Super Investors Are Buying Now

four times a year we get the opportunity to look at what the best investors in the world are doing they're called super investors they're called super investors because they manage a lot of money so much money that the government requires them to reveal their portfolios their buys and sells every single quarter and that just happened for these super investors now there's around 70 super investors but out of those 70 I've gone through and handpicked what I believe are the best 15 super investors so I've really narrowed this down to the best of the best what I believe are the best investors in the world to learn from this is going to be a very interesting episode we're going to go through nine super investors and this is actually going to be broken up into two parts for example this episode today this video we're going to go over Warren Buffett Bill Amman Terry Smith Chuck aey polling Capital Management which is a great firm you have Pat dorsy Christopher bloomstrand Chris hone and Michael bur nine super investors today so again this is going to be a two-part series you're watching part one today let's go ahead and start off with Buffett so let's go ahead and jump into Berkshire Hathaway's portfolio this is all 41 positions of their public Equity Investments now keep in mind that Berkshire also owns a lot of companies outright that are not being publicly traded so this doesn't include the dozens and dozens of companies like Sees Candy that Berkshire owns 100% of so this is really only a portion of Berkshire hathway which shows you how big this company is it's massive company Burkshire is now like a massive ETF more than an individual company but we're going to look at his most recent trades in his Equity portfolio of course we had the breaking news we know that Berkshire Finally Revealed what company they've been secretly buying and it's chub LTD an insurance company I'll go over this one in just a moment but I first want to start off with apple we know that Apple was a core position for Berkshire he called it a pillar of the company and it raced up to roughly 50% of their Equity portfolio that was a lot even for Buffett he doesn't like having that much into one company I know he says that diversification is is uh you know for protecting for ignorance but even in the case of Buffett I think he's reluctant to have over 50% of the portfolio in one single company even if it's as good as Apple so he did something that I kind of expected him to do he trimmed apple he trimmed by 13% and this was around 6% of the overall public portfolio he was asked about this why did he trim it and he didn't really give a straightforward answer he basically said that part of it was to pay for taxes and that he reiterated he's still very bullish on Apple but I want to try to fill in the blanks I want to try to go past what he said here Buffett's one to never try to talk down a stock he doesn't really want to crush the stock price of a company that he owns especially a very large position so whether it's Sees Candy cocacola uh any company that he's invested in he always talks positively about them even if I believe internally he's feeling a little bit more cautious or a little bit more guarded about the current value proposition in the case of apple he didn't really say anything negative about the company he still says it's a a great company one of the best in the world but I think there's more challenges in Buffett's mind first of all apple is is growing slower a lot slower than when he first bought the company Apple's at a much higher valuation than when he first bought the company Apple faces more regulatory risk than when he first bought the company so you have apple his largest position that is now more expensive it's at a a greater valuation it's growing slower and it has greater regulatory risk that's not the same equation as when he bought it as a reminder of when he bought Apple the entire position was purchased between 2016 in 2017 so he bought all of the company at these prices down here if we look at the specific price that was around $28 to $42 per share this is when he was buying Apple 40 bucks a share $35 a share it was Dirt Cheap it traded for a 16p ratio he built a massive $30 billion stake in the company right there and then he just held it during this time period he held around 1 billion shares of the company so he had a massive stake in the company and ever since then since those very first purchases at $30 or $40 per share he's basically sold the company he trimmed it a little bit in q1 of 2020 and then he held it a little bit more he bought a tiny fragment of it in Q3 of 2022 and then recently he dumped 133% and I do believe him when he says that he's still bullish on the fundamentals of Apple but the simple truth is the equation has changed over time so I agree with this trim and apple and I've done the same thing now if we move on we have some other small trades here nothing that I think is notable just slight trims and slight additions to some different oil companies the biggest news that came out of this filing was that he bought a new company which is chub LTD ticker symbol CB and he's made this into a 2% position now 2% sounds small and it is in the grand scheme of things but in Buffett's portfolio that's actually a pretty decent buy this is company like number 10 in the portfolio out of 41 positions so this bumped right up to the top percentile of his portfolio let's go ahead and take a look at what chub LTD is we can bring up CB here on qual trim and if you don't know this website is something I've built it's included as part of the patreon we bring up chub limited hair it's up 4% on the day qualum is telling us this is because of Burkshire hathway buying it which is the truth he buys a company when it gets released the stock price will go up a little bit you can read the long-term description here of chub but just to summarize it it's an insurance company it's an insurance company that's similar to other insurance companies and you know Warren Buffett's history with insurance Geico a major position of his that he's made a fortune with that's been one of his best positions ever of course he loves insurance companies so it makes sense that he wants to buy more insurance companies now if we look at the valuation of