His fund has generated a 58% annualized return over the past five years.
And he did it during one of the worst stock market crashes in history. In 2008 when the S&P 500 lost 37%, his fund lost only 9%. When the stock market rebounded in 2009, his fund returned 264.38% versus a 26.46% return in the S&P 500. He beat the S&P 500 by more than 10 times. That year, he had 2 stocks that went up more than 1,000%.
To put a 58% annualized return in perspective, no other fund in the world has a better 5-year track record. This means over the past 5 years not one single mutual fund (over 18,000 funds) or a single equity hedge fund (over 4000 funds) has better performance.
Even though he is the best fund manager fund on the planet (literally he has the number one fund in the world), he has completely shunned publicity and has kept his assets base very small around $40 million. This guy is a purist stock picker. All he cares about is his performance not about selling his fund.
He went to Johns Hopkins University — my alma mater. And you might be surprised to learn, he has no formal training in investments. He worked in the medical research field his whole life but according to his colleagues his real passion was always investing. He started his fund in his early 40’s.
So how did he do it? How does he do it? He has a rather simple stock picking formula. He rarely buys more than 10 to 20 stocks in a year. His formula is so rigorous and selective that very few stocks meet his requirements. But he has more 100%+ winners than any fund manager I have ever seen.
As someone who has spent more than 15 years analyzing the world’s greatest hedge fund managers and billionaire investors, I have never seen a fund manager that has these stock picking abilities.
Because this fund manager is so reclusive and his fund is so small, information is hard to find on him. I spent over 100 hours analyzing and pulling up every document I could find on his fund, and researching and documenting every stock pick he has ever made. For my Billionaire’s Portfolio service, this is a new manager I’ve added as a candidate to our stable of the world’s best investors that we follow — even though he doesn’t fit my typical mold of the ultra-rich activist. He has a record of picking stocks that produce multiples on his investment, and that’s precisely what we look for in our portfolio.
Will Meade
President of The Billionaires Portfolio
Providing Sophisticated Hedge Fund Strategies and Analysis For The Everyday Investor
What continues to be one of the most obvious trades in the world, yet many investors are missing, is to short gold.
Today Morgan Stanley cut their price target for gold in both 2014 and 2015.
Earlier last week Goldman Sachs cut their price target.
Japan has come out and said they are selling gold and will continue to sell gold throughout the year.
Anyone long gold here is playing a fools game. Stocks are and will continue to be the only game in town. Holding gold or buying gold will only lose you money. It’s a QE fear trad — a hyperinflation fear trade. QE has come (three times) and now is nearing an end. Guess what? No inflation. Sell it now before you are selling it at pre-QE levels ($800).
So next time that gold newsletter huckster tells you gold is bottoming for the 8th time in the past year. Throw it in the trash. Pull up a gold chart from the mid 1980’s to late 1990’s. Gold gave you negative annual returns for almost 15 years. That’s like paying a tax, holding an investment that loses money every year.
The Biotech stocks in our Billionaires Portfolio have returned an annualized 129%. One of our biotech stocks up almost 270% and another biotech stock up more than 70% in less than 2 months.
These stocks have the ability to produce multiple returns, but they have little if any correlation to the overall stock market. Last week, the stock market had its worst one day performance since November. Yet, the biotech stocks in our portfolio gained on average 6% versus a negative 1.5% for the S&P 500.
In 2008 when the S&P 500 lost 37%, the small cap biotech sector actually gained a positive 9%. In 2011 when almost every fund lost money and the market was up a meager 3%, the biotech sector was up 10%. I have two top billion dollar biotech hedge funds in my database that have produced an average annualized return of 45% a year since 2002, without one losing year.
I honestly know of no other investment vehicle that can claim those results. Why? Because biotech stocks are the ultimate event-driven investment. It’s all about FDA approvals, results from clinical data and news of partnerships. That’s the driver and it can unlock value in a rising or falling stock market — it doesn’t matter.
The secret to investing in biotech stocks: follow the smart money. That is to only invest in the biotech stocks. You want the stocks owned by the world’s best billionaire biotech investors and hedge funds.
