However, these five stocks are still in the top five. In addition, the Bank of New York Mellon also significantly reduced its positions in Meta,$Oracle Corp (ORCL.US) $和$Adobe Inc (ADBE.US) $等。

It is reported that hedge funds Light Street, Yahoo, Hitchwood Capital Management LP and so on have also reduced or cleared some technology stocks.

Summary

Overall, Wall Street institutions have adopted different strategies in the face of market volatility.

From the result of the change in the market value of the position, the consumer and pharmaceutical stocks were significantly increased, and the diversified Qiaoshui fund achieved the best performance, with the market value increasing by 44% month-on-month. Berkshire, which has increased its holdings in energy stocks such as Chevron Corp, has also done well, with its market capitalization up nearly 10 per cent from a month earlier.

Investors can adjust their investment strategies with reference to changes in institutional positions. It is worth noting that the position report announces the movements of institutions over the past quarter, and institutional positions may change rapidly at a time when the market environment is changing rapidly.