Billionaires reveal their top stock picks.
At the end of each quarter Wall Street's biggest fund managers have to lay out their equity holdings in what's known as a 13F form. By examining the top stocks in various legendary investors' portfolios, investors can glean valuable information. The 13F has its limitations; since it doesn't reveal short positions, certain derivative contracts or fixed income, it's hard to see the overall strategy. Also, since 13Fs are due within 45 days of the quarter's end, they're not up to the minute. Still, some insight is better than none. Here are 10 legendary Wall Street fund managers, all managing billions of dollars, and what they recently considered the top stocks to buy.
George Soros, the octogenarian Hungarian-American billionaire, is known as one of the world's foremost macroeconomic thinkers -- and he's made a fortune doing exactly that. In 1992, he earned his nickname, "The Man Who Broke the Bank of England," by viciously shorting pound sterling and allegedly making $1 billion in a single day. Now structured as a family office, Soros Fund Management's three biggest stock holdings account for more than $1.2 billion of the $4.4 billion equity portfolio.
Total 13F holdings: $4.37 billion
Top 10 holdings concentration: 50.9 percent of total portfolio
Fund name: Soros Fund Management
One of the pioneering corporate raiders in the '80s, Carl Icahn is a Wall Street legend whose name still carries a lot of weight. With his own holding company, Icahn Enterprises LP, as his largest holding, he uses his vast resources and influence to build up a position in this or that company, lobby for board seats, changes, share buybacks and dividends, and then sell once he's made money. Icahn's favorite stocks to buy are often the ones he can influence.
Total 13F holdings: $22.66 billion
Top 10 holdings concentration: 92.8 percent
Fund name: N/A
Funnily enough, Icahn and Ackman famously came to proverbial blows; the Street wasn't big enough for both of them. Ackman felt Herbalife (HLF) was a pyramid scheme, shorting over $1 billion in shares, while Icahn gleefully bought a huge stake. Ackman recently admitted defeat and covered the short. Once considered one of the best investors in the world, Ackman's recent losers -- J.C. Penney Co. (JCP), Valeant (VRX) and Chipotle Mexican Grill (CMG) -- certainly haven't been good stocks to buy.
Total 13F holdings: $5.87 billion
Top 10 holdings concentration: 100 percent
Fund name: Pershing Square Capital Management, L.P.
Hedge fund manager John Paulson leapfrogged to fame during the Great Recession as his aggressive bets that the economy would collapse made him and his investors billions. Using then-obscure financial instruments known as credit default swaps, he personally made about $5 billion as the mortgage market disintegrated. Paulson hasn't been as successful plucking the best stocks to buy, and since 2011 his 13F holdings have lost more than 80 percent of their value.
Total 13F holdings: $5.12 billion
Top 10 holdings concentration: 66.8 percent
Fund name: Paulson & Company
David Tepper's brand has bulged with his pockets, and his hedge fund, Appaloosa Management, is one of the most prestigious in existence. An active portfolio tinkerer, Tepper has made massive adjustments to Appaloosa's portfolio since President Donald Trump's election, more than doubling its exposure to information technology, taking it from 17.9 percent to 45 percent, while reducing its energy holdings from 17.2 percent to 4.4 percent. His decision to double down on high-quality financial stocks in early 2009 earned his fund a cool $7 billion.
Total 13F holdings: $10.73 billion
Top 10 holdings concentration: 65.5 percent
Fund name: Appaloosa Management
Einhorn's star has been a rising one over the last decade, and like several others on this list, he made his bones when the rest of Wall Street was reeling: during the 2008-2009 financial crisis. In July 2007, he made a prescient call, shorting Lehman Brothers stock. At the time, it was a financial powerhouse. Fifteen months later, it would be insolvent, and Einhorn the talk of Wall Street. At 49, he's one of the hedge fund world's youngest stars.
Total 13F holdings: $5.5 billion
Top 10 holdings concentration: 77.4 percent
Fund name: Greenlight Capital
Steven A. Cohen
Steven A. Cohen was one of the top hedge fund managers in the world at one time. His firm, SAC Capital Advisors, got into hot water, paying a $1.8 billion settlement to the SEC as a result of an insider trading scandal in 2013. After being banned from managing outside assets, Cohen's back at it managing others' money in 2018, reportedly with twice as much leverage (8-to-1) as SAC last used. SAC was known for its exceptional returns and near-prescient timing.
Total 13F holdings: $23.17 billion
Top 10 holdings concentration: 13.5 percent
Fund name: Point72 Asset Management
Dan Loeb should be an extremely influential activist investor for decades to come. To do that, you have to be vicious, and Loeb certainly is. For this billionaire, his favorite stocks to buy have been beaten-down companies with incompetent management, ripe for a turnaround. In 2015 he used Third Point's capital to take a 7 percent stake in medical devices company Baxter International, and then promptly pushed for a board seat and a say in the next CEO. He got both, profiting handsomely.
Total 13F holdings: $13.86 billion
Top 10 holdings concentration: 59.6 percent
Fund name: Third Point LLC
Cooperman, 74, is a legend on Wall Street and has been plying his trades, if you will, since the 1960s. A Columbia MBA grad who worked his way up the ladder over a quarter-century at Goldman Sachs (GS), he retired from that life in 1991 to found Omega, where he's enjoyed a second enormously successful career. The biggest sector weights in Omega's current 13F portfolio are information technology, 28.4 percent; communications, 13 percent; energy, 11.5 percent; and materials, 11 percent.
Total 13F holdings: $2.67 billion
Top 10 holdings concentration: 44.1 percent
Fund name: Omega Advisors
Stanley Druckenmiller likes to trade -- and he tends to wager with a lot of chips or not at all. Druckenmiller had a prescient view of the best stocks to buy in 2017, betting big on huge gainers like Alibaba, JD.com (JD) and Electronic Arts in the first half of the year before slashing those positions by the fourth quarter. While Duquesne's returns were outstanding in 2017, Druckenmiller's strategy has downsides, too: higher short-term tax rates, growth stock volatility and more effort expensed.
Top stocks in portfolio: Microsoft Corp. (MSFT), Alphabet, Amazon
Total 13F holdings: $1.98 billion
Top 10 holdings concentration: 73.8 percent
Fund name: Duquesne Family Office LLC
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