Invest Like a Pro

Imitation is the sincerest form of flattery, right? Well, when you're learning a new skill, imitation can also be a great way to hone your craft. If you're learning guitar, you might pick up a book of Jimi Hendrix's licks, or download the chords to a couple of Bob Dylan's songs. So when you're trying to become a better investor, it only makes sense to take a peek at what the pros are doing.

For Fools who lack the time or inclination to pick individual stocks on their own, Shannon Zimmerman at the Fool's Champion Funds newsletter has assembled a buffet of mutual funds that have collectively outperformed their benchmarks by more than 15%. Meanwhile, the rest of us can tune in directly to what some of the major funds are holding.

You see, the SEC requires institutional investment managers who manage $100 million or more to show their cards via quarterly 13-F filings. This week, I've dug in to look at some of the moves made by T2 Partners. To make things even more interesting, I've cross-referenced its stocks against the opinions of the Fool's CAPS community.

Below are three stocks that T2 bought more of between its March and June filings...

Stock

% Change in T2 Position

Current Market Value of T2 Position

CAPS Rating (out of 5)

Anheuser-Busch (NYSE: BUD  )

2,606%

$16.7 million

***

McDonald's (NYSE: MCD  )

80%

$4.4 million

****

USG (NYSE: USG  )

14%

$4.6 million

***

Sources: Capital IQ, Yahoo! Finance, and CAPS as of Oct. 15.

...and the only one in which the firm lightened its holdings:

Stock

% Change in T2 Position

Current Market Value of T2 Position

CAPS Rating

Western Union (NYSE:WU)

(100%)

$0

****

Sources: Capital IQ, Yahoo! Finance, and CAPS as of Oct. 15.

Now, before you make any hasty moves, remember that we're looking at what T2 has done in retrospect. For all we know, the firm has drastically changed its holdings in any or all of the above stocks since the last 13-F filing. With that in mind, here are some further thoughts to kick off your research.

Buy and hold means buy and hold
It may seem notable that T2 sold only one position its portfolio in the specified period. For many investment managers, churning as many stocks as possible practically seems like a job requirement. It's refreshing to find a firm that buys stocks for the long haul and uses its "sell" button sparingly.

Of course, maybe it shouldn't be so surprising; T2's portfolio manager, Whitney Tilson, is a certified Fool. Longtime readers may remember Whitney from such hits as "Traits of Successful Money Managers" or "Thoughts on Value Investing." A firm believer in value investing, Whitney is also a founder of the Value Investing Congress.

With that in mind, the decision to sell out of Western Union might seem strange. After all, the stock is a selection of the Inside Value newsletter, and it has a four-star rating on CAPS. In fact, many of the very best players on CAPS have been very positive on the wire-transfer company's prospects. CAPS All-Star carstenjansing called the company "THE brand in international transfer business and that business is stable as a tanker," adding that there's still plenty of opportunity for new investors to discover the stock.

So who's right here? Is T2 ahead of the curve in selling Western Union? Or is it still a solid stock? Hop on over to CAPS and share your opinion with more than 65,000 CAPS players. While you're weighing in on these stocks, you can also find out more about the 5,000-plus other stocks currently rated on CAPS.

More CAPS Foolishness:


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