Hedge Fund Letters Are Required Reading
The Dynamic Wealth Report
February 8, 2011
by Corey Williams, Editor
If you’d like to become a better investor, study the best investors.
And in just a second I’ll reveal some of the sources I use to study up
on the world’s greatest investors.
First off, as far as I’m concerned, checking in on the likes of Warren
Buffett, George Soros, and John Paulson should be mandatory for any
individual investor. Look, these guys are the best of the best for a
reason.
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They know how to make a ton of money investing in the markets.
What’s more, when it comes to investing, there’s no sense trying to
reinvent the wheel. These guys willingly spill their investing secrets
in a different book every few years.
It’s really amazing how many books there are on these guys.
Just try searching amazon.com for books about any of these investing
icons. Warren Buffett alone has more than 550 search results!
Here’s the good news…
Tracking down the latest info on these guys is a whole lot easier today.
Websites like gurufocus.com do all of the heavy lifting for you. You can
easily track down just about any stock investing guru’s current
portfolio. You can also see what stocks they’ve bought and sold lately.
A guru’s holdings provide a good starting point for your research. But
just knowing their stock holdings isn’t the holy grail of investing.
I think it’s much more valuable to know why they’re buying or selling
certain stocks. And there’s no better place to get an idea of what
they’re thinking than their shareholder letters.
You see, these billionaire investors aren’t just investing their own
money. They’re managing money for other top 1% of the food chain
investors. But just because you don’t have millions of dollars invested
with them doesn’t mean you can’t read their shareholder letters!
Some shareholder letters like Warren Buffett’s are easily found. He runs
a publicly traded company, Berkshire Hathaway (BRK-A). His shareholder
letters are posted right on the company website.
But it’s not always so easy to track down the shareholder letters for
non-publicly traded hedge funds. For those, I turn to
hedgefundletters.com. This simple and straight forward website is a
great resource for tracking down hard to find shareholder letters.
As you might imagine, there are quite a few hedge funds. And more than
enough shareholder letters for you to spend days reading… So, here’s my
top pick if you’re only going to read one.
John Paulson of The Paulson Funds…
Simply put, Paulson’s funds are on fire. His funds are racking up
accolades and awards at an astounding pace.
You may have heard of him as the guy who made billions betting on the
collapse of the mortgage credit markets. Or as the guy who called the
huge rally in gold last year.
The point is Paulson’s been spot on with his call on a number of markets
over the last several years.
Here’s what he’s saying right now…
"…Going forward the highest returns will be in restructured equities,
mergers and acquisitions, and event arbitrage… This is the part of the
cycle where we want to have long event exposure and do not want to be
under-invested."
In other words, you need to be invested in stocks right now.
One area in particular he’s bullish on is the financial sector. That’s a
complete 180 from his take on financial stocks a few years ago.
Clearly, Paulson sees good reasons to invest in financials. You don’t
make a bold call like that without strong evidence.
The best part is the recovery in financial stocks still has a long way
to go. There’s still time for you to grab your share of the profits. Simply follow the lead of today’s hottest hedge fund manager.
Right now some of Paulson’s top financial holdings are Bank of America
(BAC), Citigroup (C), Hartford Financial Group (HIG),
SunTrust Banks
(STI), and Capital One Financial (COF).
And for more hedge fund inspired ideas, remember, you can find the latest
shareholder letters at hedgefundletters.com.
The IPO market will see another private equity backed deal this week. Last month private equity backed Nielsen Holdings (NLSN) raised $1.89
billion. Now Kinder Morgan is looking to top that with the largest private
equity backed IPO ever. It’s expected to raise $2.3 billion.
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