Will Meade
President of The Billionaires Portfolio
Providing Sophisticated Hedge Fund Strategies and Analysis For The Everyday Investor
Everyone knows Twitter (TWTR) has been one of the most volatile IPO’s in decades.
Twitter shares went public at $45, slipped to $40, and then went on a huge run $75 in less than a month.
Now TWTR has formed what traders call a bullish flag or pennant pattern. This pattern occurs after a huge run up in a stock, then the stock pauses and drifts down slowly, as the stock becomes oversold and buyers become exhausted.
The stock will complete the pattern if Twitter rises above $62.50. Once it moves above that price, it should rapidly back up to $75, the stock’s recent highs. Moreover, Goldman Sachs has just raised its price target on Twitter from $46 to $65, a 41% increase on 1/13/2014.
Everyone knows price targets are just made up numbers that analysts create. But the one important thing you should pay attention to when an analysts move their targets, is the percentage move in the price target. In this case, a 41% price target hike is huge move and is extremely bullish.
Now, Goldman is known to move stocks, especially the sentiment on a stock. And as I said, technically, I believe Twitter will trade back up to test its recent of high of $75 very soon, probably before the end of the month is over.
Will Meade
President of The Billionaires Portfolio
Providing Sophisticated Hedge Fund Strategies and Analysis For The Everyday Investor
If your sitting in cash and scared to come back into to the stock market, I have some advice for you.
Let’s be honest the markets have become complicated. The so called safe haven investments, treasury bonds and gold, lost 8% and 28% last year, respectively. And the stock market is sitting at all time highs making it more difficult to find value.
Even a bigger problem, interest rates and savings rates are so low that even putting your money in a savings account or a CD will still lose you money. Saving accounts, money market funds and CD’s are yielding less than inflation.
This environment is telling you, you must invest in stocks. But you can’t just buy some index fund or mutual funds that exposes you to potential losses of 20% to 30%. Instead you need to invest tactically in strategies that have good risk/reward profiles.
One of these low risk-high reward strategies is buying deep value stocks – but only when there is a catalyst in play.
Undervalued stocks are usually beaten down in price, selling at their 52 week low or even a 3 or 5 year low. They are usually selling at a discount to the value of their assets, their future cash flows or revenues and they have usually have a lot of cash.
Now, a catalyst is what helps reprice the stock and narrows the gap between the stock’s intrinsic value and its current undervalued share price. The strongest catalysts are when activist or influential investors own the stock and are pushing on the company and management to instantly create shareholder value by: 1) forcing them to buy back their stock, 2) sell some of their assets or 3) even sell their company. Other catalysts can be both significant insider buying and companies that have hired investment banks to help them find a buyer for their company.
When you combine these forces together, deep value stocks with catalysts, you get one of the strongest risk/reward investments out there.
Also for people who are scared to get back in the stock market these levels, these types of stocks should make you feel comfortable. You are buying stocks that are cheap in price, and you also have a catalyst present that can put a floor under a stock and begin pushing the stock higher. And that mix can quickly change investor perception surrounding the stock.
Will Meade
President of The Billionaires Portfolio
Providing Sophisticated Hedge Fund Strategies and Analysis For The Everyday Investor
I found that if I took a basket of the biggest and best billionaire activist investors and hedge funds (many of the names we follow in our service, The Billionaires Portfolio) and bought just the stocks they owned, whereby they had initiated an activist campaign against a company, that basket returned 31% annualized over the past 12 years. The S&P 500 returned just 6.1% in the same period.
This means a $20,000 investment 12-years ago, would be worth over $500,000 dollars today. The same investment in the S&P 500 would just be worth $40,000 today..
More importantly, the stock picks of these top activists had only one losing year during the period and that was of course 2008.
In 2008, the stocks in this basket of the top activists lost 18.2% versus a loss of 37% in the S&P 500. So in our study, these activist investors beat the stock market by more than 4 times on an annualized basis or nearly 23 percentage points. But they lost significantly less than the stock market in a losing year (in fact, a terrible year).
To put this return in perspective, no other mutual fund, ETF or private money manager on the entire planet has a returned anywhere close to 31% annualized over the period. The best performing mutual fund in the world returned 14.5%, which is not even half of the annualized performance of our basket. And that same mutual fund lost more than 45% in 2008!
Bottom line: By just following my Activist Select Strategy, you would have outperformed over 20,000 mutual funds, 5,000 money managers and 1,000 ETFs. And you would probably be considered the best investor on the planet.
Yet my next study has even better news. In my next study I took the same top Activist Billionaire Investors and Hedge Funds but this time I only tracked the performance of the activist stocks that fit the following criteria: 1) They had to be a small cap, meaning a market cap under $2 Billion and or 2) had to have a low share price under $15 combined with a market cap of at least $500 million and the results were astonishing.
The average annualized 12 year return for, what I call the Activist Small Cap Strategy, was an amazing 52% annualized over the last 10 years. Again this compares to only a 6.1% annualized return in the S&P 500.
Therefore a $20,000 investment in the activist small cap strategy would now be worth more than $3,000,000 million dollars today!
Let me repeat that, because I know it sounds too good to be true, but by only selecting the lowest priced and smallest cap stocks owned by the best activist investors and hedge funds $20,000 investment in 2002 would be worth more than $3,000,000 million dollars today. Of course these huge returns come with a more volatility, yet this activist small cap strategy still had only one down year (2008) over the last 12 years, another amazing statistic.
So there a couple of conclusions you should come away with from this study. First as I have told you before there is no more powerful strategy in the world from a risk reward perspective than piggybacking the stock picks of the world’s best activist investors and hedge funds. Secondly Activist investors do not need the stock market to produce these huge annual returns as proven above, even when the market went through a 10 and 12 year period of low to medium single digit returns, the stock picks of these activists still produced huge market beating returns of 31% to 52% a year!!
Will Meade
President of The Billionaires Portfolio
Providing Sophisticated Hedge Fund Strategies and Analysis For The Everyday Investor
Warren Buffett once famously said in a BusinessWeek interview that he could return 50% a year if he was managing less than $10 million. Moreover, he guaranteed he could do it.
So if you are not returning at least half of what Buffett said he could do on average, then you are failing as an investor – or your financial advisor/broker is failing you.
With that in mind, here’s my rant/advice. Make 2014 different …
First, fire your financial advisor, stock broker, financial planner or whatever they call themselves nowadays! Yes, I know it’s your golfing buddy, your neighbor, the dad of your kid’s friend, etc…
But let’s be honest, he lost you 40% to 50% of your money in 2008. And even more offensive, in one of the best bull market runs in decades from 2009-2013, I’m willing to bet he only returned you single digit annual returns. Consider this: Even the most basic low cost stock market index funds returned 14% a year annualized over the past five years.
How about 2013? A low cost stock market index fund returned more than 25% in 2013. Your account returned only 9% to 10%, right? Why? Because your broker/advisor diversified you into bonds and gold, which both produced negative returns last year. Worse, they had you in cash, all of which substantially ate away at your portfolios returns.
So quit paying thousands of dollars every year in fees on your account to someone who has failed you.
You paid this so called financial expert to help you beat the market and instead he just siphoned huge fees and commissions out of your pocket, while exposing you to above average risk.
Bottom line, no one deserves to get paid if they can’t perform. I don’t care what industry or profession you are in, when you don’t perform, you get fired. It’s that simple. I’ll let you in on a little secret. It’s not even their fault. It’s a business model that has been set up to use and abuse you. He is just there to sign up accounts. It’s highly likely he knows nothing more about investing than anyone else you pass on the street everyday. So get rid of your financial advisor and save yourself $3,000-$6,000 every year per $100k in assets.
Okay, so what do you do? Take control of your money. Open up an online brokerage account. You will pay cheap commissions — $5 a trade or less. Folks, it’s 2014! No one who has a computer, smartphone, iPad or laptop needs a guy down the street or a guy sitting in some call center milking them for fees and huge commissions on their investable assets. It’s not 1980, where you have to call your broker for a stock quote. Now you can watch your portfolio, get all of the information possible, and even buy or sell a stock right from your phone. Wake up and use modern day technology. Save yourself a bunch of money.
