The Form 13F mandated by the Securities Exchange Commission (SEC), requires all institutional investment managers in the United States to disclose all securities purchased and sold within 45 days after each calendar quarter.
Take advantage of this SEC regulatory requirement and start managing your own portfolio!
Follow the Great Investors
Considered by many to be the best investor of all time, you can track every move in his portfolio trade by trade
Made a name for himself in money management after displaying his transferable skills in the World Series of Poker
Known as one of the most feared activist investors, be on the winning side in corporate takeovers and LBOs
Proven results - achieve above average returns by replicating the best investors
S&P 500 Index
Following Warren Buffett
Following the Best Investors – Does it Really Work?
It might be difficult to believe that anyone can profit from the stock market simply by purchasing securities disclosed in the 13F forms filed by investing professionals. However, a recent study by two university professors proved that anyone could achieve a spectacular investment result solely by buying the same stocks as Warren Buffett. The study takes into account only publicly available information provided by the Form 13F as disclosed by Berkshire Hathaway (Warren Buffett’s holding company), to the Securities and Exchange Commission (SEC). The study found that even if you purchased the securities bought by Warren Buffett an entire month after publicly disclosed, you would have earned above average returns of 14.26% per year. You can find the complete text from the Social Science Research Network by clicking here.
Investing StrategyWarren Buffett employs a classic value investing approach comprised primarily of large cap growth stocks
Outperform the Market
The average annual return of Berkshire’s stock portfolio outperformed the S&P 500 by 14.65% from 1976 to 2006
Statistical EvidenceThere is strong statistical evidence to explain the abnormal returns achieved without taking additional risk or leverage
Follow this easy step-by-step guide and learn how to follow the great investors
Step 1: Open and Fund a Brokerage Account
Take the first step to managing your own portfolio by opening a brokerage account with any one of a number of broker services. Most commercial banks offer personally directed investment account options allowing you to manage your investments along with all of your other financial services. Alternatively, you can explore the option of opening an account with an online brokerage firm often at a discount to services provided by commercial banks. The majority of online brokerages provide additional resources such as research tools, electronic trading platforms, and live help services. Visit our brokerage comparison page to view current offers available by several online discount brokers and start trading today!
Step 2: Discover Your Favorite Investors
There’s a good chance you are already aware of and/or own an investment fund managed by one of the reputable investors. Rather than paying a hefty commission to these managers you can simply find the investors you most admire and follow them trade by trade. If you’re having difficulty finding a place to start, resources are available that allow you to view historical performance of hundreds of institutionally managed funds. Morningstar research is one of the premiere rating agencies that provides detailed information and recommendations on the top investment managers in the United States.
Step 3: Search the SEC Database for Form 13F Filings
The next step once you have determined which investors you would like to follow is to search the Securities and Exchange Commission (SEC) database for all 13F forms recently filed. You can access the database search tool by clicking here. Be aware that it will take some practice before you are easily access the information you require. For more help searching the EDGAR database, a tutorial and additional information can be found on the SEC website by clicking here. The appropriate 13F form will contain information regarding all of the securities owned under the parent company during the previous calendar quarter.
Step 4: Perform Independent Research
It is highly recommended that you conduct your own research before investing in one of your favorite investor’s companies. You do not need to be an expert on every company, but it proves valuable to have a general understanding of a company you are investing in. Time is a scarce commodity and understandably many people are not willing to invest a significant amount of time to learning the investment fundamentals. However, for those wishing to learn more it may prove valuable to read some introductory material on the basics of investing.
Step 5: Place Your Trades
You’ve opened and funded a brokerage account, discovered the top holdings of professional investors, and narrowed it down to a number of companies you would like to invest in. The next step is is buying the securities you wish to acquire. This takes a minimal level of technical skill and is quickly learned by following tutorials usually provided by your online brokerage firm. Always remember to review orders before they are placed and be sure to remain within the restrictions of your trading account. It will take some practice but will soon become a routine process in managing your own portfolio.
Step 6: Re-evaluate Your Positions Quarterly
The rest from here is easy – just sit back, relax, and watch your portfolio holdings grow. With minimal effort you can review the newly released 13F forms from the investors you follow within 45 days after every calendar quarter. Stay up-to-date with each quarterly filing from all of the investors you follow, and make appropriate changes to your portfolio only as required. The six-step process is effectively simple, eliminating overpriced fees and commissions, yet will allow you to own the same securities as the greatest investors. Keep your money in your wallet and open a trading account for free with our selected brokers!
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"Take a simple idea and take it seriously" - Charles T. Munger
Follow the Professionals
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