this company insurance companies have to be valued differently than normal companies you do not use free cash flow so just get rid of that when you're doing insurance company valuations you look at the PE Ratio which is at 11 so it's very cheap an inexpensive company which attracts Buffet to it and you also have the price to book it's 1.6 which is also not the cheapest for an insurance company but not expensive overall Buffett's buying a cheap insurance company and I believe the reason why is to get more access to cheap float Buffett knows the power of float float is the amount of money that you have left over from insurance companies due to payouts but you don't have to use it you only have to use that money if you need a payout in the meantime you can invest that float and Float becomes more valuable when interest rates go up so it makes perfect sense to me that Buffett would want to buy into a cheap insurance company as interest rates have gone up as the float becomes more attractive I think he looks at this this as cheap access to investing Capital the only other notable thing that Buffett has done recently is sold off his Paramount Global stake which I think was a good move I've always thought that Paramount Global has been a value trap for years so I'm glad to see that one go so overall all the trades Buffett has made trimming app a little bit buying an insurance company and dumping Paramount Global I agree with them I think they're good moves now next up we have Bill Amman he's a super investor because he manages over $10 billion he's had an annualized return of around 16 to 17% and he invests in what he calls dominant free cash flow companies he's made a lot of money on different food joints companies like Chipotle companies like Burger King companies like Starbucks throughout his past so he likes investing in these different food joints now if we look at Bill amman's most recent trades I first want to start off by looking at what he's recently sold he sold out of lows completely I think that's a good move I've said before that I don't want to own anything that has anything to do with houses or big loans things you have to go to the bank and get a big loan to purchase in many cases home renovations and redoing your backyard and doing construction projects those are things that require a lot of capital and now that interest rates are a lot higher I believe it's going to be more of a struggle for lows so this is one that I think was smart to move out of and I've done the same thing I've been out of any company that requires large loans for a long period of time if we look at his current portfolio right now he did make some trades last quarter the only trade he made was that he sold out of lows and he also trimmed his Chipotle position by roughly 10% I've invested in Chipotle for a bit over a year and the stock is just nuts if you look at what Chipotle is doing it's really incredible I bought Chipotle just a year ago around this point I thought it was in a dip and it had a decent value proposition and then they had incredible same story sales growth incredible same store sales growth over and over again while simultaneously almost every other restaurant is not doing well Chipotle and Texas Roadhouse are two of the only restaurant companies doing well ones like McDonald's Starbucks are having major pullbacks so this company has really outperformed its pairs to a huge degree so I look at Bill Amman and he's probably thinking you know I've owned this company for years he's made almost five times his money on Chipotle it's gone up to all-time high valuations it has so much bullish sentiment and momentum in the stock that it's almost a guarantee things aren't going to go this well forever things never go this well forever there's going to be some bad quarter some bad sentiment something negative that happens that causes the stock to trade down a little bit off of its 55 Ford PE so when I look at Chipotle I acknowledge it's a one-of the- kind company it's a world-class asset I think it it has incredible growth opportunity but things are just going so well that it's hard not to want to take some gains right now when I look closer at billman's portfolio I agree that it has many of those dominant great companies that he talks about the free cash flow generative companies but there's one position in this portfolio that I don't like I like Chipotle I like Hilton I like Google I like Howard Hughes Corporation I love Canadian Pacific I don't like restaurant brands International and he has this as a massive 17% position this is one that I just don't understand the investment thesis here in the past year it's down 3% in the past 5 years it's up 5% so the stock has been flat the entire time he's owned it which I think is okay it's okay to buy stocks that go flat for a while but even when I look at the investment case here restaurant Brands International owns Burger King which I believe is one of the weakest brands of burger joints I'd rather own McDonald's than Burger King there's not a lot of metrics moving in the right direction and this is also a company that has a lot of Leverage in the business model so this is one that I don't agree with I don't like qsr I think there's much better investment opportunities even in the food category so I wish he'd switch this one out but overall all the other positions I really like so I think this is overall a very strong portfolio now next up we have Terry Smith the investor known for buying highquality companies not overpaying and holding on to them long term that's his overall investing thesis but but he's very analytical about how he does it he looks at things like the return on Capital employed and so far he's managed to have around 15% returns for a long period of time so he has beat the market for a while but more recently he's made some major missteps with his Fund in particular on his selling his selling has gotten him in trouble over and over again and one of the notable things that has changed for Terry Smith is that he's a massive fund manager and Morning Star has always rated him as a gold fund gold because of how stellar and how consistent his performance has been but with the major missteps he's made over the past couple of years they've downgraded that to a silver I want to go over the reasons for this