Will Meade
President of The Billionaires Portfolio
Providing Sophisticated Hedge Fund Strategies and Analysis For The Everyday Investor
What do Apple, Office Depot and Facebook have in common? I’ve used all three of these stocks in my stock replacement strategy.
My stock replacement strategy is a technique I use to get maximum leverage, while owning some of the greatest and highest potential stocks in the world. It allows me to purchase stocks like Facebook and Apple at 1/10 or 1/20 the price. That leverage makes gains of 100% or even 1000% possible.
Now, for those readers of my blog, you’ll remember this technique was taught to me early in my career by a former Goldman Sachs Partner and Harvard MBA, during my days trading for a top billion dollar hedge fund.
I just recently used this strategy to make a 90% gain in less than 5 months on Office Depot Call Options for my subscribers in my premium trading service, The Billionaire’s Portfolio.
We created The Billionaire’s Portfolio as a way for the everyday investor to use the same technique and strategies that the greatest and richest billionaire hedge funds and investors in the world use. And it has been a great success.
Why people fail trading options
Ninety-five percent of people who trade options lose money. This is not my statistic. This is an actual number from the option exchanges. This remarkably high losing rate comes as a result of people who do not understand how options work. You should only trade options when you have an edge. If you don’t have an edge, you are throwing your money away.
My stock replacement strategy gives you an edge every time you trade an option. Here’s how: I only take a position when I know that there is an event or an influential investor positioned to reprice the stock. I am not throwing darts. I am betting on highly probable events. Normally, I want to see several events/catalysts lined up, with the chance of altering the course of the stock, before my option expires.
When you combine my stock replacement strategy with event driven- activist investing, you greatly improve the success rate on an option. Just ask the customers of my Billionaires Portfolio service. If you want to learn how to trade options and stocks like the best and richest hedge funds/ Billionaire investors in the world, and if you want to learn about my stock replacement strategy, click here The Billionaire’s Portfolio.
Will Meade
President of The Billionaires Portfolio Providing Sophisticated Hedge Fund Strategies and Analysis For The Everyday Investor
12/23/13
U.S. stocks continue to print higher record highs. Yet one of the most widely held stocks in the world, Apple Inc. (NASDAQ:AAPL) remains significantly off of its peak value of $705 per share, reached in late 2012.
I have been an outspoken analyst on Apple. I’ve followed Apple closely since its revival in the early 2000s, when the large hedge fund I worked for as an analyst owned Apple shares under $10.
For those of you that don’t know me, my online portfolio, called The Billionaire’s Portfolio, is made available for subscribers to piggy-back the world’s greatest billionaire investors. The portfolio has beaten the stock market in 2013 and has produced three triple digit winners this year.”
Now, more on Apple …
I was very bearish on Apple in late February of this year, an unpopular view. Apple went on to drop 25% in the following two months. I then flipped the switch a month later and said the bottom was in. Apple shares were trading $433.
Now Apple shares trade back above $500 and despite the persistent strength in the broad stock market, investors seem to lack similar exuberance for one of the leading brands in the world. Of course, Apple leadership has changed, and it’s highly anticipated product roll-out reportedly failed to impress investors. So for the first time in a long time, there is growing scrutiny surrounding the future for the company and the outlook of its stock.
Contrary to that scrutiny, I have become quite bullish on the stock and below are eleven reasons why I think Apple will reach $700 in 2014.
1) “Apple is cheap relative to its historical valuation. Apple’s average 10 year P/E ratio is 17.5 times earnings. At 17.5 times earnings this would put the stock around $700 a share.
2) Technically, Apple just completed a major trend break on a weekly chart which projects a price target for Apple of $680 to $700.
3) Apple has a higher dividend (2.27%) than both the S&P 500 Index (NYSEARCA:SPY) (1.93%) and Dow Jones Industrial Average (NYSEARCA:DIA) (2.25%). Therefore Apple is not only a value stock but also an income stock as well.
