The First and Only Site That Helps Investors Piggyback The Ideas of The World’s Greatest Billionaire Investors and Hedge Funds

3/31/2014

In an article this morning, Bloomberg reiterated what we have been telling people since 2002: Piggy-backing the picks of the world’s greatest billionaire investors and hedge funds is the best way to beat the market.

You can find the Bloomberg article here: Raiders-Turned-Activists Prove Boon for Stocks Beating S&P 500. Here’s the high level view: They cite a study that demonstrates the picks of activist investors have destroyed the S&P 500 with less risk over the past five years.

Interestingly, they mention one of the stocks we held in our portfolio last year (and consequently, our subscribers made nearly a 100% profit on). The stocks is Office Depot. We followed Starboard Value into ODP, also mentioned in the Bloomberg study. This investment played out brilliantly according to script. Starboard wrote an elaborate letter to ODP management at the outset of their campaign, laying out a game plan for unlocking value in the stock.

My partner and I have been piggybacking billionaire investors and hedge funds, specifically activist investors, in our accounts since 2002. We started our premium research service and website in 2012, giving average investors the opportunity to follow our lead. Join us!

Will Meade
President of The Billionaires Portfolio

Piggybacking The World’s Best Activist Investors has returned 52% Annualized over the last 12 years

3/27/2014

The Power of Activism

I want to show you what the performance has been on an equal-weighted basket of stocks looking back through history within the portfolios of our universe of activst investors. This is a deep-dive into the real, audited histories of the best investors alive. There is one condition: For us to include the stock, they must have initiated an activist campaign against the company.

Our basket returned 31% annualized over the past 12-years. The S&P 500 returned just 6.1% in the same period.

More importantly, the stock picks of these top activists had only one losing year during the year. Of course, that was 2008. But the basket lost just 18.2%, versus a loss of 37% in the S&P 500.

So these activist investors beat the stock market by more than 4 times on an annualized basis. But they lost less than half of the broader stock market losses in a bad year (an apocalyptic year).

No 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%. That same fund lost more than 45% in 2008!

Bottom line: As a basket, these select picks outperformed over 20,000 mutual funds, 5,000 money managers and 1,000 ETFs.

The Value of Small Stocks

Next, using the same universe of billionaire investors, I want to show you what the performance looks like when we narrow the universe of stocks by including just small capitalization stocks in the basket.

So we have scenarios here, historically, where our talented, influential investors have bought a controlling stake in a company. They have launched an activist campaign against the company. And in this case, the stocks meet these additional criteria. They have a market cap under $2 billion or they have a share price under $15 combined with a market cap of at least $500 million.

The average annualized return for the past 12-year was 52%. This compares to only a 6.1% annualized return in the S&P 500.

Takeaway: When our activist investors get involved in small caps, they get even more bang for their buck.

Biotech, Explosive Events

Now, lastly, we’ve had some great success early in the Billionaire’s Portfolio with our biotech picks. Novavax, our most recent high flyer has been a near triple for us.

As you’ve seen in our Billionaire’s Portfolio, biotech is a different animal. We follow domain experts in this area. We only want to piggy-back expert biotech investors around. Their brain is their edge.

By investing in all of the stock picks of our elite group of biotech hedge funds, you would have returned an incredible 44% annualized over the last 12-years. And guess what? They even made money in 2008!

Biotech stocks are the ultimate event-driven investment. They only move on news surrounding FDA approvals, positive trial data studies and partnerships with larger companies. These investments have little to no correlation to the overall stock market.

Billionaire’s Portfolio – The Optimal Portfolio

We’ve just walked through three historical studies on the universe of some of the best investors alive – digging through their real investments year in and year out. And we’ve seen three powerful results.

Given the numbers we’ve shown, you are probably wondering why we only returned 35% last year. Here’s why? First, remember we spent the first five months of the year building our portfolio out to full capacity (i.e. fully invested). With that, we held a lot of cash up to 25% for much of the first half of the year (certainly the first quarter).

Still, we beat the S&P 500 in a stellar year for the index.

But consider this: Believe it or not, activist investors had one of the worst year years in 2013 (compared to their history). Almost every one of the top activist investors in my study beat the S&P 500 every year since 2002. But in 2013, activist investors greatly underperformed the market, by as much as 15 percentage points.

So what does this mean? Within our universe of stocks, in our Billionaire’s Portfolio, we have shown an ability to select the high potential stocks that can become the big winners. And we do so by combining the three key approaches we outlined in our studies above. This, we believe, is the optimal portfolio.

