Nicholas Vardy has a newer low-end advisory called Smart Money Masters, and it looks like he’s aiming to be one of the “whale watchers” who run 13F-following services — the folks who watch the big buys by Warren Buffett and a couple dozen of the big hedge funds and institutional investors, and try to emulate those successful investors. He’s got an ad or two running to recruit charter subscribers at $49/year (which he says is an 80% discount off the “list price” of $249… though who knows if anyone will every actually pay that), so we’re taking a look at those ads today to see what investments he’s teasing as he dangles the bait.
Following big and successful investors is not a bad idea, of course — and there are whole industries set up to follow the big guys, which is why 13F season tends to get so much attention six weeks after the end of each quarter.
If you’re unfamiliar with that, 13F filings are the portfolio reports that institutional-size investors (anyone with a portfolio over $100 million) have to make to the SEC each quarter… they’re public, and include any long US equity positions, so they give great insight into the portfolios of large and successful investors (they don’t cover debt or options or short positions, so they’re incomplete… but still useful).
These filings are due six weeks after the end of each quarter, so the last wave of them hit in mid-February. You can search for filings at the SEC if you want to see what your favorite investor owned last quarter (Berkshire’s latest 13F info table is here, for example), but there are also lots of free sources that make the information much more accessible and track the ups and downs and portfolio changes (here’s how Insider Monkey shows Buffett’s portfolio, for example, and here’s gurufocus’ version — those are two of the higher-profile free services, though both require free accounts to get the full picture).
It’s always interesting to see what big institutional investors are buying, and sometimes we can find great ideas that way — though it’s certainly no guarantee. Even if you focus on those who generally have long-term positions in stocks (the 13F’s from active traders and “quants” are almost worthless, since the data is at best six weeks old and their portfolios are probably far different by the time you see the filing), and even if you’re able to buy at prices near what that hedge fund or investor paid (Buffett could have bought a stock back in October and we wouldn’t hear about it in a 13F until mid-February, so that’s a big assumption — they report the quarter-end value, but not their cost or the price they paid), most hedge funds and institutional portfolios have far different restrictions and priorities than do little individual investors like ourselves. Buffett himself, for example, routinely notes that he would expect to earn dramatically