Fact #2: Academic studies from Harvard, Duke and NYU have shown that activist investors like Carl Icahn have produced an excess annualized return of 20% on average (i.e., the return above the S&P 500). So these studies show activists doing 30% relative to 10% in the S&P (during the period analyzed).

With that, when you see a top activist like Carl Icahn down on a stock, and the stock is underperforming the S&P 500, it presents a very intriguing opportunity — perhaps even a time to back up the truck.

This is the core strategy we implement in our Billionaire’s Portfolio service. We want stocks owned by the world best billionaire activist investors — particularly when they are down on them, and these stocks present an asymmetric risk/reward (little downside, a lot of upside opportunity).

Icahn is down more than 20% on his 6% stake in Transocean, as his average cost for Transocean is around $50. Transocean is down 19% year-to-date and is underperforming the S&P 500 by 26%.

Based on Icahn’s track record and the academic studies on the performance of activism, if Transocean fell in line with that history, we could see at least a 45% move for RIG, and that is assuming the S&P 500 returns zero.

Even better, you get to buy Transocean at a cheaper price than what Carl Icahn paid, and the stock has just formed a double bottom. You could pick the bottom in this stock.

Transocean recently reported better than expected earnings, but the stock has been weak due to a correction in oil prices — a move that is bucking the trend of rising geopolitical tensions (for the moment). Transocean has also recently declared its dividend, which always causes a high-yielding stock to temporarily sell off.

For a higher-risk way to play it, buying the Feb 2015 $40 call options for $2 could net you as much as a 600% return if Transocean goes up 45% by the end of February 2015. That’s $1,200 for every $200.

Will Meade
President of The Billionaires Portfolio

A new ETF was launched today that has a very similar name to our website and research.

Of course we at Billionairesportfolio.com like the strategy of following the smart money (the world’s best billionaire hedge funds and managers). In fact, we developed this process back in 2003 through our research at one of the top independent research firms.

The problem we have with the iBillionaire ETF is that the founder, Raul Moreno, isn’t a market professional but instead is a serial entrepreneur: tech today, finance tomorrow. With that, I am highly skeptical of his ability to construct a study with integrity and robustness that would lead to his claims. What are those claims? He claims on CNBC yesterday were that his “index” has outperformed the S&P 500 by 500 basis points (annualized) over the past eight years. To my knowledge, he created this index recently and cannot possibly claim a “return” over an eight-year history. Unless it’s an auditable return within the context of a money-management program, the performance claims attached to this ETF should be taken with a grain of salt (i.e., beware).

Yet I would be most concerned with the following:

1) iBillionaire includes George Soros in their index. This is ludicrous. Soros has been retired for over 10 years. His family office, managed by his son, is highly complicated, with assets spread across a variety of markets and themes. To piggyback his stock picks is of little value.

2) iBillionaire includes Richard Chilton in their index. Chilton is a relatively unknown “seed manager” who allocates money to hedge fund managers; the performance of his funds are average at best, and they own hundreds of stocks.

3) iBillionaire includes Bruce Berkowitz, the ex-stock broker who runs a mutual fund out of sunny Miami. Berkowitz imploded in 2011, underperforming the S&P 500 by a whopping 34 percentage points. We’re not sure he’s a guy you want to follow either. Berkowitz is not a billionaire. Though if you like Berkowitz and his investing style so much, you can simply buy his mutual fund, which has almost the same expense ratio as the iBillionaire ETF.

4) iBillionaire is basically an S&P 500 index clone. It holds only large-cap S&P 500 stocks, such as Apple, IBM and Coke — stocks that pretty much everyone already has in their retirement portfolio. So there is a very good chance you probably already own these stocks in your retirement portfolio or 401K, and you would just be duplicating your holdings by purchasing this ETF.

5) Also, according to my statistics, the iBillionaire Index has almost a 95% percent correlation to the S&P 500, so, again, you are basically getting the same exposure as owning the S&P 500 ETF ($SPY), except $SPY is 75% cheaper.

6) Lastly, and perhaps most importantly, the iBillionaire ETF has no track record, nor does its manager. At best, the numbers they promote are just a hypothetical backtested return with very little statistics given to validate it. At worst, those numbers could be completely made up, given there is no regulatory and auditing scrutiny given to the attributes of a newly created index.

In conclusion, the iBillionaire ETF looks like a passive way to get exposure to the biggest stocks in the S&P 500, with the wrapper of a hot, sexy concept (billionaires).