downgrade so here we have a video from Morning Star where their analysts are describing some of the major missteps he's recently made I'd like to draw attention to Terry Smith cell discipline uh which in recent years and particularly the last 18 months has really come to the four um we we tend to see this kind of thing happen for for Buy and Hold managers when they see some outflows um but but here what I see is a slight lacking rigor is uh is is is really something um which which I've taken a look at um so PayPal Terry Smith says he sold that too late um and and there are a number of management missteps there he held on to PayPal all the way down so he lost a bunch of money in PayPal Terry Smith sold it way too late and then he kind of blamed the management of PayPal is kind of like a a reason to excuse his selling at too late Este louder which had some difficulties in China was simly painful for the fund that's another one I sold out of Estee Lauder at a big profit because I listened to one one call one earnings call and it gave me so many red flags that I thought I have to exit out of this position today Este lauder's management went over uncertainty after uncertainty with that earnings call and so I decided to sell the position because it was trading at a higher evaluation Terry Smith hung on to the position all the way down s day Lauder was another one like PayPal that just plummeted these were sold too late on the other hand there are also a couple of positions that were sold too early or at least according to Terry uh these was fundamentally Justified but then the price took off afterwards in part each to the massive Tailwinds from AI so so that was Amazon and then also Adobe he had positions in Amazon and Adobe and he held on to these companies when they're doing okay and then we know in 2021 they both took a huge did Amazon went down like 50% Adobe went down even more these were companies that I was pounding the table to buy during those lows specifically Amazon I added a lot more to Amazon at like $80 or $90 a share and at the same time period shockingly to me Terry Smith decided to sell his Amazon position almost at the complete low the worst time possible now he held on to his meta position but selling Amazon at the low was such a bad move for him so you have a couple instances where he's selling too late and then you have these instances where he's selling way too early another example of a poorly timed sell from Terry Smith recently was into it he had into it as one of his big positions he was invested in the company but then he sold out after writing a scathing letter to the management team of into it saying that they're doing deceiving accounting metrics right after writing that letter and selling out in stock proceeded to Surge around 70% so that's was another just misfortunate Time by Terry Smith so he's gone through a string of situations of selling either too early or too late and overall that's damaged the performance of of fundsmith over the past year it's underperform the market because of these poorly timed trades now if we look at his portfolio today I look at it and I noticed a couple trades hair he's trimming around things like trimming a little bit of Pepsi trimming some McCormick you know he's buying into Texas Instruments that's a new position he bought into he bought a little bit more apple on the dip so he's doing the opposite of buffet there buying Apple when it dips down a bit that's interesting to see he trimmed a little bit of msci this is one that I don't know why he's trimming right now I think this would be a good one to add to right now so overall I have a mixed view on his trades I think he's doing a good job of just buying a group of highquality companies and holding on to them but when I observe the individual trades he's done recently I haven't been impressed he needs to go back to his roots of buying high-quality companies on a dip and selling them after the fundamentals start to give red flags if he'd followed that simple formula that he outlines he would have had a better return over the past two years now next up we have the super investor Chuck arri there is one caveat here though Chuck arri himself is a legend the guy is one of the best compounding investors over time he invested in a lot of companies like MasterCard and Moody's at bottom valuations and held on to them year after year year after year with diamond hands that was what he did he bought great companies and he held on to them with diamond hands but the caveat here is that Chuck gri himself is still on the names of many of these funds but he himself has stepped down from managing These funds he's passed the bonon to different portfolio managers and there's never really the same you can't replace a guy like Chuck ay in many cases even though someone has watched him invest and they think they can mimic what he does they're not going to mimic it as well as he does it so what we see here is a little bit of a deviation from his previous strategy let's go ahead and take a look when we look at his portfolio he still has MasterCard as a top position and then Moody's as the second largest position but you'll notice that almost every quarter they're trimming and trimming more of these wonderful companies that just doesn't make sense to me I look at their value over time or their amount of shares held over time and this is when he's been stepping down after that the new portfolio managers are selling shares of MasterCard what is wrong with MasterCard right now why are they selling shares when I look up MasterCard and I review the fundamentals and the valuation of the company everything looks really good it's at a 30p ratio which it's traded at for a long period of time it's at a 2 and a half% free cash flow yield the company has incredibly consistent growing Revenue over time the company has Revenue growing in both segments their value ad service and their payment networks the company has more and more people every quarter using Master cards both their debit and their credit cards you can look at the total amount of Master cards over time on qualm last quarter it was 3.01 billion MasterCards worldwide many of these are international people are going to spend more and more on MasterCards every year so I look at the fundamentals of the company and I can't