Every quarter, fund managers have to disclose what they've bought and sold. Their latest moves can shine a bright light on smart stock picks.
Today let's look at investing giant Seth Klarman, who founded the Baupost Group hedge fund company back in 1982. Klarman is a successful investor with a lot to teach us. He sticks to his value-investing principles so much that at times he has a large chunk of his assets in cash, not finding sufficient bargains.
Why should you look at Baupost's moves? Well, according to the folks at GuruFocus.com, it has averaged gains of close to 20% annually since its inception, far outstripping the S&P 500.
Baupost's stock portfolio totaled $3.3 billion in value as of Dec. 31, 2011, with just 23 holdings. The top three holdings, making up fully 44% of the portfolio's overall value, were BP
So what does Baupost's latest quarterly 13F filing tell us? Here are a few interesting details:
The only new holding is the small biotech company Targacept
Baupost upped its stake in NovaGold Resources
Among the stocks that Baupost cut its exposure to were BP and PDL BioPharma
And finally, Baupost sold out of only one stock during the quarter -- BreitBurn Energy Partners L.P.
We should never blindly copy any investor's moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing. 13-F forms can be great places to find intriguing candidates for our portfolios.
Looking for promising investments? Check out our free special report -- " The Stocks Only the Smartest Investors Are Buying " -- and learn which stocks are appealing to Warren Buffett and other great investors.
Longtime Fool contributor Selena Maranjian, whom you can follow on Twitter @SelenaMaranjian, owns shares of PDL BioPharma, but she holds no other position in any company mentioned. Click here to see her holdings and a short bio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.