23 Stock Ideas [from 9 Investing Legends]
What do the 13-F filings suggest smart investors are buying right now?
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When I was growing up in Indiana, it was basically a moral obligation that I cheer for the hometown NFL team: the Indianapolis Colts.
Now, the Colts really weren't all that good until they drafted a young man out of Tennessee named Peyton Manning. Peyton was recently inducted into the Hall of Fame and is one of the greatest, if not the greatest, quarterbacks to ever walk the planet.
Other NFL quarterback legends have included Tom Brady (winner of his 78th Super Bowl this past year), Joe Montana, Steve Young, Johnny Unitas, and many more.
While these football GOATs (greatest of all time) have been entertaining us and amazing us with their physical abilities, there really isn't a whole lot we can gain from them. It's not like you can watch some highlights of Steve Young and go out and throw a lefty hail mary 50 yards.
Investing, on the other hand, is not like that. You can actually benefit from what Warren Buffett is buying. You can, in essence, 'copy' their moves; at minimum, you can use their buys as a screener to look deeper into a company for your own portfolio.
So, here is a list of 9 investing GOATs that I personally follow and 23 stocks that they either bought as a new position or added to this past quarter in a substantial-ish amount – at least, what I deemed to be substantial. (* denotes adding to an existing position)
Our first investor is Tom Gayner. He has been the head of Markel Gayner Asset Management (Markel’s investment division) since 1990. He has outperformed the S&P 500 by 6.8% annually over 15 years. 1
Gayner follows a 4 point strategy. He looks for:
Companies with high Return on Invested Capital (ROIC)
Management with integrity and talent
Ability to compound into the future
Trading at a fair price
This last quarter (Q2 2021), Tom made the following new purchases:
Texas Pacific Land (TPL)
MACOM Technology (MTSI)
Marvell Technology (MRVL)
Brookfield Asset Management (BAMR)
He’s known as the “European Warren Buffett” and for good reason. His fund, Fundsmith, has returned 540% since inception vs. 256% for the index.2
Smith’s strategy is a simple one:
Buy great companies
Don’t pay too much
Do nothing (He says the ‘doing nothing' is the hardest part.)
Terry also has some great YouTube content, which I would strongly recommend that you check out. :)
Smith only made two purchases this last quarter:
WNS (Holdings) Ltd ADR
*Church & Dwight Co, Inc. (CHD)
Seth manages $20 billion Baupost Group, LLC. He has averaged returns of nearly 20% annually since their inception.3.
His book “Margin of Safety” sells for $1,000 on eBay. I found it for $700, but clearly his knowledge is valuable.
Seth made 7 purchases or additions that I thought were meaningful:
Shaw Communications (SJR)
*Micron Technology (MU)
Reinvent Technology Partners (RTPY)
Garrett Motion (GTX)
Chuck is the founder of Akre Capital Management, whose Focus Fund has beat S&P 500 by 3.53% per year since 2009.4
Chuck’s strategy is a three-legged stool focused on similar things as our investors above:
Great reinvestment opportunity/history
Akre made only one purchase:
Warren Buffett & Charlie Munger
The co-managers of Berkshire Hathaway need no introduction. A $10,000 investment in Berkshire Hathaway in 1964 grew to $240 million by end of 2017.5
There are those that might debate me on this, but I think their strategy is something like this:
Buy great businesses
Pay a fair price (or better)
Do nothing (unless the business deteriorates)
This was a relatively quiet quarter for Berkshire. They bought or added to:
He is most well known for paying $650,000 to have lunch with Warren Buffett. He manages Aquamarine Capital Management, a hedge fund. The fund’s total return since inception is 376.4%, versus 202.4% for the S&P 500.6
Guy made two purchases, adding new positions in:
Daily Journal Corp (DJCO) <– the company that Charlie Munger runs.
Monish also paid $650,000 to have lunch with Warren Buffett. He runs the hedge fund Dalal Street LLC and has done quite well. A $100,000 investment with Monish in July 1999 grew to $1.8 million by March 2018.
His strategy is a pure value investor. He lives by, “Heads I win; tails I don’t lose much.” He also buys super concentrated holdings. (He currently owns 3 positions).
Monish added the 3rd stock to his portfolio; a new position in:
There are a few other managers that I would like to highlight, but they did nothing this quarter. Those are Charlie Munger’s Daily Journal Corp (DJCO) and Li Lu with Himilaya Capital Management.
How Can I Find This Data?
If you would like to find this data for yourself, you can do that by either scrubbing through 13-F filings or by subscribing to a 13-F filing aggregator.
I use two:
GuruFocus (affiliate link)
I’m not affiliated with either party, I do pay for the services with my own money. :)
Disclaimer: This is not investment advice. This is not an offer to buy or sell any security. Do your own research. Past performance is no indicator of future results. Investing is risky. I own positions in those mentioned above and may take new positions within the next 48 hours.