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, last 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 again at Prem Watsa of Fairfax Financial, the "Canadian Warren Buffett." When we last looked at Watsa's portfolio, he had changed his focus to include consumer goods, perhaps in the belief a recovery was on the way. Let' see how he's changed directions again.

Fund: Fairfax Financial          
No. of Stocks Owned: 42
Top 5 Holdings: Johnson & Johnson, Dell, International Coal, Kraft, Frontier Communications
Top Sectors: Health care, technology, telecommunications, basic materials, financials.

Like a number of the investing legends we've looked at, Watsa has a diversified portfolio, but we see that he's pared back investments in financial stocks. Where they once accounted for more than a quarter of his portfolio, he's dramatically scaled back his holdings in US Bancorp (NYSE: USB) and Wells Fargo (NYSE: WFC), so that financials now represent a little more than 10% of his holdings.

He also eliminated his positions in utility stocks, selling out his holdings in PPL (NYSE: PPL) Xcel Energy (NYSE: XEL), and Duke Energy. Interesting, since last week we saw that Mario Gabelli was adding utilities to his portfolio, such as Duke and Southern. So let's take a closer look at two of the stocks he did buy to see what CAPS members have to say them.

Source: GuruFocus and Motley Fool CAPS.

Price is what you pay
Women's health care device maker Hologic is representative of the type of health care company Watsa sees as growing its business. With operations in mammography, cervical cancer screening, gynecological products, and bone density, Hologic is an industry leader, though its various specialties face competition from some tough rivals like C.R. Bard and Johnson & Johnson.

The risk to the field comes from hospital and doctor reimbursement rates set by the federal government, which are scheduled to be decreased in the aftermath of the passage of health-care reform legislation. Since that's something that is an industrywide concern and not specific to Hologic, it probably helps explain why 97% of CAPS members rating the device maker believe it will still screen higher than the market.

You can let us know on the Hologic CAPS page whether the prognosis for the women's health care field is bright.

Tunneling down to growth
Everyone might be talking about the Verizon iPhone release, but it's really an underwhelming achievement, at least by Apple (Nasdaq: AAPL) standards. Since it's essentially a 3G phone, there's little incentive to rush out and get one before the iPhone 5's release later this year, and that ought to give BlackBerry maker Research In Motion the opportunity to continue building up its own advantages.

It shipped 14.2 million units last quarter, surpassing even Apple's iPhone 4 high water mark, and expects to ship an additional 15 million units for the fourth quarter. For a company that's been written off as dead so many times, it's a fairly singular achievement.

While CAPS member madmork thinks a lack of suitable apps will hamper RIM's growth, more than 4,400 others (or 82% of those rating the phone maker) believe it can still dial up market-beating results.

You can add RIM to the Fool's free portfolio tracker and then head over to the Research in Motion CAPS page and add your own opinions to the party line.

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.