In this article, we will take a look at the top 10 billionaire stocks from 10 billionaires.
If you want to become a billionaire, do what billionaires do. This is perhaps the most truthful cliché statements that hold true irrespective of the global macro environment.
Why should we pay attention to billionaires’ stock picks? The answer has always been hidden in plain sight. If you are looking at a group of billionaires who amassed their wealth and became billionaires solely by investing in the equity markets, it means they have been doing something right. And the compounding effect keeps giving them an edge in the markets which makes them stronger and better at the stock-picking game. For example, last year, when the stock market went through a bloodbath, HFRI Asset Weighted Composite Index, which gives more weighting to the larger funds, rose 0.97%. An important thing to note here is that smaller hedge funds didn’t perform well in the same period when compared to their large counter parts. The HFRI Fund Weighted Composite Index, which gives equal weight to funds of all sizes, was down 4.25% in the year. A Wall Street Journal report analyzed this performance and pointed out the reasons behind this trend. It all comes to the benefits that come with size. Top hedge funds — which are often overseen or managed by billionaires — have a lot of resources, top talent, huge funds and technologies at their disposal. This arsenal often makes them immune to the losses and market shocks that crush smaller players in the market. This is the strategy Insider Money has been talking about for years since it has proved its mettle over the past several decades.
When top money managers and billionaires share their opinion about the markets and their future, the world listens. According to a Bloomberg survey done last year, top investors predicted that stocks will post double-digit gains in 2023. The survey included 134 funds including BlackRock Inc., Goldman Sachs Asset Management and Amundi SA. But not everyone questioned in the survey had this opinion. Close to 50% of the respondents believed inflation and deep recession to be the serious threats to any market rally in 2023. However, overall, money managers were hopeful that the second half of 2023 would see solid gains.
The Bloomberg report on this survey quoted Fabiana Fedeli, the chief investment officer for equities, multi-asset and sustainability at M&G, who said:
“The outlook from here onward will be influenced by the probability, depth and longevity of recession. There are still pockets of opportunity where companies with strong fundamentals that are able to weather the storm get sold off in times of market panic.”
Earlier this year, Bloomberg reported that researchers at Goldman Sachs had predicted that 2023 will be a strong year for hedge funds because they believed the market was shifting to become micro-driven instead of macro-driven. Goldman Sachs researchers had said that hedge funds were “well-timed to take advantage” of improving conditions for stock. They based their thoughts after analyzing the data of 758 hedge funds with $2.3 trillion of gross equity positions at the start of 2023.
Lessons from the Sage Billionaire
Warren Buffett sits at the top of the billionaires list in the world of investing. Luckily, we have tons of investor letters written by the Oracle of Omaha every year addressed to the shareholders of Berkshire Hathaway. These letters provide a sneak peek into the legendary billionaire’s thought process and how he approaches wealth creation. In his 2009 letter, Buffett said the following which shows his humility, his commitment to solid investing principles and his readiness to see his mistakes and correct them:
“Long ago, Charlie laid out his strongest ambition: “All I want to know is where I’m going to die, so I’ll never go there.” That bit of wisdom was inspired by Jacobi, the great Prussian mathematician, who counseled “Invert, always invert” as an aid to solving difficult problems. (I can report as well that this inversion approach works on a less lofty level: Sing a country song in reverse, and you will quickly recover your car, house and wife.) Here are a few examples of how we apply Charlie’s thinking at Berkshire:
Charlie and I avoid businesses whose futures we can’t evaluate, no matter how exciting their products may be. In the past, it required no brilliance for people to foresee the fabulous growth that awaited such industries as autos (in 1910), aircraft (in 1930) and television sets (in 1950). But the future then also included competitive dynamics that would decimate almost all of the companies entering those industries. Even the survivors tended to come away bleeding.
Just because Charlie and I can clearly see dramatic growth ahead for an industry does not mean we can judge what its profit margins and returns on capital will be as a host of competitors battle for supremacy. At Berkshire we will stick with businesses whose profit picture for decades to come seems reasonably predictable. Even then, we will make plenty of mistakes.
