Invest With the Masters

Scraping together enough coin to win the annual luncheon auction with Warren Buffett is probably beyond most investors' means. With the proceeds going to charity, this year's winning bidder forked over $2.63 million for the privilege.

Feast or famine
While we likely can't afford to break bread with the greats, we can peek at their stock ideas through their SEC filings. Here, we'll pore over some of the top investors' reports to see which stocks they've chosen as their best investments. We'll then check in with Motley Fool CAPS members to learn whether they agree.

First, the caveats

• There's a delay between when the stocks were bought and when these investors filed their paperwork, so they might have sold out since.
• These legends may be hot investors now, but that can change in an instant. Bill Miller was a wunderkind after beating the market 15 years in a row. Then he went cold for three. He came back in 2009, but we don't know what 2010 will bring.

Contrary to popular opinion
Fools should definitely do their own further research here. But in the meantime, let's take a look again at well-known value investor Mario Gabelli, founder and CEO of money management firm GAMCO Investors, in which he owns a majority stake. We looked at his trades this past September and it seems he's still focused on the same sectors.

Fund: GAMCO Investors
No. of Stocks Owned: 1,252
Top 5 Holdings: Cablevision, DirecTV, National Fuel Gas, American Express (NYSE: AXP), Deere (NYSE: DE)
Top Sectors: industrials, consumer services, consumer goods

Like a number of the investing legends we've looked at, Gabelli has a fairly diversified portfolio, but despite the addition of quite a few new companies there's been little turnover at the top with American Express and Deere two of those that have remained. Let's take a closer look at some of them to see what CAPS members have to say.

 
Source: GuruFocus and Motley Fool CAPS.

Price is what you pay
Gabelli might be keeping his focus on certain sectors, but utilities are one that got his attention. If Progress Energy and Southern are any indication, he's liking the southeast portion of the country to plug into, adding to existing holding Duke Energy (NYSE: DUK).

Last year, Progress settled a dispute with state regulators over rate increases, which ought to improve the utility's financial and regulatory risk. The base rates will be frozen until 2012, but it can seek rate relief before then if its return on equity falls below 9.5%. Higher rates are also in store for Southern, the second-largest utility behind American Electric Power (NYSE: AEP), which won the right to raise rates by $2.1 billion in Georgia.

Although highly regulated, utilities are still seen as a stable business in which to invest, and their dividends are an attractive byproduct. The dividends at Progress and Southern are yielding 6.3% and 5.5%, respectively, and this helps explain why more than 90% of CAPS members rating both of them believe they'll outperform the broad market averages.

Tunneling down to growth
Randgold Resources might be considered one of Gabelli's poor choices so far, though it's hard to bet against the precious metal at this point. Still, the politically tumultuous situation in Ivory Coast is going to impact Randgold's production. Supply routes are blocked, operations have been curtailed, and shipping delays have prevented deliveries from getting through.

Ivory Coast's neighbors are trying to negotiate a resolution to the crisis that's seen its current president refuse to step down despite the United Nations saying he lost the election. The signs are hopeful for a peaceful end to the crisis, and when that occurs, Randgold ought to be able to get its Tongon project back on track. While Randgold might not make the list of top gold miners, gold's elevated price these days will enable it to carry on until its project in Congo, budgeted at around $900 an ounce, is able to come online in 2014.

Investors remain buoyant about Randgold's prospects, and the continuing belief that gold will continue to rise in value helps CAPS member l00weredblaze see through to the miner's rise.

Let us know on the Randgold Resources CAPS page whether this gold miner will strike a rich vein.

Value is what you get
Become an investing legend yourself by starting your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page.

Sign up today for the completely free service, and tell us whether these stocks are as good a value as these investing legends think they are.