Invest With the Masters

Scraping together enough coin to win the annual luncheon auction with Warren Buffett is probably beyond most investors' means. With the proceeds going to charity, this year's winning bidder forked over $2.63 million for the privilege.

Feast or famine
While we likely can't afford to break bread with the greats, we can peek at their stock ideas through their SEC filings. Here, we'll pore over some of the top investors' reports to see which stocks they've chosen as their best investments. We'll then check in with Motley Fool CAPS members to learn whether they agree.

First, a few caveats ...

• There's a delay between when the stocks were bought and when these investors filed their paperwork, so they might have sold out since.
• These legends may be hot investors now, but that can change in an instant. Bill Miller was a wunderkind after 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
Fools should definitely do their own further research here. But in the meantime, let's take a look once again at well-known but controversial investor George Soros, chairman of Soros Fund Management, and a political provocateur underwriting a variety of causes that make him the target of some extreme partisan vitriol.

Fund: Soros Fund Management
No. of Stocks Owned: 823
Top 5 Holdings: SPDR Gold Shares, Monsanto, InterOil, Plains Exploration & Production, Emdeon
Top Sectors: Oil & Gas, Basic Materials, Technology, Health Care

While you might not agree with his politics, you can't argue with his investing acumen. Let's look closer at a few of his most recent choices below.

Source: GuruFocus and Motley Fool CAPS.

Price is what you pay
The ability to capture more of the market while putting pressure on rivals has been a hallmark of Akamai Technologies, which has taken the competitive game to new levels against Level 3 Communications (Nasdaq: LVLT) and neutralized the advantages Neutral Tandem has brought to bear. That's allowed the market to price Akamai accordingly; its shares, which have doubled so far this year, now trade at a fairly rich premium.

Standard & Poor's thinks Akamai's smart expansion efforts have nonetheless left its upside a lot smaller than it once was. It downgraded the stock to a sell, but the analysts at Oppenheimer & Co. say S&P is undervaluing the growth potential Akamai still has. Oppenheimer believes that i's earned that premium it carries, and they think Akamai will still outperform the market.

Up in lights
And at 43 times forward earnings estimates, Netflix seems to sport a rich premium, too, but it owns the DVD movie rental market now in light of Blockbuster's bankruptcy filing. Redbox from Coinstar (Nasdaq: CSTR) is more of a supplemental peer to a Netflix subscription, filling in the blanks while you wait for the next DVD to arrive, and it hardly seems capable of supplanting its bigger rival.

Now, Netflix has its eye on competitors offering streaming video, which is why a "streaming only" subscription is in the works. It's a matter of time before video-on-demand is the dominant offering and Netflix has been bulking up its movie inventory for awhile in preparation for that eventuality.

ChuckWoolery admits he was premature in expecting Netflix to plateau, but he's back in expecting additional gains now:

A vice grip on the dvd/streaming media market. I sold my shares earlier this year thinking it would plateau but i was wrong. Good news almost every week with expansion into other countries and now phasing out dvd delivery will increase their margins. Despite the high P/E, it is worth picking up on a correction.

A sporting chance
And since we're looking at valuations, get your hanky ready for a trip to the nosebleed section at VMware, where its stock trades at 145 times trailing earnings and 50 times next year's estimates. But with storage being hot right now, and the "cloud" just really becoming a force to reckon with now, an argument can be made it can still justify such high premiums.

VMWare is teaming up with companies like Hewlett-Packard (NYSE: HPQ) and Verizon (NYSE: VZ) to make cloud-based computing easier and more secure. CAPS member coolhandluke070 says VMWare is controlling all the threads in the field.

Centrally locating it on a server and being able to access it remotely is ideal for changing landscapes of business is preferred. In conjunction security software firms will also reap the benefit. Security will be an issue if we are to entrust our documents to the "cloud."

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.