Consumer discretionary as a whole didn't do too much last year, although the 4.4% rise beat the broader market. With global recession fears easing and the European Central Bank making free cash available to banks to buy sovereign debt, investors have been willing to take on more risk. That explains why discretionary names surged 12% in the fourth quarter of 2011 and are up another 8.6% in 2012 through Feb. 15, according to S&P Capital IQ. The outlook for consumer discretionary stocks seems to be bright. After earnings grew a 3.5% during the fourth quarter from a year ago, the sector is second overall with an expected earnings growth rate of 12.7% in 2012. For the most part, hedge fund managers are placing bigger bets in the sector, with some of the largest funds boosting exposure to discretionary names. John Griffin's Blue Ridge Capital was one buyer of discretionary stocks during the fourth quarter, picking up shares of Priceline.com ( PCLN), Lowe's ( LOW), Netflix ( NFLX) and Sirius XM ( SIRI), among others. Bill Ackman, on the other hand, dumped more than 21 million shares of Lowe's during the quarter, while Paul Tudor Jones was also a buyer of Sirius XM. John Paulson also made several best on discretionary names during the quarter, most notably taking a 15% stake in Delphi Automotive ( DLPH) after the company's IPO in November. Paulson also bought shares of AMC Networks ( AMCX), the cable network channel that produces hit shows like Mad Men and The Walking Dead. Meanwhile, Eton Park was one fund that cut its exposure to consumer discretionary in the fourth quarter. The fund trimmed its stake in stocks like Viacom ( VIA.B), Comcast ( CMCSA) and Dollar Tree ( DLTR). Tom Steyer's Farallon Capital was also a seller of Viacom shares. His fund also completely sold out of stakes in Home Depot ( HD), Expedia ( EXPE) and CarMax ( KMX). Similarly, Lee Ainslie's Maverick Capital took a hatchet to its discretionary holdings, selling completely out of Time Warner Cable ( TWC), Viacom, Macy's ( M), Kohl's ( KSS) and DirecTV ( DTV), among others. Eddie Lampert's RBS Partners cut stakes in AutoNation ( AN), AutoZone ( AZO) and even Sears Holdings ( SHLD). George Soros was another big seller of discretionary stocks, slashing entire stakes in Amazon.com ( AMZN), Ralph Lauren ( RL), Comcast ( CMCSA) and Priceline.com, among many others. Viking Global was also a seller of Amazon.com and Ralph Lauren. >>To see these stocks in action, visit the Consumer Discretionary Stocks Bought and Sold by Hedge Funds portfolio on Stockpickr.