Will Meade
President of The Billionaires Portfolio (the first ever documented service that piggybacked the world’s best billionaire hedge funds and managers).
Billionairesportfolio.com

Trulia jumped 35% today and is up more than 50% over the last 2 months on rumors that the two top online real estate websites, Zillow and Trulia are going to merge.

You won’t find merger situations like this looking at charts, fundamentals or research reports. The best way you to predict which stocks will be acquired is by following the smart money, the world’s best billionaire investors and hedge funds.

Billionaire Chase Coleman and his Tiger Global Fund, probably the best technology stock picking hedge fund on the planet, owned almost 5% of Trulia. You could have piggybacked Tiger Global and purchased Trulia for $27 a share this year. That would have given you a double in less than five months.

At BillionairesPortfolio.com not only do we track every stock pick of the worlds best billionaire investors and hedge funds, but we only recommend them when they are selling at the same price or less than what the billionaire investor or hedge fund paid.

We have 20 stocks in our Billionaires Portfolio all owned by the worlds best billionaire hedge fund managers, all of which could be acquired for a 50% to 100% premium on any given day. To get a list of these stocks in our portfolio just click here.

Will Meade
President of The Billionaires Portfolio

You will never beat the stock market, unless you listen to this.

Even with more than 15 years of hedge fund experience, and a decent education, I would never invest a dollar unless I knew for sure that one of the top billionaire investors or hedge funds owned the stock. It’s just that simple.

I’m sorry to break it to you, but you can’t beat the market trading on news, or your stock broker’s latest tips, or following the latest musings on CNBC. It’s a good way to lose a lot of money, though.

There are only about 35 truly great investors in the world, ones that have consistently outperformed the market over the past 10-15 years. Some of these names you may recognize, like Carl Icahn, David Tepper, Dan Loeb and Warren Buffett.

So why make investing so difficult? Just simply invest with the best!

That’s what I do. I don’t own a mutual fund or listen to a financial advisor. I just buy what Icahn, Loeb or Buffett buys.

And I go one step further. Since I have actually traded for a multi-billion dollar hedge fund, and I know how hard it is to buy a big position in a stock, and how long it takes, I know the world’s best investors are patient and accumulate stocks on corrections and dips. That means, many times, I have a chance to pay the same price or better than what these billionaire investors and hedge funds paid. I call it, “buying a billionaire on a dip.”

It just makes sense, doesn’t it?

For example, let’s say I know one of the top billion-dollar activist hedge funds, which has averaged 30% a year over the past 15 years, owns 10% of a stock and is down on that stock. And I know this particular fund’s average holding period is two years. Why wouldn’t I want to own that stock?

It’s simple. It’s a statistical bet that puts the odds in my favor. And that is the formula for making money over time. Plus it lets me sleep at night knowing a big, influential investor is working relentlessly on my behalf to create value.

So I don’t throw darts. I don’t try to predict the future. I just bet alongside those that have a lot of money on the line, the power and influence, and a record of making a lot of money.

At BillionairesPortfolio.com, all we do is track the 30 to 40 best billionaire stock pickers, activists and hedge funds. And we look to get involved in stocks where we can pay the same price or less than they pay. Pretty simple, right?

Our stock picks gained 34% in 2013. And my studies of “buying the best billionaire investors on a dip” have shown this strategy would have made 31% over the past 12 years. That compares to a 6% return in the S&P 500.

Will Meade
President of The Billionaires Portfolio
Billionairesportfolio.com

Online Real Estate broker, ZipRealty, was acquired for a 122% premium today by Realogy, a real estate brokerage conglomerate. ZipRealty happens to be owned by two of the top small cap activist hedge funds in the world, Osmium Partners and Cannell Capital.

These two hedge funds own a combined 30% of Zip Realty and have been pushing for a change, including the option of a sale. With that, it was no surprise to us at Billionairesportfolio.com to see $ZIPR acquired for more than a 100% premium in one day.

In our premium research service, The Billionaires Portfolio, we own a stock in our portfolio that is controlled by the same small cap activist hedge fund Osmium Partners — the same investor that helped influence a 120% premium in ZipRealty.

Osmium owns almost 15% of the stock in our Billionaire’s Portfolio and in this case too, they are pushing for a sale of the company. We think this stock could be another Ziprealty, with the potential for a big take-out premium.

