How To Invest Like A Billionaire
Its pretty simple. You buy whatever stock they’re buying when they’re buying it!
Billionaires aren’t usually in the habit of broadcasting what they buy and sell but they usually do buy in large noticeable quantities. The SEC has some stringent guidelines on disclosure of purchases and sales.
According to SuperCash: The New Hedge Fund Capitalism
If there’s a billionaire you are interested in following, you can use various services to keep track of their filings, such as www.sec.gov and www.edgar-online.com. Specifically, you want to look for these types of filings:If you found this post helpful, consider donating to my coffee fund!* Form 4: This details if they are making a significant change to their holdings. If they own more than 5 percent of a company and they sell shares, they must file a Form 4 within 10 days.
* SC-13D: A 13D schedule needs to be filed whenever they hold more than 5 percent of a company or if they go from owning more than 5 percent to less than 5 percent. This form has to be filed within 10 days of the “acquisition event” that took the filer above the 5 percent ownership level in a company.
* 13F-HR: This is filed to list all of the holdings of an institution that needs to file within 45 days of the close of a quarter. For instance, Michael Dell is not an institution but he funnels all of his money through a family office called MSD Capital, which does have to file the 13F-HR filing.
Let’s take a look at some of the investors I like to follow.
MARK CUBAN
Even successful dot-com cowboys diversify. Perhaps they know better than anyone the need to explore unpopular investment options. Cuban, perhaps most famous for his impeccable timing in selling his company, Broadcast.com, to Yahoo! and then selling his Yahoo! shares at the very peak when they were worth upwards of $3 billion, recently posted his stock positions, both long and short, on his blog, www.blogmaverick.com.
His long positions include Lion’s Gate Entertainment (his comment: “The only indie film library available, willing to leverage new media for revenue”), Rentrak (”Only independent source advertisers can use for tracking Video on Demand and Online Video on Demand”), and domain name registrar Tucows (”Good management, low PE, sells to growing market segment”). His shorts include Imergent, which makes software to help people build e-commerce sites (”I don’t like companies that sell products that consumers shouldn’t buy. It catches up at some point”) and Interoil, an oil and gas company (”Appears to have cash issues”).
BILL GATES
Even billionaires occasionally need to diversify their portfolios, and Bill Gates’ massive $40 billion investment in Microsoft is a case in point. Through his investment vehicle, Cascade Investments, Bill Gates buys the stocks of traditional brick and mortar companies. For instance, he owns 2.4 million shares of manufacturing, plastics, electric, health-care company Otter Tail. While the stock hasn’t gone up much in recent years, it is currently paying a very steady 4.5 percent dividend and is trading at a low double-digit P/E, providing a decent cushion for Gates and his heirs.
Other stocks Gates owns include 5.1 million shares of Pan American Silver, one of the largest public silver mines; 441,000 shares of Four Seasons Hotels; and 18 million shares of trash collector Republic Services. The rest of Gates’ holdings can be found in the SEC filings for Cascade Investments.
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