How to Be a Maverick

Webster's defines a maverick as "an unbranded range animal." Since Lee Ainslie and his associates at Maverick Capital may not care for that comparison, let's move on to definition No. 2: "an independent individual who does not go along with a group or party."

That's the one we're looking for, and it's reminiscent of a similar slogan we saw yesterday in my look at Fairholme Capital.

Now, admittedly, I only learned about Lee Ainslie and Maverick Capital about a year ago. Still, his approach resonated with me after reading an interview from last spring.

Maverick's 13-F filing, the quarterly report of holdings that firms send to the SEC, is out, and I've been eager to see what I'll find. I wasn't disappointed. In fact, there were plenty of changes, as you can see below.

Who cares about the additions and reductions in the portfolio this quarter? You should -- if you think Maverick's onto something with its approach. Ainslie has been bringing in plenty of new faces and cutting out a few as well. So let's dive in.

Come on in!
Two giant technology firms, data-storage expert EMC and networking titan Cisco, made the grade at Maverick last quarter. With the firm making these purchases at some point between April and June, we can see from their charts that they've been good buys so far.

Will the good times last? Fellow Fool Rich Smith seems to have had a change of heart about EMC's future after digging into its latest quarterly numbers. The CAPS community also sees good things for the company, giving it a four-star rating, out of five.

Lots of Fools absolutely hate Cisco. Much of that ire stems from the company's use (or abuse?) of its stock-option program. But if CAPS is any indication, the tide has turned. The stock now has a five-star rating, and lots of CAPS contributors talk about new products, new growth opportunities, and a cheap stock price. It looks like Maverick sees the same things and more with its new position.

A quick look at CarMax's chart shows frequent starts and stops over the past year. That can be hard on the brakes, but it can give an opportunistic value investor the chance to get a great company at a great price. During the time when Maverick was buying, the price was low. And now that it's a bit lower, I wonder if they will be buying more of this Motley Fool Inside Value selection.

I'm no insurance expert by any means, but Marsh & McLennan grabbed my attention for one reason: Maverick's buying is the complete opposite of the other maverick, Fairholme Capital. We'll see who ends up on the best side of those trades.

Get outta here!
Investors can sell for many reasons: because a company is overvalued, for example, or because there is a better opportunity for the capital. With TD Ameritrade finding the end zone recently, Maverick's decision to move it out of the portfolio is a bit of a mystery. Still, the firm appears to have taken its ball and gone home at just the right time.

Brazilian metal and mining company Companhia Vale do Rio Doce has been on a tear lately. The CAPS community sees nothing but blue skies with a five-star rating for the company. Is that the perfect time for a maverick to look for new opportunities?

According to past filings, Maverick has been gradually unwinding its stake in AutoZone. Not coincidentally, that comes at a time when the stock's price is increasing. One Fool warned of some dangers; I'm guessing that Maverick sold before having to make any repairs on its impressive gain.

The Foolish bottom line:
It's good to study what great fund managers are doing, and the 13-F is a great source of data. Remember, it's not about copying; it's about stealin'. After all, positions can change quickly. But by studying great investors' philosophies and then looking at their decisions, we can become better investors in the process.

The Motley Fool's Inside Value newsletter looks for the best companies at the best prices. To see how lead analyst Philip Durell outperforms the market using this strategy, sign up today for your free 30-day trial.