Breakout

Follow the Whales and Buy Their Stocks at a Discount! Says Altucher

Jeff Macke
Breakout

Technically speaking, a Form 13-F is an SEC document that managers who control more than $100,000,000 must file within the end of each quarter. To James Altucher of Formula Capital, the regulatory requirement transforms the titans of finance into your personal staff every 90 days. Not only that but sometimes you get them for cheap.

"George Soros has his team of a thousand researchers, or whatever he has got, and he decided to buy J.P. Morgan (JPM) in the 40's," says Altucher gleefully. "I get that for free!" Even if we're talking about data that's more than a month-and-a-half-old and, in the case of Mr. Soros, the position has declined in value, Altucher still thinks investors are getting a deal.

"What did Warren Buffett do?" Altucher asks. "He added to IBM (IBM). He added to Wal-Mart (WMT). He added Wells Fargo (WFC). He bought GM, and he bought Viacom (VIA)."

Berkshire Hathaway (BRK) was long 10 million shares of General Motors (GM) as of the end of last March. As a result, Altucher says, "Warren Buffett works for me. He's like the little kid free intern that's happy to give me stock picks at higher prices! I'm a discount to what the great Warren Buffett paid!"

The fact that Buffett would seem to be down on the investment makes it all the better. "Now I'm getting a deal off Warren Buffett! Why wouldn't I take it?"

The real delight for Altucher and other investors are the filings made by activist "whales"—super-sized portfolio managers who spout off their demands from companies and boards. The most famous among these whales being David Einhorn, Dan Loeb, and, of course, Carl Icahn.

Altucher ticks through these well-known names as his favorite filers, but naming names almost defeats the point. The great thing about the 13-Fs are that they level the playing field entirely, if only on a delayed basis. 45 days after the end of every quarter, the likes of George Soros and Warren Buffett lob you stock picks. You don't have to take them but you'd be a fool not to listen.

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