Billionaire Ken Fisher is the CEO of Fisher Asset Management, a fund with around $50.05 billion in equities as of the end of March. Mr. Fisher has a net worth of around $2.90 billion, which makes him one of the richest self-made billionaires in the world according to Forbes, and the 236th billionaire in the US. Moreover, the founder and CEO of Fisher Asset Management is the author of several books, including four New York Times bestsellers and is one of the longest running columnists in Forbes’ history, authoring the “Portfolio Strategy” column for more than 30 years.
Mr. Fisher’s impressive biography makes him one of the most interesting investors to follow. The billionaire prefers to hold a diversified portfolio and he likes to invest in big names and companies that have fat gross margins. Fisher Asset Management’s latest 13F shows a strong focus on the Finance, Technology and Healthcare sectors and its largest holdings are represented by some of the largest and best performing companies from these sectors, such as Apple Inc. (NASDAQ:AAPL), Pfizer Inc. (NYSE:PFE), and Wells Fargo & Co (NYSE:WFC).
Fisher’s 422 long positions in companies with a market cap of over $1.0 billion had modest weighted average returns of 1.47% during the first three months of 2015. However, the main question is whether a smaller investor can benefit by imitating Mr. Fisher’s stock picks. The short answer is yes. Even though the 13F filings of large investors are published with a significant delay, it does not offset opportunities to invest in the same stocks. The key is to focus on their small-cap picks, as we determined through a series of backtests for the period between 1999 and 2012. The backtests showed that a portfolio of the 15 most popular small-cap stocks among several hundred investors managed to beat the market by an average of nearly a percentage point per month. This system has showed the same strong returns after going live, having gained around 137% in the last 2.5 years, outperforming the S&P 500 ETF (SPY) by some 82 percentage points (read more details here).
Let’s now take a closer look at Mr. Fisher’s largest holdings as of the end of March, since they are represented by companies that the investor is fond of and have been among his long-term investments. On the first spot is Apple, which owns one of the most profitable businesses ever, in which Fisher Asset Management disclosed a $1.35 billion position that contains 10.81 million shares. It’s not surprising that Mr. Fisher likes Apple Inc. (NASDAQ:AAPL) and that it represents his largest position. Apple Inc. (NASDAQ:AAPL) is the largest in terms of market capitalization and its latest financial results (for the second quarter of fiscal 2015) came in well ahead of estimates and above the previous-year results, with revenue of $58 billion and EPS of $2.33, versus $45.6 billion and $1.66 a year earlier. Apple Inc. (NASDAQ:AAPL) also posted a gross margin of 40.80%, up from 39.3% for the same period a year ago. Another fund manager that is bullish on Apple is David Einhorn of Greenlight Capital. Here is what Greenlight said in its latest letter to investors: