I came across an interesting investment strategy where you pick some successful investor (say Warren Buffett) and then you find out the stocks they are in and try to buy the same stocks at roughly the same price or even at a discount.

Link : http://thecrux.com/james-altucher-this-is-the-best-investing-strategy-ive-tried-and-ive-tried-them-all/

My question here is - Do you know of some way to know the price at which Warren Buffett bought the shares? (preferably at periods closer to the trade, unlike from the SEC filings which come out quarterly)

Alternatively, how would you go about implementing this strategy?

  • You sorta can't, unless the individual in question decided to publish their strategy... – keshlam Aug 20 '16 at 17:40
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    ... I think this is more wishful thinking than strategy. If course if they are running a fund, and are fully and exclusively invested in their own fund, you may be able to do this by buying shares of the fund... But that may not track their wealth since they are probably going to charge you for the privilage. – keshlam Aug 21 '16 at 15:16
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    I agree with @keshlam that if you want to mirror the portfolio of a successful investor, the only reliable way to do so would be to invest in a fund that they operate. Trying to purchase the shares yourself will not mirror their portfolio, as they will buy at one price, and you will buy at another. Keep in mind two things then - (1) as pointed out, they will charge you a management fee to participate in their fund, and (2) Being a billionaire, Warren Buffet has a different risk appetite than you. Therefore mimicking his exact strategy only works if you are as wealthy as he is. – Grade 'Eh' Bacon Aug 22 '16 at 13:38

What you have to realize is that people like Buffet generally don't go out and buy their entire position all at once. They often do what many other investors do - buy in the dips. In other words, they wait for drops as strategic opportunities to add to their positions, trying (when possible) to use dollar cost averaging. Buffett only has to reveal his trades when he acquires a certain percentage of a company's outstanding shares (5% I think?) because the SEC requires it. Otherwise you're going to read about it when he releases his own news or submits required filings that let you figure out what he's in.

Most of the time, by the time anyone really knows what someone like him is buying into, the market has already accounted for his trades by way of rising share prices when he buys and lower prices when he sells.

By the way, if you can figure out how to buy the same stocks as Buffet at the same price or less then that would really be something. He pays people an awful lot of money to figure that out for him now.

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