Scraping together enough coin to win the annual luncheon auction with Warren Buffett is probably beyond the means of most investors. With the proceeds going to benefit charity, last year's winning bidder forked over $1.68 million for the privilege.
Feast or famine
So maybe we can't afford to break bread with the greats, but we can peek at their stock ideas through their SEC filings. What we'll do here is pore over the reports of some of the top investors and see which stocks they've chosen as their best investments. We'll then check in with Motley Fool CAPS members to see if they agree.
First, a few caveats ...
- There's a delay from when the stocks were bought and when these investors file their paperwork so they might have sold out since.
- And these legends may be hot investors now, but that can change in an instant. Bill Miller was a wunderkind for 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
So you should do your own due diligence, but in the meantime let's take a look at Prem Watsa at Fairfax Financial, who's been called the "Canadian Warren Buffett."
Fund: Fairfax Financial
No. of Stocks Owned: 37
Top 5 Holdings: Wells Fargo
Top Sectors: Financials, Information Technology, Health care
Like many of the investing legends we've looked at, Fairfax's portfolio is concentrated, so let's take a closer look at some of Watsa's top holdings and see what CAPS members have to say about them.
Price is what you pay
Perhaps it's not so surprising that an institution with "financial" in its name would be heavily weighted toward the financial industry. Its portfolio may be realizing significant benefits as bank earnings reports flow out this season showing reserves for bad loans were reduced. While Wells Fargo saw its provision for loan losses in the first quarter rise from the year ago period, they were down from the fourth quarter when management says the charge offs peaked.
CAPS member finalglide says that with the worst of the recession behind the banks, he's looking for Wells Fargo in particular to rebound this year.
Most of the bad credit has already been written off. Surprisingly strong earnings as the economy bounces back will lead to very strong price appreciation within the next year.
USB's retail and mortgage division is still heavily invested in toxic assets! The mortgage crisis is not even near to being over. They also have many in-house 2nd mortgages on the books that were done some years ago at 125% equity! They will take huge losses on these properties as foreclosures continue.
Information is power
With global PC shipments rising 20% in the first quarter, according to the market researchers at IDC and Gartner, the expectations is that Dell and Hewlett-Packard
Dell is a really well poised company ready to embrace, and profit off of, the changing technological environment of the world. In my opinion it is a safe choice to invest money in that will outperform the S&P 500, even if only by a small percentage.
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.