Given how hard it is to generate market beating returns year after year, many investors continue to search for any kind of edge that will give them a leg up on the stock market. Not satisfied with owning index funds like the SPDR Dow Jones Industrial Average (ARCA:DIA) and following the tenants of plain index investing, many are taking an active role in portfolio construction. With the birth of the Internet and a host of financial media outlets available, following the lead of endowments and market gurus has never been easier. Individuals are now able to model their own portfolios after some of the biggest names in the game.

Guide To Oil And Gas Plays: We've got your comprehensive guide to oil and gas shales in North America.

The key is by looking at simple cheat sheets that all hedge fund, institutional and pro money managers must fill out with the Securities and Exchange Commission (SEC). The quarterly report that money managers with over $100 million in equity holdings must fill out is the SEC Form 13F, and it's basically a free glimpse into what the most successful money managers and investors are buying and selling each quarter. By reading some of the world's biggest investing superstars' 13F, investors can see just how the smart money is positioning themselves, and transition into coattail investing.

However, digging through all of those filings can be a daunting task. Luckily, we here at Investopedia have done the leg work for you and present some of the biggest market pundits' latest calls and how you can profit from them.

America's Favorite Billionaire
When he's not campaigning for higher taxes on the rich, Berkshire Hathaway's (NYSE:BRK.A, BRK.B) bespectacled billionaire Warren Buffett does a fair bit of investing. The legendary value investor guided Berkshire's $75 billion portfolio into a handful of new positions this past quarter.

The key theme for Buffett seems to be heavy duty American industrial might and manufacturing. According to his latest 13F, Berkshire's buys this past quarter included agriculture giant and tractor maker Deere (NYSE:DE), metal component producer Precision Castparts (NYSE:PCP) and WABCO Holdings (NYSE:WBC). WABCO makes a series of electronic, mechanical and mechatronic products for commercial truck, trailer, bus and passenger car manufacturers worldwide.

While these new stocks make up a small percentage of Berkshire's total portfolio, the stocks' leadership status in their respective fields makes them quintessential Buffett picks, and are great ways start building your own baby Berkshire.

Big Bets on Gold
Billionaire hedge fund managers George Soros and John Paulson may not run the same funds, but they are thinking in the same vein. Both are making a calculated bet that all the debt, quantitative easing programs and global uncertainty will continue to push gold prices up in the near future. Adding in the current fiscal cliff mess and it's easy to see why both billionaire managers have added a hefty dose of gold exposure to their portfolios.

Paulson currently has SPDR Gold Shares ETF (ARCA:GLD) as his top holding, and the fund accounts for 29.53% of his portfolio. Soros - who also added to the gold exchange traded funds (ETF) - took his love affair with the precious metal one step further and added exposure to the miners of the metal via ETF. This includes large - 2.4 million share each - stakes in the Market Vectors Gold Miner (ARCA:GDX) and Junior Gold Miner ETF's (ARCA:GDXJ) as well as the SPDR Metals & Mining ETF (ARCA:XME).

If you already have an interest in investing in gold, you may want to consider following in the footsteps of Soros and Paulson, but just make sure you fully understand the dangers of coattail investing.

Value in Tech
Like Buffett, Whitney Tilson is a serious value investor. Aside from managing T2 partners, Tilson is also the co-founder and Chairman of the famous Value Investing Congress - an investment conference that takes place twice per year - as well as the editor-in-chief of investment newsletter Value Investor Insight. He has based his whole career around finding polished stones in the market.

Today, Tilson is seeing value in technology stocks. His 13F showed that he increased his stake in tech darling Apple (Nasdaq:AAPL) via call options and shares. He also increased his stake in Netflix (Nasdaq:NFLX), which is a reversal of his former short on the shares. The hedge fund manager also sees plenty of value in other beaten up old tech giant Dell (Nasdaq:DELL).

The Bottom Line
For regular retail investors, following the lead of various guru and superstar investors is a great way to formulize a portfolio strategy and ultimately beat the markets. The best way to catch up on what the smart money is doing and thinking is through the required 13F filings with the SEC. The previous examples are just some of the ideas floating around and could be used to strengthen an individual's portfolio.
At the time of writing, Aaron Levitt did not own any shares in any company mentioned in this article.

Related Articles
  1. Mutual Funds & ETFs

    ETF Analysis: Vanguard Total World Stock

    Learn about the Vanguard Total World Stock exchange-traded fund, which invests in stocks located in numerous countries with a high level of diversification.
  2. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI USA Minimum Volatility

    Learn about the iShares MSCI USA Minimum Volatility exchange-traded fund, which invests in low-volatility equities traded on the U.S. stock market.
  3. Mutual Funds & ETFs

    ETF Analysis: BioShares Biotechnology Products

    Learn more about the BioShares Biotechnology Products fund, an exchange-traded fund that is focused on producers of FDA-approved drugs.
  4. Mutual Funds & ETFs

    ETF Analysis: SPDR EURO STOXX 50

    Learn about FEZ, the Euro Stoxx 50 ETF. FEZ tracks the 50 largest companies in Europe, making it the Dow Jones Industrial Average of Europe.
  5. Mutual Funds & ETFs

    ETF Analysis: ProShares UltraShort Nasdaq Biotech

    Learn more about an innovative inverse-leveraged sector exchange-traded fund, or ETF, the ProShares UltraShort Nasdaq Biotechnology fund.
  6. Chart Advisor

    Value Stocks Offer Stability in a Volatile Market

    With volatility on the rise, investors are turning to segments of strength such as value stocks. We'll take a look at several ETFs that could be worth a closer look.
  7. Stock Analysis

    Should You Follow Millionaires into This Sector?

    Millionaire investors—and those who follow them—should take another look at the current economic situation before making any more investment decisions.
  8. Professionals

    What to do During a Market Correction

    The market has corrected...now what? Here's what you should consider rather than panicking.
  9. Mutual Funds & ETFs

    ETF Analysis: First Trust Tactical High Yield

    Find out more about the First Trust Tactical High Yield fund, a debt security-focused ETF designed to produce high income.
  10. Mutual Funds & ETFs

    ETF Analysis: Market Vectors EM High Yield Bd

    Learn more about the Market Vectors Emerging Markets High Yield Bond ETF, a fund dedicated to subinvestment grade foreign debt issues.
RELATED TERMS
  1. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  2. Hunting Elephants

    The practice of targeting large companies or customers.
  3. Exchange-Traded Mutual Funds (ETMF)

    Investopedia explains the definition of exchange-traded mutual ...
  4. Tactical Trading

    A style of investing for the relatively short term based on anticipated ...
  5. Maximum Drawdown (MDD)

    The maximum loss from a peak to a trough of a portfolio, before ...
  6. Gross Exposure

    The absolute level of a fund's investments.
RELATED FAQS
  1. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  2. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  3. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>
  4. Does index trading increase market vulnerability?

    The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>
  5. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  6. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!