We will never become dependent on the kindness of strangers. Too-big-to-fail is not a fallback position at Berkshire. Instead, we will always arrange our affairs so that any requirements for cash we may conceivably have will be dwarfed by our own liquidity. Moreover, that liquidity will be constantly refreshed by a gusher of earnings from our many and diverse businesses.”
Our Methodology
For this article, we used Insider Monkey’s database of billionaire hedge fund managers and first chose 10 billionaires who founded, are running/overseeing top hedge funds in the US. We then looked at each fund’s stock holdings data for the first quarter of 2023 and picked each fund’s top stock pick. The list is ranked in ascending order of the total worth of billionaires discussed in the article. Some notable stocks in the list include Apple Inc. (NASDAQ:AAPL), The Procter & Gamble Company and Meta Platforms, Inc. (NASDAQ:META).
Top 10 Billionaire Stocks From 10 Billionaires
10. Bausch Health Companies (NYSE:BHC)
Billionaire: John Paulson (Worth $3 billion)
Billionaire John Paulson rose to fame after he successfully bet against the US subprime mortgage lending market and made $4 billion amid the financial crisis that started in 2007. He founded Paulson & Co 1994. As of the end of the first quarter of 2023, his hedge fund’s top holding is Canadian-based Bausch Health Companies (NYSE:BHC). Bausch Health Companies is up about 32% year to date through May 20.
As of the end of the fourth quarter of 2022, 41 hedge funds had stakes in Bausch Health Companies. The total value of these stakes was $885 million. Paulson has a $214 million stake in Bausch Health Companies.
9. Microsoft Corporation (NASDAQ:MSFT)
Billionaire: Ken Fisher (Worth $6.2 billion)
Billionaire Ken Fisher is one of those billionaires who are generous enough to share their wisdom with the public. These days he regularly shares his thoughts on his YouTube channel. He recently reiterated his “pessimism of disbelief” theory in a video and painted a positive and hopeful picture of the markets.
While Apple Inc. (NASDAQ:AAPL) is the top holding of Fisher, we picked Microsoft Corporation (NASDAQ:MSFT), Fisher’s second most favorite stock pick, for this article since Apple Inc. is also the favorite stock pick of another billionaire (Warren Buffett) and we don’t want to have duplicates.
Fisher’s hedge fund has a $7 billion stake in Microsoft Corporation as of the end of March.
Microsoft Corporation is also the most popular stock among the 943 hedge funds tracked by Insider Monkey as of the end of the first quarter. Other famous stocks in our hedge fund database include Apple Inc., The Procter & Gamble Company and Meta Platforms, Inc..
Alger Spectra Fund made the following comment about Microsoft Corporation in its Q1 2023 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is a beneficiary of corporate America’s transformative digitization. Microsoft’s CEO expects technology spending as a percent of Gross Domestic Product (GDP) to jump from about 5% now to 10% in 10 years and that Microsoft will continue to capture market share within the technology sector. The company operates through three segments: Productivity and Business Processes (Office. LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services. Azure, and Enterprise Services), and More Personal Computing (Windows Devices, Gaming, and Search). While the company reported decent fiscal second quarter results, their investment in OpenAl’s ChatGPT captured the attention of investors. contributing to positive performance. Throughout the quarter. Microsoft surprised investors with continual rollouts of new Al capabilities across the company’s portfolio (e.g., Bing, GitHub. Teams, Office 365). Furthermore, the company announced Microsoft 365 Copilot, which leverages GPT-4, a large language model, combined with the Microsoft Graph of data to provide Al virtual assistance. We believe Microsoft’s investment in OpenAl provides a first-mover advantage in the Al transformer model space. Despite challenges in the early days of Al-powered applications, the pace of Al innovation is faster than any other enterprise technology previously observed, in our view.”
8. Coupang, Inc. (NYSE:CPNG)
Billionaire: Stanley Druckenmiller (Worth $6.4 billion)
Stanley Druckenmiller is one of the most respected billionaires out there and when he talks the world listens. Druckenmiller recently said at the 2023 Sohn Investment Conference that he’s looking at the “biggest and probably the broadest asset bubble — forget that I’ve ever seen, but that I’ve ever studied.”
However, Druckenmiller said there would be “unbelievable opportunities” in the near future even if we see a hard landing.
“And I don’t want to miss those opportunities by blowing my money now and having some 20% or 30% loss where my head is all screwed up when those opportunities present themselves.”
Druckenmiller’s hedge fund Duquesne Capital’s top stock holding is South Korean e-commerce company Coupang, Inc. (NYSE:CPNG), in which the fund owns a $302 million stake.
7. Horizon Therapeutics Public Limited Company (NASDAQ:HZNP)
Billionaire: George Soros (Worth $6.7 billion)
Hungarian-American billionaire George Soros, who is also known as the man who “broke the Bank of England,” restructured his hedge fund as family office in 2011 and retired from the world of investing in 2015 to focus more on political philanthropy. But his firm Soros Fund Management still discloses its holdings and taking a look at the fund’s data shows that Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) was its top stock pick as of the end of March 2023. The fund owns a $359 million stake in Horizon Therapeutics Public Limited Company.
Aristotle Atlantic Focus Growth Strategy made the following comment about Horizon Therapeutics Public Limited Company in its Q4 2022 investor letter:
“Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) was a relative contributor, as its stock price was up on news that Amgen was acquiring the company for $116.50 per share, a roughly 36% premium to the pre-deal speculation price.
6. CVR Energy, Inc. (NYSE:CVI)
Billionaire: Carl Icahn (Worth $10 billion)
Carl Icahn is one of the most famous activists hedge fund managers and billionaires in the world. The billionaire’s hedge fund Icahn Capital’s portfolio shows that Icahn Enterprises was its biggest stock holding. But since Icahn is the owner of the conglomerate, it’s better to take a look at the next biggest holding of the fund. It’s Texas-based petroleum refining company CVR Energy, Inc. (NYSE:CVI). Icahn’s hedge fund owns a $2.3 billion stake in CVR Energy, Inc..
Like Apple Inc., The Procter & Gamble Company and Meta Platforms, Inc., CVR is a favorite stock pick of several famous hedge funds.
5. Meta Platforms, Inc. (NASDAQ:META)
Billionaire: Steve Cohen (Worth $17.5 billion)
Meta Platforms, Inc. is the favorite stock pick of New York Mets owner Steve Cohen. The billionaire via his hedge fund owns a whopping $1.4 billion stake in the social media company.
Meta Platforms, Inc. shares are in the spotlight after Bloomberg reported that the company’s unit Instagram is working on a Twitter rival app. Instagram reportedly made the app, which is text-based, available to some creators a month ago and it could be launched as soon as June.
A total of 194 hedge funds tracked by Insider Monkey had stakes in Meta Platforms, Inc. at the end of the fourth quarter of 2023.
Baron Opportunity Fund made the following comment about Meta Platforms, Inc. in its Q1 2023 investor letter:
“We continued rebuilding our position of Meta Platforms, Inc. (NASDAQ:META), the world’s largest social network, this quarter. We believe Meta is competitively well positioned to utilize its leadership in mobile advertising and expand further with the generative AI shift, especially given its massive user base, substantial technological scale, and innovative culture. Core engagement has been strong at Meta, especially with the success of Instagram Reels, which is regaining share from TikTok. Across its platforms, Meta has 3.7 billion monthly active users. A U.S. TikTok ban would further materially benefit Meta. In terms of improving monetization, Meta has developed more effective ad targeting in the last few months with its Advantage+ product. Longer term, Meta has invested in generative AI for years and has among the world’s best and largest datasets and distribution. We believe generative AI can materially help Meta improve existing products (e.g., instantly generate personalized creative ads) and expand into new areas (e.g., through WhatsApp and Messenger chats). On the profitability front, Meta’s management is serious about cost discipline (laying off approximately 21,000 workers) and prioritizing a more efficient environment, led in earnest by CEO Mark Zuckerberg. Valuation remains relatively attractive, especially as we expect double-digit earnings per share growth, and additional growth options remain.”
4. Alphabet Inc. (NASDAQ:GOOG)
Billionaire: David Tepper (Worth $18.5 billion)
David Tepper of Appaloosa Management owns Carolina Panthers of the National Football League and Charlotte FC in Major League Soccer. His net worth stands at over $18 billion, according to Forbes. Appaloosa’s biggest stock holding as of the end of the third quarter is Alphabet Inc. (NASDAQ:GOOG). The hedge fund upped its stake in Alphabet Inc. by 5% in the first quarter, ending the period with a stake worth $219 million.
Some good news finally came for Alphabet Inc. after The Wall Street Journal reported that Samsung has suspended discussions regarding a possible switch from Google search to Bing in its devices. Such a shift would have been devastating for Alphabet Inc. since billions of people using Android devices made by Samsung initiate their web searches using Google.
Baron Opportunity Fund made the following comment about Alphabet Inc. in its Q1 2023 investor letter:
“As we did last quarter, we continued to decrease our weighting in Alphabet Inc. (NASDAQ:GOOG) because, as stated earlier, we believe ChatGPT and/or similar AI-based services present a hard-to-measure risk to Google’s virtual search monopoly.”
3. The Procter & Gamble Company (NYSE:PG)
Billionaire: Ray Dalio (Worth $19.1 billion)
Ray Dalio founded his hedge fund Bridgewater Associates in 1975. Today, it’s one of the top hedge funds in the world, with over $16 billion in managed securities as of March 2023.
Billionaire Ray Dalio is extremely vocal about the latest market developments and his posts on LinkedIn are read by a huge audience.
Bridgewater’s top stock holding is The Procter & Gamble Company, in which the fund owns a $735 million stake.
2. Novo Nordisk A/S (NYSE:NVO)
Billionaire: Jim Simons (Worth $28.1 billion)
Novo Nordisk A/S (NYSE:NVO) is the top holding of Renaissance Technologies, the hedge fund founded by quant genius Jim Simons. Simons’ hedge fund owns a $1.7 billion stake in Novo Nordisk A/S.
Overall, 41 hedge funds tracked by Insider Monkey had stakes in the Novo Nordisk A/S. The total value of these stakes at the end of March was $3.8 billion.
1. Apple Inc. (NASDAQ:AAPL)
Billionaire: Warren Buffett (Worth $116 billion)
Warren Buffett of Berkshire Hathaway is perhaps the most looked up to billionaires in the world of finance since his ever-green investing principles and consist outperformance has earned him a reputation that is unmatched in the history of financial markets. Warren Buffett’s favorite stock as of the end of the first quarter of 2023 is Apple Inc., in which Berkshire has a whopping $151 billion stake.
Alger Spectra Fund made the following comment about Apple Inc. in its Q1 2023 investor letter:
“Apple Inc. (NASDAQ:AAPL) is a leading technology provider in telecommunications, computing, and services. Apple’s iOS operating system is the company’s unique intellectual property and competitive strength. This software drives particularly tight engagement with consumers and enterprises, which is fostering the growing purchase of high margin services like music, apps, and Apple Pay. While iPhone sales were down year-over-year (YoY). services revenues grew 7% YoY which was slightly above analyst estimates. Company earnings were also better-than-anticipated due to lower input costs, such as memory chips and cost control initiatives. Aside from production disruptions, negative sentiment had also weighed on shares as investors questioned how an economic slowdown would affect consumer demand for Apple products in 2023. However, management projected an acceleration in earnings for the fiscal first quarter, where they noted that iPhone and services growth should remain strong, along with encouraging impacts around product mix, lower input costs, and continued cost controls.”
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This article is originally published at Insider Monkey.