Will Meade
President of The Billionaires Portfolio

1) Mike Novogratz from Fortress is still bullish on Japan (and so are we at Billionairesportfolio.com) and Argentina, says that Argentinian stocks and currencies are a good bet because the current president is leaving.

2) Billionaire Leon Cooperman had 9 of his 10 stocks show a profit from last year’s conference so here are some of his picks: SandRidge (which we own in The Billionaires Portfolio)

3) Billionaire Stanley Druckenmiller goes for the throat in his criticism of the Fed’s low interest rates.
“I don’t know what it is in their forecasting record that gives them the confidence,” he says to a low gasp and some chuckles. (this is from a guy who dropped out of grad school in Economics at Michigan after one semester!)

4) Accel Partners’ Jim Breyer thinks three Internet companies could be trillion dollar companies in the next 10years: Google, Alibaba or Tencent. Mr. Breyer said he’d buy Alibaba for the right valuation.

Breyer sees a tale of two types of companies landscape right now. Start up/early seed valuations, he said, are very frothy but some will have huge takeouts by the big Internet companies like Google. Others in the consumer Internet space will just die if the big tech firms don’t want them. (exactly why I have been saying the best fund hedge to start today is a long short internet fund

5) Governor Christie tells you to short Tesla, $TSLA. Basically Tesla is in violation of New Jersey Automobile laws and they can no longer sell cars in the state.

6) Billionaire Hedge Fund Manager John Paulson and Larry Robbins both see M&A picking up, especially in energy and media. Paulson like Oasis Petroleum $OAS

7) Paulson is still bullish on the housing market. (He owns Realogy (RLGY) which I think is the best pure play on the residential housing market)

Peltz defends Activist Investing “He says that activists are helping companies and that he doesn’t agree with arguments they are too short-term. He says activists fix what’s wrong and work for all shareholders, even if they sell out” (which is exactly what we do at Billionairesportfolio.com coinvest and piggyback activist investors)

9) Lastly both Bill Ackman and Nelson Peltz agree that Carl Icahn is the world’s greatest investor, even better than Buffett(we have been saying this for years at Billionairesportfolio.com)

Will Meade
President of The Billionaires Portfolio

Everyone knows Carl Icahn is the world’s greatest investor, he has averaged 27% annualized returns for over 52 years, the greatest track record in the history of investing.

Icahn initiated a 6% activist position in Talisman Energy (TLM) last fall at an average price of $11.66. Today you can coinvest with Carl Icahn in Talisman at a 15% discount to what he paid for his 6% stake, as the stock is selling near support at $10 a share.

Talisman is an undervalued oil and gas producer that sports nearly a 3% dividend yield. Icahn has stated that he plans to have discussions with the management and the board of the company, about strategic alternatives including selling all or parts of the company.

By paying the same price or less for Talisman, you are getting to ride Carl Icahn’s Activism for free, and better yet you have a 15% margin of safety, as Talisman is currently selling at a price 15% below to what Icahn paid for his stake.

Coinvesting with the worlds greatest billionaire investors and hedge funds (like a Carl Icahn) is what we do at Billionairesportfolio.com. We are the first and only website that empowers the everyday investor to coinvest with world’s greatest billionaire investors and hedge funds.

When you pay the same price or less for the same stock that the billionaire investor or hedge fund paid, and sell when we find the big investors has sold, you can capture almost 98% of the actual gross returns of these top hedge fund managers and investors. And you can do this yourself, in your own TD Ameritrade, Schwab, Etrade account, etc. You can follow our lead and the lead of billionaire investors without the $5 million minimum and 2% and 20% fee structure normally required to invest directly with one of these top hedge funds.

Furthermore when you sign up for The Billionaires Portfolio you will get our handpicked portfolio of small cap and deep value stock picks owned by the world’s best billionaire investors and hedge funds, all of which could double or triple by the end of the year.

You will also receive weekly updates and analysis on the stock market and the economy mailed to your inbox from a top hedge fund trader and economist with over 30 years combined experience in the hedge fund industry.

Will Meade
President of The Billionaires Portfolio

Goldman Sachs, like them or not has the best research on the street, and they have published some very insightful studies and research pieces on options trading over the last 10 years. After reading literally thousands of research reports from Goldman Sachs on options, as well as working for a former Goldman Sachs Partner at a hedge fund, I have discovered some simple, yet rarely used techniques that could greatly improve your options trading.