find any weaknesses I look at the free cash flow and take a look at this chart it just looks incredible I look at the ebot of the company and the earnings per share the share count going down the dividend growing so when I go over the possible reasons for trimming MasterCard I don't believe it's based on weaknesses in the fundamentals I believe it's based on valuation and I believe that if Chuck AE himself was still running this fund you would see the share count remain steady you would not see the share count going down I believe that it's the new manager trimming MasterCard because of a perceived valuation problem we have the same thing with Moody's they sold another 6% of their Moody's position at the very same time we have Uber here this is a new position in the portfolio so no history with it but I find it odd for them to sell out of MasterCard and Moody's and buy Uber another company that they're buying into new is called CCC intelligent solution this is a software company that by their own description they provide Cloud mobile and AI telematic hyperscale Technologies and applications for the Property and Casualty Insurance economy very complex sounding company when I look over the fundamentals they look okay not great they don't have consistent earnings per share growth they have positive cash flow in growing Revenue but this isn't the type of company that I typically see Chuck AE buying into he usually buys already great firms that he can extrapolate great returns in the future so overall when I look at chakri I still think it's a great portfolio and it's still following overall the blueprint of very high quality companies Compounders but I think his recent trades especially under the new management are a little bit questionable now next up we have a firm called polling Capital that manages $43 billion and they run a focused growth portfolio where they've had around 15% annualized returns many of the companies that they hold if we take a look at their portfolio it's very similar to the type of ones that I hold a lot of them are more Tech focused they're growth focused I consider these companies to be overall very high quality now we can take a look at the trades they've done this last quarter they've invested in Amazon and Microsoft a lot last year and they're trimming down these positions slightly they trimmed 5% off their position on Amazon but it's still overwhelmingly their largest position 15% so if you talk to the managers at polling Capital they'll say that they're incredibly bullish on this company they really believe in this story of Amazon generating record profits and that's why they've positioned it as roughly triple the normal size position of a company in their portfolio so huge bet on Amazon still but as Amazon goes up they're taking a little off the table then they Microsoft Google and Visa all of those they've been trimming a little bit except for Visa Visa they've actually added to they added 15% to visa and they took a little off the top from MasterCard I think they do this because they they see a little bit of evaluation discrepancy and overall this is something that I've noticed with polling Capital they don't do the Buy and Hold strategy they're constantly rearranging positions and trading positions like if you look over here in the activity every single position they're trading down or up by 10 20% and that's a lot of trading they've said before in an interview that all of this trading really hasn't yielded Superior returns they've had kind of neutral returns from all of their little trading if they would have just held on to the positions they originally bought into they likely would have had even better performance especially when you factor in transactional costs so I don't really like the strategy of trading four or 5% of a position every every single quarter like they do but regardless this is one that I like to follow because I like the company selection for example they just invested a bunch more into thermofisher scientific another one that's very high quality great Returns on Capital they also bought more Abbot Laboratories and Airbnb a lot of these companies are super highquality companies overall I think it's great now next up we have Pat dorsy the one that developed the Morning Star moot rating system let's go ahead and take a look at what he's been up to we have his portfolio here that looks relatively the same not a lot of differences we still have meta as a very top position he has reduced his meta stake by 25% makes sense it's traded up a lot he's taking some off the table and then the other positions he's left roughly the same reducing all of them by 1% he's reduced herk Holdings by 13% and then there's a couple additions to the portfolio the first major addition is a new position which is AutoZone he added AutoZone to the portfolio as an 8 .5% position let's go ahead and take a look at AutoZone this company is called a cannibal it's a company that does buyback Galore it's a buyback machine take a look at their shares outstanding over time in the early 2000s they had around 140 million shares and now currently they have 17 million so this is how this company operates just last year they bought back 6% of their shares outstanding when they remove the shares outstanding it grows the earnings per share and the free cash flow per share when you grow earnings per share and free cash flow per share the stock price goes up so as they've been doing these incredible consistent BuyBacks for decades the stock price has also been a massive winner going up 450% over the past decade now the only thing that confuses me about this recent buy into AutoZone is that's been the same investment case for a long period of time and I can't find anything that's changed recently there's no dip in AutoZone the company's gone up this year so far so I don't see any specific Catalyst of why he would now add this company to his portfolio but either way I don't think it's going to hurt things overall I like the portfolio of Pat dorsy today more than I have historically a couple years ago I wasn't impressed but I like where it stands right now now next up we have Christopher bloomstrand he manages around $400 million and he has more of a fundamental analysis style where he invests in cheaper companies he's a big follower of Buffett and a