From Bloomberg, December 12:
Bill Harnisch didn’t believe in the stock rally. He still crushed it.
While his peers this year diversified their bets across Big Tech and macro trades, the New York-based hedge fund manager packed more than 90% of his long book into just three stocks — companies building the power lines and fiber networks behind the boom in artificial intelligence, high speed internet and clean energy. That has helped his $3.1 billion Peconic Partners fund return 79% in 2025, Harnisch said. It has more than quadrupled the S&P 500, beating it for the fifth time in six years.
It was pure-play stock picking: low conviction on the macro, high conviction in the portfolio. Harnisch kept net leverage low, expressed deep uncertainty about the economy, and still delivered one of the strongest hedge-fund performances of 2025.
Quanta Services Inc., Dycom Industries Inc. and MasTec Inc. don’t make chips or software. But as demand for electricity and bandwidth surged, they became some of the year’s most profitable infrastructure trades.
“I don’t mind keeping the low net and I sound like a broken record,” Harnisch, who began his financial career in 1968, said in an interview. “If you asked me where the GDP is going to be next year, I could paint with ten different stories. I have no idea.”
That humility didn’t cost him. In November alone, he said Peconic gained 20% while the broader market was flat. Quanta, a power-line builder that made up more than half of the fund’s long holdings based on the latest regulatory filing, climbed more than 3% last month. Dycom, a provider of contract services to phone and cable companies, soared 26%, while construction company MasTec jumped almost 5% over the same period. For the year, each has surged more than 48%.
For 2026, Harnisch sticks to his cautious view, expecting “flat to down” performance for the S&P 500. The sober outlook is a departure from Wall Street strategists, who according to the latest Bloomberg survey, see equities rising for a fourth straight year.
His skepticism backfired last year as Peconic trailed the S&P 500 largely due to a short position placed as protection.Despite that, Harnisch repeated his concern at the start of this year that the market was too expensive while President Donald Trump’s tariff agenda threatened to upend the order in global commerce. The S&P 500 plunged to the brink of a bear market in April, before staging a powerful rally as Trump walked back his trade rhetoric and the Federal Reserve resumed cutting interest rates.
Read More: Bill Harnisch’s Peconic Hedge Fund Is Up 13% in April on Shorts
Fund’s Short Bets
Peconic, established in 2004, seeks to invest in companies that will grow faster than the economy in the long run. At the same time, short positions in the fund are built either as a hedge to offset the risk from its core holdings or as a way to exploit over-priced shares.Right now, the fund is betting against retailers on the premise that large rivals such as Walmart Inc. and Amazon.com Inc. are ramping up aggressive pricing tactics to take market share and that spending — particularly among low-income consumers — is under pressure from sticky inflation and a softening labor market. It’s also shorting industrial stocks including GE Vernova, Eaton and Comfort Systems on expectations that in the event of a market selloff, their shares may decline more than its core holdings in the same sector, providing the fund with some protection....
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Over the last twelve months GE Vernova is up $339.7 (+102.32%) and is up 391.20% since the March 2024 spinoff from GE.
It's brutal when the short leg (the dirty hedge) of a pair trade does that. We'll see what 2026 brings.