1) Catalyst– The underlying theme of any research piece from Goldman Sachs on Equities or Options is that you must have a catalyst to invest. When you are trading options, especially when you are buying call options you not only have to know what the catalyst is, but also the exact date of when the catalyst will occur.

2) The Options Must be Cheap – Simply put the volatility of the stock’s options must be lower than its historical average or near its one year low.

3) Mean Reversion – Stocks that offer the most liquid options to trade are usually large cap stocks, (S&P 500 stocks) and these stocks are traded best using mean reversion. Meaning your odds are much higher for success when you buy a call option on a S&P 500 stock that is not only underperforming the S&P 500 but is also selling near its 52 week low.

Finding a call option that fits all of the above criteria is not easy, that is why good option trades are hard to find.

Right now though there is a stock, that has a huge catalyst occurring in September of this year, and the stock is not only underperforming the S&P 500 but is near its 52 week low as well. More importantly the call options on the stock are dirt cheap.

Today I can buy an in the money call option on this brand name multi-billion dollar market cap stock for just $2, and even better the option doesn’t expire until four months from now.

This brand name stock is also controlled by one of the world’s best billion dollar activist hedge funds (they own almost 6% of the company) and this billion dollar activist hedge fund is looking to replace the company’s board and ceo at their annual meeting in September, which is the catalyst that could reprice the stock 10% to 20% higher by October.

If this stock goes up 10% by October the call options could triple, if the stock goes up 20% by October the call options could return more than 500%

I know this fund well, my subscribers actually piggybacked one of this activist fund’s stock and options picks to a combined 200% gain last year.

This stocks is right at support and the call options will not stay this cheap for long, to get the name of the stock, the exact call option to buy, the name of the activist fund and the catalyst all you have to do is sign up for The Billionaires Portfolio and I will email you the options play immediately.

This Call Option which costs only $200 could not only pay for your subscription to The Billionaires Portfolio plus put hundreds of extra dollars in your pocket, but it gives you access to our portfolio of 20 stocks owned by the world’s best billionaire investors and hedge funds, all of which could double or triple by the end of the year.

Plus as a member to Billionairesportfolio.com you will get weekly updates on the economy and the stock market mailed to your inbox, by a top hedge fund trader and economist with a combined 30 plus years of experience in the hedge fund industry.

Will Meade
President of The Billionaires Portfolio
Billionairesportfolio.com

Did you realize that Warren Buffett returned 81% a year from 1980 to 2003?

Buffett accomplished this amazing feat by using a strategy called “takeover speculation.” He bet big, and with leverage, on stocks he thought had a very high likelihood of being acquired.

The average person on the street thinks Warren Buffett is a safe value investor who holds stocks forever. This is only partially true. The other half of his portfolio, and the part of his strategy that has juiced the biggest returns for him, was takeover speculation, where he used significant leverage and options to produce 80+% annualized for 24-years.

Buffett said in a New York Times interview that he made the greatest returns ever in his portfolio employing this takeover speculation strategy.

But Buffett ran into a problem. He became too big. He had to stop using this strategy because the assets he was managing, which in 2003 reached $50 billion, were too big to successfully execute it.

He said in a BusinessWeek article that he guaranteed he could make at least 50% a year if he were managing smaller assets. And he can back it up. We have documented proof from Berkshire Hathaway letters, and from an academic paper on Buffett, which showed that he produced an 81% annualized return over a 24-year stretch.

For those who are interested in what 81% annualized compounds to over 24-years, here are some scenarios:
1) A $1,000 account compounded at 81% for 24-years would turn into $1 billion.
2) A $10,000 account compounded at 81% for 24-years would turn into $15.2 billion.
3) A $20,000 account compounded at 81% for 24-years would turn into $30.2 billion.

Interestingly enough, Buffett’s strategy of takeover speculation is exactly the strategy we use at the Billionairesportfolio.com, and trust me it works.

We had two stocks in our portfolio acquired for a 65% and 82% premium in one day, and better yet we own a handful of stocks in our portfolio that we think could easily double on a a takeover. Takeover speculation works great in a sideways stock market like today, and its an absolute return strategy that does not depend on the stock market to make money.

Do not miss out on your chance to own stocks that could double overnight on a takeover, sign up today for The Billionaires Portfolio.

Will Meade
President of The Billionaires Portfolio