lot of his portfolio is in Berkshire Hathaway so around 30% of Christopher bloomstrand portfolio is invested directly in Berkshire I don't really agree with doing that just because I think if you're going to hand your money over to Christopher bloomstrand and then he puts your money with Burkshire you know you could just invest directly in Berkshire but either way he likes trying to invest in Berkshire at a discount to its intrinsic value so he'll buy more of the company when he thinks it's underneath its fair value the other notable additions to a sport portfolio or the things that he's been doing recently is instead of selling out of Paramount he bought in Big He increased his position size by 65% this has been a losing position for Christopher so far but he still thinks there's hope he believes he's getting dollars for Penny's hair I think the story of Paramount is one that's in distress they're eventually going to have to sell it off that's going to be very complex they're going to have to craft a deal to do it correctly the position that he reduced is Disney so he reduced his Disney position by 34% and he increased his Paramount position by 65% see if I was doing this I would be doing the complete opposite I'd rather be buying into Disney right now and selling out of Paramount so you see some differences there he's focusing I believe the most on valuation which right now Paramount is very very cheap he's also adding to Starbucks he increased the position size by 20% and I think he probably will increase it more after this most recent selloff I think that this is a decent move things are really bad for Starbucks right now we can look at the stock and you can see it getting punished right now and their same store sales are declining their app usage is declining there's a lot of concerns about competitors and so on and so forth but that's typically the best time to be entering into a position and be increasing positions is as these great companies like Starbucks go through troubles the troubling time for Starbucks won't last forever so although I'm not buying the stock right now I do actually like seeing this buy buying into weakness other than these trades I don't see anything too notable here some shifting around on the portfolio but it largely looks the same overall I think that Christopher Bloom strand's portfolio is safe conservative but I don't think it's going to have incredible performance over the market now next we have a very good super investor Chris hone I think he's one of the best and he's recently had a string of some of the best performance of any hedge fund manager in fact over the past couple of years he has been the top hedge fund manager let's go ahead and take a look at his portfolio he manages $40 billion so he's attracting a lot of funds because of his recent success and we look at some of the things that he's had as huge winners one of them is GE he really nailed GE this was one that he got so correct he invested in this company let's take a look here he invested most of it in q1 of 2023 so that's when he bought in and then he bought a little bit more in Q2 of 2023 and of course when we look at the Stock's performance over that time period he was buying it right around here right before it took off and it went through a string of performance where the stock price nearly doubled the biggest change he's made this quarter is he's reduced his position a little bit in thermofisher scientific and he added more to GE other than that most of his positions look relatively the same I continue to believe that Chris will beat the market by a sizable amount the companies that he's concentrated into are monopolies they're incredibly difficult to disrupt and he has diversification across different factors he's not investing in all of the same types of companies these are ones that operate in all different types of businesses but overall it's an incredibly strong portfolio I think stronger than the broader market now finally we get to Michael bur who needs no introduction bur made a series of Trades like he always does here's his activity for the past quarter and he's buying and selling a lot of stuff but if I were to summarize it the major moves he did this quarter was he sold software so us software companies like Google Oracle all these type of companies sold out of them Amazon he dumped that as well MGM he dumped that Warner Brothers Discovery he dumped that all these different stocks they're gone and then he bought in to Chinese retailers he increased his position size dramatically or bought into new ones again the other software companies toast a restaurant software company he dumped out of that so a lot of different software companies he got rid of but he bought into Chinese retailers and commodities companies like gold trust Sigma group and BP these are other big additions in his portfolio so overall the portfolio looks like this he has JD as the largest position ala we have City group we have block that's one software company that he kept but it's hard to make sense of this it's a lot of different companies and this is why I think it's so difficult to try to mimic what Michael bur is doing the one major thing I see Michael bur continually do is he buys into the most hated places in the markets for example right now Chinese retail companies are probably the most hated portion of the entire Global Market and those are his top positions so he likes buying where nobody else will buy he doesn't care about the sentiment he doesn't care what other people see he just looks at the value himself and he'll buy into those situations now I'm not going to be mimicking his strategy but I do think it's cool to see him go where other investors aren't willing to now that concludes part one we went through nine super investors and looked at what they're doing but we still have part two where we have another eight super investors to go through including ones that are really great like Dev kesaria and Brad gersner of ultimiter so we have a lot to look forward to I hope you enjoyed and I'll see you in the next one

Channel: Joseph Carlson After Hours

Views: 116,676

Keywords: The Joseph Carlson Show, investing, stocks, stock market, dividends, portfolio update, m1 finance

Id: UourMLRQiVc

Length: 30min 38sec (1838 seconds)

Published: Fri May 17 2024