Will Meade
President of The Billionaires Portfolio

Trade Like A Hedge Fund with this Pairs Trade

3/26/2014

Right now McDonalds (MCD) is extremely undervalued compared to its peer Burger King (BKW). Here are the statistics:

McDonalds: 6 Month Return 0.26% ROE 36% ROI 21% P/E 15 Dividend Yield 3.40%

Burger King: 6 Month Return 34.25% ROE 18% ROI 10% P/E 24 Dividend Yield 1.06%

Basically McDonalds is cheaper, has a higher dividend yield and double the profitability of Burger King yet Burger King has outperformed MCD by almost 35% over the last 6 months.

So how do you trade this, you simply go long and equal amount of MCD and short and equal amount of BKW. You can do this with stocks but a better play is to use options.

I would buy the May $97 MCD Calls for $1.10 a piece while simultaneously buying 2 May $25 BKW puts for $.55 cents.

Basically you would buy 10 May $97 MCD Calls for a total cost of $1100 and at the same time buy 20 May $25 Puts for $1100 dollars.

The catalyst that will reprice this trade will be earnings: McDonalds and Burger King both report earnings in late April.

It’s called a market neutral trade because you have zero market risk.

Will Meade
President of The Billionaires Portfolio

The Simple Truth To Becoming a Millionaire and Why You Won’t Become One!

3/25/2015

I am not a journalist. I have over 15 years of experience in the hedge fund industry working for a $1.5 billion hedge fund run by a former Goldman Sachs Partner/Harvard MBA and for an $11 billion hedge fund of funds.

Simply stated I have spent my entire career around the best investors and hedge funds on the planet. I know who they are and how they make money.

These top hedge funds and investors do not day trade, swing trade or stare at computer screens. That is an urban legend perpetuated by the brokerage houses to get you to trade as much as possible so they can get your commissions.

What the top investors and hedge funds do, is bet on sure things! They take controlling positions (5% or more) in undervalued companies and then push on these companies with all their force to create instant shareholder value. They do not throw darts or guess, they control their own destiny by putting their own people on the boards of these companies and then forcing these companies to produce positive returns in their stock.

So to become a millionaire or billionaire, you have to follow these rules:

1) Piggyback the best ideas of the worlds best billionaire investors and hedge funds! Why? Its simple, they have proven track records of making money and they already have researched the ideas for you. Before a top billionaire investor or fund takes a position they spend an average of $200,000 on research, consulting and legal fees!

2) Only piggyback funds and investors that have a proven track record of creating value in any market condition or economy. These Investors are called Activist, Event Driven or Private Equity investors.

3) Don’t blindly follow or copy the stock picks or ideas of any hedge fund or investor. I only piggyback the ideas/stocks of billionaire investors/hedge funds that have low portfolio turnover who hold their positions for at least a year and a half, so I know I am buying a stock they still own. It takes experience but I know which funds hold them and which funds fold them.

4) Keep your overhead low. Get an online broker with low commission rates, and do not trade actively. Not one billionaire investor or hedge fund I have ever worked with or met trades actively.

5) Never ever put your money with a stock broker or financial advisor. Simply put I have lived in 3 major cities during my career: Chicago, Washington DC and London and I have never met a wealthy person who follows or puts their money with a stock broker/financial advisor or mutual fund, those are rigged games(they win, you lose 100% of the time.)

What do the wealthy do?, if their rich enough they invest directly in hedge funds or private equity funds, if their smart and rich they do what I do, keep your overhead low, get an online broker and piggyback the best ideas of the world’s greatest billionaire hedge funds and investors.

6) Enjoy life, have hobbies, enjoy your time with friends and family but do not look at computer screens, CNBC or your portfolio every day. Trust me the wealthiest and best performing billionaire investors barely look at their trading accounts and positions once a day let alone once a week. Short term traders and day traders die early and broke. I promise you on this one, there is not one billionaire stock investor or hedge fund on the planet who stares at a computer screen all day.

7) Invest all your money in stocks, but keep a reserve in cash to add to positions. The stock market has averaged 9% a year since 1920, no other asset class in the world has averaged close to 9% annualized over the last 100 years.

8) Buy on dips and average down on your stock positions, that is the most common rule that the world’s greatest billionaire investors follow. Buffett, Icahn etc. all buy more of a stock when it goes down, its that simple. So keep cash and when the odds are in your favor and a stock drops add to your positions.

Will Meade
President of The Billionaires Portfolio

Coinvest with Starboard Value on their Darden Activist Campaign Using My Stock Replacement Strategy

3/25/2014

My favorite strategy I used when trading for a hedge fund was using call options to replace buying a stock. On large blue chip companies, you can find options that are extremely cheap and which move almost one for one with the underlying stock.

