The second-largest public pension by assets in the U.S. increased its stake in one of the year’s most-volatile stocks, initiated a position in a marijuana grower, and trimmed its exposure to Warren Buffett.
The California State Teachers’ Retirement System bought more shares of movie-theater chain AMC Entertainment Holdings (ticker: AMC) and analytics-software firm Snowflake (SNOW), acquired shares of the cannabis producer Tilray (TLRY), and reduced its holdings in Berkshire Hathaway (BRKb), Buffett’s investment juggernaut. Calstrs, as the pension is known, disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.
Calstrs said it doesn’t comment on its holdings or on individual investment managers. The pension managed $321.9 billion in assets as of Oct. 31.
Calstrs bought 133,512 more shares of AMC to end the third quarter with 689,917 shares. AMC’s stock price rocketed nearly 19-fold in the first nine months of the year, and so far in the fourth quarter shares are down 1%. For comparison, the S&P 500 index rose 15% in the first nine months, and has gained 6.7% so far in the fourth quarter.
AMC stock caught fire during the meme-stock frenzy early in the year, when small investors communicating via social media bought shares of beaten-down companies in hopes of triggering gains that would force people who had bet against those stocks to buy in order to close their bets. The trend led to a surge in volatility that prompted the Federal Reserve to warn this month that meme-stock related market swings could be a risk to the financial system. AMC’s third-quarter results were better than expected, and the chain is now accepting cryptocurrencies for online payments.
The pension bought 347,900 Tilray shares in the third quarter; at the end of the second, it hadn’t owned any. Tilray stock rose 37% in the first nine months of the year, and so far in the fourth quarter shares are down 6.4%.
In early October, Tilray reported a wider-than-expected loss for the fiscal first quarter. Recent legislative proposals, including one that would decriminalize pot at the federal level have lifted Tilray and its peers. The legal-pot sector, however, saw layoffs during the Covid-19 pandemic.
Snowflake stock rose 7.5% in the first nine months of the year, and so far in the fourth quarter shares have gained 20%. The gain could have been bigger, but Snowflake and other cloud-software peers slipped after President Joe Biden nominated Federal Reserve Board Chair Jerome Powell to another four-year term. Interest rates rose in the wake of the nomination, tempering enthusiasm for richly valued, high-growth stocks.
The company reported a mixed second quarter in August, and Snowflake will report its third quarter after the market close on Dec. 1.
Calstrs bought 119,934 additional Snowflake shares to end the third quarter with 328,801 shares.
The pension sold 511,630 class B shares of Berkshire Hathaway to end the third quarter with 2.9 million shares of Buffett’s firm. Shares rose 18% in the first nine months of the year, and so far in the fourth quarter they have gained 3.7%.
Berkshire Hathaway disclosed that it had a record $149 billion in cash at the end of September. Buffett and John Malone—two billionaires skilled in tax-efficient transactions—recently did a stock swap. During the third quarter, Berkshire Hathaway itself sold Big Pharma stock.