The Trader Who Ignored a Stock Rally to Buy Turkey’s Only Losers

  • Koza-Ipek companies, Dogan slump after AK Party wins majority
  • Haydar Acun boosts exposure to the companies to 34 percent

Haydar Acun watched some of his favorite stocks tumble as much as 19 percent in the aftermath of Turkey’s surprise election result.

His response? Keep buying.

Far from selling his holdings in two of the only four companies that dropped on the Borsa 100 Istanbul Index on Monday, the 45-year-old money manager, whose Marmara Capital Equity Intensive Fund returned 17 percent this year through Friday, went on a purchasing spree. He now has stakes in all the stocks that bucked the nation’s biggest rally since December 2013 -- companies that have clashed with President Recep Tayyip Erdogan and the AK Party he founded, which won back its majority in Sunday’s parliamentary vote.

"I sold all the banking stocks on my portfolio which were limit up and bought stocks that were limit down," Acun said by telephone from his office in Istanbul, a converted apartment in the city’s business district. "I’m not losing hope, I am aware of the risks but I’m also aware of the substantial returns these companies can offer."

Three of them are units of Koza-Ipek Holding, a group with interests from media to mining whose offices were raided last week and management taken over by authorities. Erdogan accuses Koza of funding Fethullah Gulen, a U.S.-based Islamic preacher critical of the president and labeled a terrorist by Turkey’s National Security Council, an allegation executives have denied. The fourth is Dogan Sirketler Grubu Holding, a publisher and broadcaster that’s had a series of run-ins with Erdogan’s government.

The four stocks rebounded on Tuesday in early trading, led by Ipek Dogal Enerji’s 7.1 percent advance, before declining at the 5:40 p.m. close in Istanbul. The Borsa 100 fell 0.9 percent.

‘Gold is Gold’

Acun’s reasoning is this: Koza has “tons of cash” and the takeover could be reversed by courts. Alternatively, it may prosper under government stewardship. Either way, the company is in the gold-mining business and “gold is gold,” he said.

As for Dogan, its joint-venture with Time Warner’s CNN may shield it from the kind of fate that’s befallen other critical media.

“I don’t think its management will be seized because of its foreign partnerships,” Acun said.

Acun said he tries to “remain calm and focuses on fundamentals.” That can’t have been easy on Monday, as Dogan Holding lost as much as 19 percent. It closed 15 percent lower. Gold miner Koza Altin retreated 2.4 percent and Koza Anadolu Maden dropped 10 percent. Ipek Dogal Enerji lost 12 percent.

By the end of Monday, Acun’s exposure to the four companies accounted for 34 percent of his portfolio, up from about 25 percent.

Before it's here, it's on the Bloomberg Terminal.