Track Buffett And Big Money With This TradeSmith Strategy
Although he stepped down as CEO of Berkshire Hathaway last year, legendary investor Warren Buffett is still active in guiding his company’s investment portfolio. And given the performance of the “Oracle of Omaha” over the last 60 years – with annualized gains of nearly 20% a year across those decades – his moves are worth paying close attention to.
Now, throughout his illustrious career, Buffett was considered a value investor. A bargain hunter who bought stocks below intrinsic value. That’s why his latest moves raised a few eyebrows this week.
According to Berkshire Hathaway’s latest 13-F filings with the SEC, disclosed earlier this week, Buffett led the company to make a huge increase in its holdings of “Magnificent 7” stock Alphabet (GOOGL).
Berkshire boosted its stake in Google parent Alphabet by a whopping 83% last quarter, buying $17 billion in additional GOOGL shares. That increases Berkshire’s total holdings in the AI cloud-computing giant up to $37.8 billion – making the company its third-largest holding.
In the past, Buffett has said that Technology is a sector he didn’t understand – claiming that it was outside his comfort zone. But today, tech stocks account for two of Berkshire’s top three positions, with Apple (AAPL) being its top holding, with the company’s positions valued at $66 billion.
Apparently, the investment in GOOGL was Buffett’s call. To make up for the “mistake” of not investing in it earlier. Don’t call the Oracle stubborn, folks!
History shows that it pays to keep tabs on the trades made by billionaire investors like Buffett. And here at TradeSmith, we follow the data wherever it goes – which is why we built our exclusive Billionaires Club tracker to watch these trades closely.
We feature successful billionaires like Warren Buffett, Bill Ackman, and George Soros on the list, plus dozens of other big money investors with proven track records over many years of trading.
And we performed extensive backtesting on the Billionaires Club, filtering stocks owned by these successful investors through our proprietary tools to find the best of the best. And the results were outstanding, as you can see below:
By ranking stocks based on recent entry signals, the average Volatility Quotient (VQ), and the number of Billionaires Club members holding the same stocks, we found that a strategy of following the top buys of this exclusive group outperformed the S&P 500 by nearly 10 times over.
That’s why I always keep a watchful eye on what the billionaires are up to. And you can too.
How to Keep Tabs on the Billionaires Club
Our Billionaires Club closely tracks about 30 “smart money” investors in addition to Buffett. These legends have made plenty of money, not just for themselves, but for the savvy investors who were smart enough to invest alongside them.
We track their publicly available 13-F filings from these famous investors and their funds. And we’ve recreated their portfolios so that you can follow their moves each quarter.
The easiest way to access the Billionaires Club is to click the Invest tab from your TradeSmith Finance Home Page,then select the Billionaires Club tab in the sub menu shown below:
*Please Note: This feature is available to Ideas by TradeSmith Elite, Trade360, TradeSmith Essentials, and TradeSmith Platinum subscribers. If you don’t see this in your TradeSmith Finance dashboard, and would like to, please call our dedicated Customer Care team at 866-220-1107 to find out how to get access.
Once on the Billionaires Club page, you can look up your favorite Billionaires by name via the drop-down window. Once you’ve made your choice, our system scans their recently open or closed positions to see which stocks they’re buying and selling.
Here’s an example, in the form of Buffett’s top holdings:
These wizards of Wall Street have done the heavy lifting for us, in terms of stock research and position selection. By using the Billionaires Club to follow in their footsteps, so to speak, we’re riding on their coattails – and on our way to a higher chance of profit.
You can also use our popular TradeSmith Screener tool to find stocks that multiple Billionaires Club members hold. Instead of analyzing each billionaire’s holdings one by one, you can scan the portfolios of all the Billionaires Club elite at the same time.
Follow The Big Money With A Billionaires Screener!
To access our powerful Screener tool, start by logging in to your TradeSmith Finance platform. Once you’re on the Home Page, navigate to Invest in the top menu and select the Screener tab.
Now, here’s how to set up a simple Billionaires screener:
First, click on the blue +Add Filters button, as shown above – then select TradeSmith Strategies from the list of TradeSmith Proprietary Metrics. Then, open the filter dropdown menu and check the box for Best of the Billionaires under Ideas Lab.
Running a screen with this filter selection will give you a list of all stocks owned by members of our Billionaire’s Club.
When I ran this screen yesterday, I got over 100 results. The top 10 sorted by our Short-Term (ST) Health Indicator are shown below:
To narrow down the list from here, you can always add additional filters of your choosing.
For example, try adding additional TradeSmith filters like Health, Business Quality Score or Free Cash Flow Yield. Warren Buffett always favored quality stocks that generate lots of cash, after all.
Or consider including a few fundamental filters like P/E Ratio or Dividend Yield to narrow your results further. The sky’s the limit!
Mike Burnick’s Bottom Line: Our TradeSmith Billionaires Club page is a great source of potential investment ideas. You can track of the stocks favored by successful investors like Warren Buffett and dozens of other big money investors whose movements we track.
Because these investors didn’t enter this club by accident. Like Buffett, each member has spent decades developing their winning market strategies – and they’ve built impressive track records in the process.
Good investing,
Mike Burnick
Senior Analyst, TradeSmith
P.S. The TradeSmith Billionaires Club is one of the many ways our tools allow you to think smarter, not harder when choosing your own stocks. By following the movements of the market’s most successful investors, we’re able to piggyback off their extensive research and pick up stocks that have already proven themselves as high-value investments with high profit potential.
But there are some trades that don’t show up on the SEC filings we use to follow the Billionaires Club.
Every day, hedge funds and big Wall Street trading firms use options to place massive bets on where stocks will move next – hidden and buried beneath the millions of data points and price updates that make up your average trading day.
These are leveraged bets placed by some of the biggest players in the market: the smart money, the insiders, the major institutional investors. Major market players with connections… and with access to critical information that allows them to make good bets before anyone else can.
That’s just how critical information moves in the market: by the time key information becomes public and you hear about it, it’s often too late to make a profitable trade.
Stocks have already moved… and the big money has already moved their winnings to the next big trade.
It’s frustrating, and it feels deeply unfair.
That’s what drove our team to build a new tool – to uncover the hidden signals left behind by these major options trades and turn them into actionable ideas for traders like you.
We call it Smart Money Edge.
Instead of guessing where a stock is headed next, Smart Money Edge is an AI tool that gives you a chance to see how the Wall Street pros and the really-in-the-knows are placing their bets behind closed doors.
It finds the invisible patterns left behind when these players make their bets, then follows those patterns and crunches the numbers to select the best trades to follow along with that activity – allowing you to trade alongside the Wall Street pros who are quietly putting big money into these leveraged bets.
And based on our research and our extensive backtesting, Smart Money Edge works: This is a system that can deliver big wins and deliver them with consistency. We found that a whopping 80% of the stocks flagged by Smart Money Edge moved higher within a month.
Earlier today, we debuted Smart Money Edge to the public, to give every investor a chance to make the same profits as the market’s biggest insiders.
Click here to find out more about this AI tool – and how you can start using it today.