Stealing Great Investing Ideas From the Masters

Small-time investors often complain that the field is stacked against them -- that big investors with more information and more analysts will always win.

But there's a law that turns this perception upside down. Large investors are required by law to publicly disclose their investment holdings every quarter on a form called a 13-F filing. Small investors can simply scan 13-F filings to see what the world's greatest investors are buying and piggyback on their trades.

The law is truly a gem for small investors. In 2009, you could have seen that Warren Buffett's Berkshire Hathaway (NYSE: BRK-B  ) was buying shares of Wells Fargo (NYSE: WFC  ) and Wal-Mart (NYSE: WMT  ) , both of which have since surged. You could have known that David Einhorn had been selling his stake in Apple (NASDAQ: AAPL  ) in the middle of last year, just before shares began to stumble. These 13-F forms are a legally mandated fly on the wall in the minds of the world's greatest investors.

And no one should feel shame copying investors' trades. Last month, I sat down with Mohnish Pabrai, a great investor himself, who told a story about having dinner with Charlie Munger. Warren Buffett's right-hand man told Pabrai that one of the keys to successful investing is to "carefully look at what the other great investors have done."

Here's what else Pabrai had to say on "shameless cloning" (transcript follows):

Mohnish Pabrai: What can I tell you? I am a shameless cloner. I have no original ideas. I don't even know why you're interviewing me, because there are all the other great minds that I've copied everything from, and very few things emanate from between my ears, but I'm good at absorbing some good things when I can see them. So I think that's one of the beautiful things; God bless the SEC for their 13-F requirements. And every time -- in fact, Nov. 14 was the last time when the 13-Fs came out -- you know, I'm like a pig in [%&*!]. It's just great, because there's so much to look at. That keeps me busy for a few weeks, and then the next 13-Fs come out.

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 14, 2013, at 8:07 PM, famiglia112 wrote:

    Morgan,

    First of all, I must say, these "shorts" interviews are priceless, perhaps collectively my favorite thing on The Motley Fool, yet. Thank you so much for posting them. Is there a URL somewhere on this site, youtube, or elsewhere that I can conveniently view all of them in one place?

    As for this video, is there a resource where I can peruse a large number of 13-Fs? Obviously, they must be available via the SEC, but I suspect that would require knowing precisely what you are looking for. If no such resource exists, do you (or other Fools) have a list of major investor's who we should follow? That way I could just look up the filings on my own via an Edgar search.

    Thanks.

  • Report this Comment On January 14, 2013, at 10:28 PM, TimKnows wrote:

    So glad he got out of Apple, I shorted it at the phone launch and its nice to know big money saw the weakness in this company too.

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