Best Stock Picking Hedge Funds in August

What are the best stock picking hedge funds in August? We don’t get to see hedge funds’ actual portfolios but we get to see their stock picks in most U.S. stocks. This isn’t actually that bad because most individual investors only consider investing in these stocks. They don’t want to gamble with options or illiquid foreign stocks or private investments anyway. Insider Monkey tries to determine which hedge funds have the best stock picking ability in the past. Then we use this information to determine the best stock picks of best hedge funds. We believe investors have a more than 50% shot at beating the index funds over the long-term by imitating best hedge funds’ best stock picks.

Part of this exercise we calculated the weighted-average returns of 300+ hedge funds we are tracking for the month of August. We excluded their options and other non-stock positions. So, this analysis is based on hedge funds’ stock positions at the end of June that are reported in their latest 13F filings (Their portfolios might have changed since then but since they don’t report those changes publicly we can’t really know about all the transactions hedge funds made).We also limited this analysis to the 3000 stocks that are in the Russell 3000 index. Most of the dollars invested by ordinary investors go to these stocks.

Warren Buffett

The hedge fund with the best stock picks was Trey Reik’s Bristol Investment Partners. Why? Because Reik invests in mining stocks, especially the gold miners. Peter Palmedo’s Sun Valley Gold has the second place for the same reason. The best performing hedge fund manager with a large diversified portfolio is actually Carl Icahn. Carl Icahn’s long stock picks had an average return of 1.9% during August. His success was mainly due to the large increase in Motorola Mobility (MMI). Warren Buffett‘s $52 Billion portfolio suffered only a 0.8% decline. His defensive stock picks help him outperform the market in bear markets.

Here are the rest of the best stock picking hedge funds in August (all of these funds outperformed the SPY in August):