Wouldn’t it be nice to be little bird on the shoulder of the world’s billionaires last year and find out which investments they were hot on as the recent recession proceeded? As luck would have it, required SEC filings force billionaire money managers to reveal exactly where they’re putting their money. Most recent results are for Q4 of 2010. Mr. Buffett (Warren, that is, not Jimmy) and Mr. Soros, come out wherever you are…
Overall, last quarter’s billionaire sentiment was to get into the financial sector and out of technology, which is a bit of a buzzkill for all the young traders out there itching to earn their bones by being the next prescient wunderkind to get out in front of the next great tech wreck.
Financials? Boring! Sorry to have to break the bad news to you but billionaires were literally flocking to financial companies like Bank of America, Wells Fargo, and Citigroup. Both Warren Buffet’s Berkshire Hathaway group and John Paulson’s hedge fund hit these stocks in a big way. Meanwhile, currency billionaire, George Soros, decided to up his stake in Delta Airlines to 14.7 million shares, which works out to about $157 million.
While we would not be so silly as to suggest you mindlessly model your portfolio after anyone, you could do worse than to at least follow what the Big Boys are doing with their money, and try to understand why. It’s a pretty safe to assume they aren’t randomly dumping huge piles of cash on certain stocks just because they like the sound of the name. With Buffett, it is always and forevermore about fundamentals. You can bet he sees great fundamentals with the financials (probably that
they are artificially undervalued in the aftermath of the foreclosure mess), which can be a great reason to buy.
In general, the billionaires are staying away from technology companies, though some can’t help buying shares of Apple. The overall feeling is that the sector is overvalued and ripe for a bubble which will eventually pop.
The Young Wealth Team
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