There are many great investors, who manage some of the best-performing funds and have built massive fortunes while managing their clients’ money. Some investors have been on Wall Street for decades, such as Carl Icahn, Steve Cohen, or Ray Dalio. Others are younger and while are often overlooked by the media, are still worth following. For example, it’s highly likely that you haven’t heard of Leonard Potter of Wildcat Capital Management, Larry Chen and Terry Zhang of Tairen Capital, or Mitchell Blutt of Consonance Capital Management. Yet, these funds’ stock picks posted returns of over 89% during the 12-month period ended September 2017.
Following hedge fund managers can be very useful. Many great investors often make appearances on TV or give interviews to papers, where they present their thoughts on various global events and discuss some of their investment ideas. At the same time, hedge funds disclose their US equity holdings in quarterly 13F filings, which can serve as treasure troves of information. Investors differ in their approaches and following their stock picks can help beat the market. At Insider Monkey, we follow over 650 hedge funds as part of our investment strategy that involves a proprietary methodology to identify the best stocks in the small-cap space that the best performing hedge funds are collectively bullish on. This strategy has outperformed the market by more than 20 percentage points since it was launched in 2014 and we share the stock picks in our premium newsletters. We also have a monthly activist newsletter that focuses on a single activist fund and offers the best approach to imitate that fund (read more details here).
Among the 650 funds in our database, 40 funds are managed or were founded by a billionaire. Billionaire investors are a particularly interesting group to follow because their expertise and great stock picking skills have allowed them to amass vast fortunes and earn prominent positions in Forbes’ lists of richest people. Mimicking billionaire investors is a popular strategy, although it should be noted that most billionaires have a conservative approach, invest in large companies that usually perform in-line with the broader market and they stick to their holdings for very long periods of time. While this is good for defensive investors and investors seeking to build a portfolio for the long run, this is not the best approach in a bull market.
Nevertheless, let’s take a look at stocks that most successful investors in the world like. Instead of simply listing their top five holdings, we have decided to step it up a notch and identify stocks that billionaires are collectively bullish on. To identify the stocks, we have combed through last 13F filings of 10 funds managed or founded by billionaires: Warren Buffett’s Berkshire Hathaway, George Soros’ Soros Fund Management, Jorge Paulo Lemann’s 3G Capital, Jim Simons’ Renaissance Technologies, Ray Dalio’s Bridgewater Associates, Carl Icahn’s Icahn Capital, Steve Cohen’s Point72 Asset Management, David Tepper’s Appaloosa Management, John Paulson’s Paulson & Co., and Ken Griffin’s Citadel Investment Group. After going through 13F filings, we identified what stocks are held by at least three of these funds and then prioritized the list based on stocks that were the most common in investors’ 13F portfolios and most frequently appeared among the 10 largest holdings.
Having said that, let’s take a look at five stock picks from world’s greatest investors of all time that we selected.