These options are deep in the money call options (usually with a delta above .80) and with an expiration that is less than one month out.

Right now Darden Restaurants (DRI) looks like an attractive stock to trade using my stock replacement strategy. If I wanted to buy 1000 shares of Darden it would cost me almost $51,000. But if I use my secret stock replacement strategy instead I can buy 1000 shares of Darden for just $3900.

The April Darden $47 Call Options trade for just $3.90, and with the stock priced at $50.71 that means these call options will move almost 1 for 1 with the underlying stock. Better yet I am paying only 19 cents (the options premium) to control 1000 shares of a blue chip company.

Even better if Darden hits $55 anytime over the next month I will make more than a 100% return on my money in less than a month.

Where else but the options market can you legally make a 100% plus return in less than a month on just a $4 stock move?

This is the power of the stock replacement strategy the ability to make a 100% plus return in less than a month and you wonder how people become Billionaires

Will Meade
President of The Billionaires Portfolio

The Average Stock this Hedge Fund Owns has Returned 115% and They Just Purchased 8% of This Stock

3/25/2014

There is an emerging small cap activist hedge fund that has been shooting the lights out. Their average return on a stock where they have won a board seat is 115%, let me repeat that every time this fund has invested in a stock and won a board seat the stock returned an average of 115%.

Even better the fund just won a board seat on a small cap technology stock that sells for less than $5. Furthermore this hedge fund owns more than 8% of this company and has been adding to its position as well.

So based on past history this stock should go up at least 115% or more.

Moreover the stock is so undervalued that it sold for $65 in 2008, more than a 1200% return from its current share price.

To find out the stock, the hedge fund and its performance data all you have to do is go The Billionaires Portfolio and sign up today.

Will Meade
President of The Billionaires Portfolio

The One ETF That could return 200% or more

3/25/2014

If you did not read my previous post about the world’s greatest investor, David Tepper, please do. In that post I explained how David Tepper has produced the greatest returns in hedge fund history, 41% a year for 21 years which would turn $10000 into $12 Million by simply using 3 rules for investing.

Tepper is a event driven distressed investor meaning he will only buy something that has a catalyst and has crashed in price.

Well right now there is a market that has both crashed and has a catalyst. It is China and Chinese stocks. Its simple David Tepper has stated in both the New York Times and Kiplinger’s that the key to his investing success has been following the moves of The Fed and Global Central Banks, its that simple. Remember Tepper is not your typical hedge fund billionaire-ivy league grad, he is a graduate of the the University of Pittsburgh, so my point is that anyone can do this.

And right now China is giving you the same signal that the US did in 2009-2010 with QE, they are about to launch a massive stimulus package which will boost China’s economy and stock market. Chinese stocks are cheap they have crashed more than 50% and now there is a potential catalyst that will boost this market back to its highs. This is a classic David Tepper play.

Tepper has made billions on plays like this, he purchased Argentinian Bonds, Russian Debt, Telecom Stocks and Banking Stocks all after they had crashed and there was a government mandated catalyst/policy move that told him these markets had bottomed.

Even better with the advent of leveraged etfs you don’t need a fancy prime brokerage account or margin account. You can simply buy the Direxion 3X Bull China ETF, Symbol YINN, (which gives you leveraged exposure to the Chinese Stock Market) and you can put on the exact same trade that top billionaire hedge fund managers use, like David Tepper.

Will Meade
President of The Billionaires Portfolio

How David Tepper became a Billionaire and How You Can Too!

3/25/2014

David Tepper is simply the world’s best investor, he has averaged 41% annualized for 21 years in his flagship hedge fund Appaloosa Partners. That means $10000 invested with David Tepper 21 years ago would now be worth almost $12 Million Dollars!

David Tepper is worth more than $8 Billion dollars and he is a completely self made.

Tepper did not grow up rich nor is he some fancy ivy league grad or rocket scientist phd, he has a degree from a state school the University of Pittsburgh.

Yet Tepper has beat the pants off every other single hedge fund manager in the world, even without the fancy Harvard of Stanford MBA.

He did this by following 3 simple rules:

1) Only buy stocks or asset classes when there is a Catalyst

2) Only by stocks or asset classes after a major sell-off, (this is called forced selling)

3) Look anywhere and everywhere for value across the globe, emerging markets etc.

This is the exact same philosophy we use at billionairesportfolio.com, where we only buy a stock, etf or asset class when there is a catalyst, we are deep value distressed investors, just like David Tepper, and we will go anywhere to find value.

Will Meade
President of The Billionaires Portfolio