4th Dec 2021

What guru investors were buying in Q3/2021

Today's blog post is here to give a lot of inspiration on different stocks and to show what guru investors bought in the third quarter. Many stocks will be mentioned, but each of them should then be subject to individual research and each investor must decide by himself/herself.

Following famous investors is not a guarantee of success. Take this article as just a source of inspiration.

Role models without guaranteed success

Guru investors like Warren Buffett, Charlie Munger, Bill Ackman, George Soros, and Bill Gates are role models for many individual investors thanks to their track performance and knowledge. These investors have their own investment funds, and they should disclose transactions in their portfolio every quarter through the 13F filling report.

There are exact days, calls 13F days when these reports go public. Retail investors are looking forward to them as a source of inspiration or to copy the strategy.

13F days are every year on these days:

  • February 15
  • May 15
  • August 15 (this year it was August 16 since the 15th was a Sunday).
  • November 15

As I wrote above, these reports are certainly an interesting source of inspiration but remember that we do not know much information such as:

  • what was the purpose
  • how long they want to keep it
  • what was the exact purchase price (although it is possible to estimate it)
  • under what conditions they want to sell or add more

Some people may think that when these guru investors buy something, they must have "guaranteed" information or, in the case of Warren Buffett, that it is a safe bet because his strategy is not to sell stocks.

Unfortunately, this is not always the case and even these investors do not have a clean sheet without losses. Maybe they have more information thanks to the research teams and vast network of contacts, but they will never have all the information, or their strategy simply may not work out.

Examples of gurus loosing

Bill Ackman and his Herbalife short position (bet on price drop) cost him more than a billion dollars, according to Investopedia. Part of this story is described in the interesting documentary Betting on Zero.

Warren Buffett is not without a scratch either, whether it was investments in Kraft Heinz, IBM or airlines When he started buying the Berkshire Hathaway textile mills in 1962, he later realized that the company's textile business was essentially worthless, and he wanted to get rid of his positions.

Following guru investors is not a guaranteed path to success. However, it is a good tool to get information about new companies, on which each investor must then make his/her own opinion.

Let's have a look at the latest purchases by guru investors.

In this article, I will focus primarily on purchases, because it is the main source of inspiration on how to find new interesting stocks. Of course, you can also track the reduction or size of each purchase in your portfolio. We can check that out next time if you're interested.

Warren Buffett

  • Liberty SiriusXM Group (LSXMA) – addition
  • Royalty Pharma PLC (RPRX) - addition
  • Chevron (CVX) - addition
  • Floor & Decor Holdings (FND) – new position

Warren Buffett, like the last quarters, didn't make significant moves. Dividend investors were perhaps most impressed by the bet on the oil industry through Chevron, dividend aristocrat. Price since his purchase went up around 10-15% so now Chevron is not so appealing.

Oracle from Omaha reduced his position in the pharmaceutical sector. He reduced positions on Abbvie (ABBV) and Bristol-Myers-Squibb (BMY) and completely sold Organon (OGN) and Merck (MRK). He also reduced positions on payment providers Visa (V) and Mastercard (MA).

Bill Gates

  • Affirm Holdings Inc (AFRM) - addition
  • Deere & Company (DE) - new position
  • Kansas City Southern (KSU) - new position
  • Madison Square Garden Sports Corp (MSGS) - new position
  • Microsoft (MSFT) - new position
  • On Holding AG (ONON) - new position
  • Weber Inc (WEBR) - new position

Bill Gates had the most active quarter of the year. It is worth mentioning his fund purchased Microsoft and made it its 7th largest position in the portfolio with 3.6%. Then, he bought KSU, which is going to be acquired by National Railway, which Gates already has in his portfolio.

Other companies such as WEBR, ONON or AFRM make up only a small part of the portfolio (below 0.2%) and are companies that had IPO just recently.

Apart from purchases, Gates also sold part of Berkshire Hathaway's shares, but it is still by far the largest position (45%).

Bill Ackman

  • Chipotle Mexican Grill (CMG) - addition
  • Domino´s Pizza (DPZ) - addition
  • Howard Hughes Corp (HHC) - addition
  • Hilton Worldwide Holdings (HLT) - addition
  • Lowe´s Companies (LOW) - addition
  • Restaurant Brands International (QSR) - addition

Bill Ackman is loading his portfolio with fast-food chains and home improvement retailer Lowe's hobby market. All positions were just slightly increased. Interestingly, QSR's share price is currently on 52w lows so it might be a good time to buy QSR shares instead of Whopper.

Seth Klarman

  • Archaea Energy (LFG) – new position
  • Dropbox (DBX) – new position
  • Joby Aviation (JOBY) – new position
  • Liberty SiriusXM Group (LSXMA) – addition
  • Theravance Biopharma (TBPH) - addition
  • Verint Systems (VRNT) - addition

Seth Klarman is an investment manager at the Baupost Group, which he founded in 1982. He is a master of value investing, and those who have read the new edition of the book The Investor may have come across his comments here.

However, many of his purchases would not meet the parameters of this book. He purchased companies with no profits, no history or high P/S, P/B, or P/E ratio.

Dropbox's share price fell by 20% since early November.

Just to mention for dividend investors, he reduces his on Intel and International Flavors & Fragrances.

George Soros

There are many transactions in George Soros's fund, so just to list the main changes:

New positions

  • Coupang (CPNG)
  • EQT Corp (EQT)
  • JP. Morgan Chase (JPM)
  • UnitedHealth Group (UNH)

Added to existing positions

  • Aramark (ARMK)
  • General Motors (GM)
  • T-Mobile US (TMUS)
  • Salesforce (CRM)

JPM and UnitedHealth Group are certainly interesting well known and established companies

Charlie Munger

Charlie Munger doesn't make many changes. He did nothing in the second quarter. In the third one, he added Alibaba. He initiated a position in the first quarter and is now added as the share price is falling.

Charlie still believes in China despite all headwinds. “Buffett from India” Mohnish Pabrai did the opposite and slashed his Alibaba position by 77%.

What a nice example of how 2 guru investors have opposite opinions...

Michael Burry

Michael Burry, the star of The Great Recession, made 3 new purchases:

  • Lockheed Martin (LMT)
  • NOW Inc. (DNOW)

It's an interesting strategy – LMT as an established blue-chip company with a nice dividend yield, DNOW as a growth company, and SCYX as a turnaround bet.

At the same time, he significantly slashed GEO Group (GEO).

Most bought stocks

The list could go on with other guru investors, such as Carl Icahn. He purchased Dana Inc. and Icahn Enterprises. David Tepper from the Appaloosa fund purchased Macy's, Kohl's, or added Alphabet.

No surprise to see Alphabet, Amazon, Meta or Microsoft in the most purchased stocks category.

Intel, CVS Health, 3M, Pfizer, JNJ or Verizon are certainly interesting names with dividend yields around 3% (and above). Activision Blizzard or GE are bets on the business turnaround.

Hope you have found inspiration here and for possible further research.

Jan K. is an independent dividend growth investor and founder of Snowballdividend.com personal blog, portfolio & stock research database.

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