4) The world’s greatest investor and activist, Carl Icahn owns 3.9 million shares of Apple, and will continue to push the company to create shareholder value by forcing Apple to buy more of its stock back or pay out a special dividend.
5) According to Research firm Bernstein: Value based mutual funds have been buying Apple at a record pace. Now 36% of value based mutual funds with assets over a $1 billion have a position in Apple. That’s a 40% increase from a year ago.
6) Wall Street loves Apple. Of the analysts that cover Apple, 72% have a strong buy on the stock.
7) 75% of Wall Street analysts are projecting Apple to beat earnings expectations in December. That tends to kick-start momentum in a stock.
8) Apple is significantly cheaper than the S&P 500 Index. Apple sells for 13 times trailing earnings and 10.9 times next year’s earnings. The S&P 500 trades at 18.7 times trailing earnings and 15.9 times next year’s earnings.
9) Apple is the most loved stock by the “smart money.” According to Citigroup, Apple is the most owned stock by hedge funds.
10) Apple represents more than 12% of the Nasdaq 100, yet is lagging the Nasdaq 100 by more than 28% year-to-date. Expect hedge funds to buy Apple and sell the Nasdaq 100 Index in search for this gap to close.”
11) Tapping into emerging growth markets, Apple with its announcement of its China Mobile deal today, will now have access to billions of new customers which should help the stock grow its revenues and earnings over the next year.
We have been telling our readers since November of 2012 to sell gold on every rally and buy stocks on every dip. And I called the bottom in Apple as well. Furthermore, our process of buying the dips on the world’s best billionaire investors and hedge funds stocks picks has rewarded our investors with stocks that have doubled and tripled, including one stock that we booked a 240% profit on in less than 7 months.
Will Meade
President of The Billionaires Portfolio Providing Sophisticated Hedge Fund Strategies and Analysis For The Everyday Investor
Looking for high potential stocks to put in your portfolio stocking for Christmas? Look no further than the retail sector.
In our research at billionairesportfolio.com we follow the moves of billionaire investors, and we tend to find them frequently involved in stocks that are beaten down and in need of a turnaround
Why do they like these stocks? Because these situations tend to have the following attributes: 1) the potential to return 100% or more inside of one year, 2) a catalyst present that can spark momentum in a stock, and 3) Wall Street sponsorship. And given the track records of the rich, influential investors that we follow, that proves to be a formula for consistent, market-beating success.
For the first time in a long time, expectations are for solid economic growth in the coming year (close to 3%). Right now, we are finding more and more names hitting our radar screen from the retail sector. Plus, given the trend of better data in the U.S., there’s a good chance we could see a positive surprise to that 3% growth number. Faster growth will improve the job market, improve confidence and bolster consumer spending. In this scenario, retail stocks will be among the biggest beneficiaries.
With this in mind, we ran the following screen on stocks in the retail sector, to find stocks that analysts think can double in the price in the next year. This screen can give us a starting point for identifying a situation where a billionaire investor is involved and pushing for a turnaround.
Here they are:
1) Wet Seal (WTSL) has a current share price of $2.58. The consensus analyst target price is $5.50. That gives us a “street projected return” of 113%.
2) Pacific Sunwear of California
(PSUN) has a current share price of $3.20. The consensus analyst target price is $6.50. That gives us a “street projected return” of 103%.
3) J.C. Penney (JCP) has a current share price of $8.32. The consensus analyst target price is $18. That gives us a “street projected return” of 116%.
4) Francesca’s Holdings (FRAN) has a current share price of $17.64. The consensus analyst target price is $36. That gives us a “street projected return” of 104%.
5) American Apparel (APP) has a current share price of $1.05. The consensus analyst target price is $2.50. That gives us a “street projected return” of 138%.
To learn more about high potential stocks owned by billionaire investors you can follow us at billionairesportfolio.com.
Will Meade
President of The Billionaires Portfolio Providing Sophisticated Hedge Fund Strategies and Analysis For The Everyday Investor
