You wouldn't know how crazy 2020 has been just by looking at the year-to-date performance of the benchmark S&P 500. Inclusive of dividends, the widely followed index has delivered low double-digit returns. This comes after losing 34% of its value in less than five weeks during the first quarter.

But not everyone is gung-ho about the eight-month-old new bull market in equities. Although many successful money managers have been investing in high-growth and innovative companies, recent Form 13F filings with the Securities and Exchange Commission (SEC) show that billionaires sold three skyrocketing stocks during the third quarter.

A businessperson pressing the sell button on a digital screen.

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Tesla Motors

You might be surprised to learn that the hottest auto stock on the planet, Tesla (NASDAQ:TSLA), was one of the most aggressively sold stocks during Q3. According to WhaleWisdom.com, 13F filers sold an aggregate of 87 million shares in Q3 from the sequential quarter, reducing their total holdings by 18.2%. This included Jim Simons' Renaissance Technologies, which sold almost its entire 5.5-million-share stake, and Two Sigma Investments, which shed 75% of its previous stake.

In hindsight, these sales haven't paid off. The announcement of Tesla's inclusion in the S&P 500 vaulted its market cap well over $500 billion. Then again, these billionaire money managers may have a valid point with their skepticism.

There's no question that electric vehicles (EVs) are the future of the automotive industry, and Tesla has clearly benefited from its first-mover status. Still, there are serious questions left to answer for a company valued at more than half a trillion dollars.

For instance, Tesla has yet to demonstrate that it can produce a generally accepted accounting principles (GAAP) profit entirely from selling EVs. The company has delivered nominal quarterly profits that have leapfrogged Wall Street's expectations, but they've been aided by selling hundreds of millions of dollars in emission credits to other automakers.

It's also unclear if Tesla can maintain its competitive edge when virtually every other major auto company is throwing billions of dollars at the development of EVs, battery technology, and autonomous driving. My personal expectation is that Tesla's battery edge will dwindle significantly over time.

Even pioneer CEO Elon Musk can be a liability, at times. Musk has occasionally drawn the ire of the SEC. He's also been known to overpromise and underdeliver on new product or technology unveilings. This isn't to say Tesla won't eventually release game-changing products and services, so much as to point out that Musk's timeline for bringing these products to market is rarely, if ever, met.

A physician administering a vaccine to an elderly woman.

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Moderna

Clinical-stage drug developer Moderna (NASDAQ:MRNA) is another company that billionaires chose to sell during Q3 -- and it's a move they likely regret, with shares up 700% on a year-to-date basis through Nov. 30. Overall, 13F filers reduced their holdings in Moderna by 14.6 million shares (6.7%) from Q2 2020. Renaissance Technologies dumped its entire 315,400-share stake, and Israel Englander's Millennium Management sold 87% of its holding (476,153 shares).

The buzz behind Moderna is the company's coronavirus disease 2019 (COVID-19) vaccine candidate mRNA-1273. In an interim analysis of a phase 3 study involving more than 30,000 Americans, Moderna's vaccine demonstrated 94.5% effectiveness, which was far higher than researchers expected. With a vaccine efficacy this high, there's a real chance of ending the COVID-19 pandemic within the next year, assuming regulatory approvals are granted in the U.S. and abroad.

Yet there are also many reasons to believe that COVID-19 vaccine stocks like Moderna have entered bubble or euphoria territory.

For one, vaccine developers are currently being valued as if efficacy will remain high, distribution will go off without a hitch, and people will gladly receive the vaccine. Yet history shows that not all vaccines succeed in clinical trials, equitable distribution challenges are common, and many people wait or refuse to get inoculated. A September survey from Pew Research Center found that only 51% of those polled definitely or probably would get a vaccine if it were available.

The other issue is that Moderna's annual revenue from mRNA-1273 is likely to settle into the $4 billion range. Biotech stocks are typically valued around 3 to 6 times their peak sales. Moderna's is currently valued at closer to 13 to 15 times peak sales. That makes it one of the most grossly overvalued biotech stocks, in my opinion.

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The Trade Desk

Finally, The Trade Desk (NASDAQ:TTD) had billionaire money managers heading for the exit during Q3. This high-growth software-as-a-service (SaaS) stock saw aggregate 13F ownership dip by 2.3 million shares, or 6.9%, from the sequential quarter. The most notable sale came from Jeff Yass' Susquehanna International, which lowered its stake in The Trade Desk by 38% (253,190 shares).

Billionaires who sold The Trade Desk are probably kicking themselves. Shares of the company are now up 247% on a year-to-date basis through November.

However, unlike Tesla and Moderna, The Trade Desk can potentially hang onto its ultra-premium valuation. This might seem surprising. The company's entire premise revolves around empowering businesses to create, manage, and optimize advertising campaigns over a cloud-based platform, and COVID-19 has clobbered advertising. Yet The Trade Desk has history on its side.

You see, periods of economic contraction and recessions are usually measured in months. Economic expansions and bull markets, on the other hand, often last for years. It's a simple numbers game that benefits long-term investors. We're in the midst of an economic recovery, so we could be looking at a multiyear expansion of digital ad spending.

The Trade Desk's cloud-based advertising solutions also appear to be hitting home on multiple content channels. Audio and mobile video spending grew approximately 70% from the prior-year period, with connected TV spending more than doubling. The Trade Desk's customers clearly value the platform's ease of use, analytics, and transparent pricing. 

The Trade Desk may never be a cheap stock, but it's demonstrated a competitive edge worthy of its premium valuation.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.