Billionaire David Tepper Just Made a Once-in-a-Generation Bet on This Stock. Time to Buy?
Many people follow billionaire hedge fund managers to get investing inspiration -- and that makes sense. After all, those investors have turned their own funds into billions. The hedge funds they operate usually have high minimum investment requirements that pose an insurmountable barrier to entry for the average retail investor. But these funds have a legal obligation to report their investing activity each quarter in a Securities and Exchange Commission (SEC) filing called the 13F, which anyone can access.
There are some caveats to the approach of seeking stock picks in those reports, though. One is that many of these funds invest in hundreds or even thousands of stocks, using a combination of diversification and risk-management strategies. After all, they are called "hedge" funds. Main Street investors can't mimic the behaviors of a fund that has billions of accessible dollars. Moreover, 13F forms don't have to be filed until 45 days after the end of the quarter they cover, so any information they convey is coming at a significant time lag.
So while it wouldn't make sense to attempt to use that data to copy a hedge fund, individual investors can still see what the pros are doing and decide whether or not some of those moves are right for their own portfolios.
Source Fool.com
