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There’s one massive investment trend in particular that I’ve been following. Although few people are talking about it yet, this trend will likely create trillions in wealth in the coming years, and mint thousands of new millionaire investors who get in early.
But let’s back up a bit first…
I got into investing for better or for worse by losing a lot of money. I sold a company in the ’90s. And because I was good at one thing I thought I was a genius at everything, which is a common mistake.
And of course, I was a genius at nothing. I started investing the money I’d made and essentially lost all of it. So I figured, “Hmm, I’d better take a step back and figure out what I’m doing wrong.”
So I developed my strategy by saying, “Okay, what are the smartest investors doing?” What is Warren Buffett investing in? What is Carl Icahn investing in? What is Dan Loeb investing in? What is Stevie Cohen investing in?
Where are all these people who have been investing professionally for 30 or 40 years or longer and who are much smarter than me and have 100 researchers working for them putting their money?
There are lots of ways to find this out. You can find this out through your network of friends if you’re connected that way. You can scour SEC filings of big investors like Warren Buffett, plus his letters, his notes, things he mentions on either TV or in articles.
So I make a very big effort to follow all of these investors.
Let’s say Warren Buffett buys IBM at $100. It drops to $80, and then I buy it. It’s like Warren Buffett was my free intern. I’m buying all of his best ideas at a discount to where he bought them. You can’t get a better free intern than that.
And imagine if you had the 20 best investors out there today as your free interns. And you’re buying all of their best ideas at a discount to where they bought them.
So I decided I should model my investing approach that way. I built a website based on this idea, which eventually I sold to TheStreet.com. I’ve written thousands of articles about stocks following this idea. And many of those stocks have gone up thousands of percent. I also started a newsletter about the best ideas of the best investors.
I look for investors that tend to be longer term. They tend to not be traders. Additionally I happen to know a lot of these hedge funds. So I’m following all their filings. I don’t have any special information that’s not publically available. I’ve been keeping track of this for over 15 years. I even wrote a book, Trade like Warren Buffett, back in 2005, which details some of this.
Bringing it up to date, I’ve identified about 20 or 30 investors I’m most comfortable with. I primarily look at their new positions …read more
Source:: Daily Reckoning feed
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