And we've got it! 77 Q4 2022 held investment reports from superinvestor funds. What did the best of the best in this market invest in and walk away from, and what can we learn from this?
First, the highlights
The 13F report is a form that investment funds in the United States must file if they control or manage assets of $100 million or more. Form 13F contains information about investments in individual listed companies, including the number of shares and the value of those investments at the end of each quarter. This information is publicly available.
The most frequently held companies currently in superinvestors' portfolios are: Google (Alphabet) - as many as 31 times, Microsoft (Microsoft) - 30 times, Meta Platforms (Facebook) - 25 times, Amazon.com (Amazon) - 24 times and Visa (Visa) - 24 times.
We have already had the opportunity to discuss the portfolios of George Soros and Warren Buffett. This time, however, let us look at their activities collectively.
The most frequently bought companies
By far the most frequently bought company was e-commerse giant Amazon.com (Amazon), which was snapped up by as many as 15 super-investors. This seems interesting particularly given the problems of the consumer goods sector, which seems to be particularly negatively affected by the economic slowdown and high interest rates. Amazon currently accounts for 1.62 per cent in the value of all superinvestor portfolios.
Source: Conotoxia MT5, Amazon, Daily
The second most bought company was technology giant Meta Platforms (Facebook), which was acquired by as many as 13 super-investors in Q4 2022. Following problems with its - seemingly misguided - investment of more than $13 billion in the Metaverse, the company announced a 13 per cent job cut. The cost reduction may have improved investor sentiment, as the company's shares, after falling as much as 78 per cent, have now rebounded 122 per cent from the bottom. Meta accounts for 1.31 per cent of the value of all superinvestors' portfolios.
Source: Conotoxia MT5, Facebook, Daily
The third most bought company was another tech giant that has recently become famous for its investment in artificial intelligence - Microsoft (Microsoft). It was bought by as many as 11 of the super-investors. The company is now the largest position among all funds, accounting for as much as 2.36 per cent of their portfolios.
Source: Conotoxia MT5, Microsoft, Daily
In fourth place was Microsoft's biggest competitor, Google (Alphabet), which appears to be focusing on creating a tool such as ChatGPT. The company was bought by nine super-investors in the last quarter of last year, and its shares accounted for 1.52 per cent of the value of funds' portfolios.
Source: Conotoxia MT5, alphabet, Daily
The most sold companies
Interestingly, the most sold company turned out to be the previously mentioned Microsoft. It was sold by 14 super-investors. The largest buyer was Daniel Loeb (Third Point fund), who increased the company's stake by 4.75 per cent of his portfolio, and the largest seller was John Armitage (Egerton Capital fund), reducing the company's stake by 5 per cent of his portfolio.
Ex aequo with Microsoft was the world's largest payment service provider, Visa (Visa), also sold by 14 super-investors, with only four of them buying its shares. Viking Global Investors fund bought the largest stake, accounting for 0.46 per cent of its portfolio value, while Lee Ainsile (Maveric Capital fund) opted for the largest sale with 1.32 per cent of its portfolio value. It appears that the reluctance to buy the company may be linked to expectations of reduced consumer activity in the coming quarters.
Source: Conotoxia MT5, Visa, Daily
In third place were Google shares sold by 12 of the super investors. China's Li Lu (Himalaya Capital Management fund) seems to be by far the most optimistic about the company's future. He increased the company's stake by as much as 7.3 per cent of the value of his portfolio. The biggest pessimist, on the other hand, was Josh Tarasoff from the Greenlea Lane Capital fund. He reduced his position in the company by 2.2 per cent of the value of his portfolio.
What conclusions can we draw from this?
Based on the investments of all super investors, it is therefore difficult to identify the best and worst assets. This may be due to the fundamental issue of different investment styles and strategies. Therefore, drawing conclusions from the investments undertaken should be preceded by an understanding of the style of the fund in question and its assumptions for entering and exiting positions.
Grzegorz Dróżdż, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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