Learning to spy on Buffett's briefcase and more.Surely every investor was interested in, where large funds or well-known professionals invest: Bill Gates, Warren Buffett, George Soros or Ray Dalio. You can find out all this and it is quite simple..
From the US Securities and Exchange Commission (SEC) there are requirements for every major investor or fund, within which they should report on their positions. Reports are provided in form 13F.
Form 13F - Institutional Investor Quarterly Report, wealth managers over $100 million for investment purposes in securities.
This practice was introduced for the transparency of the US securities market.. Small investors can watch the actions of "smart money".
The report contains the following data:
• List of papers, owned by the fund. Issuer names are listed alphabetically
• Paper grade. for example, ordinary or preferred shares, put / call options and so on
• Number of owned securities
• Market value at the end of the calendar quarter
How to peep into the pockets of funds
• Go to the SEC website, to COMPANY FILINGS tab. Find information from mutual funds here, hedge funds, trust companies, pension funds, insurance companies.
• In the search line, enter the name of the fund: e.g. Bill & Melinda Gates Foundation - charity foundation of Bill Gates and his ex-wife, or Buffett's famous Berkshire Hathaway.
• On the page that opens, you need to find the 13F-HR report and click "Filing" or "Documents"
• We are interested in the document "INFORMATION TABLE" with the name "form13fInfoTable.html"
• In the resulting table, you can see the latest reporting data on the list and number of fund assets
The information obtained can be used to build your own strategies and for other actions.. Many companies and media make comparative analysis of assets from quarter to quarter, what in theory can help with making an investment decision, based on the opinion of a major market player. The Grail!? Not, not so simple.
This form has a number of key features., ignorance of which can harm investors. First of all, errors in the report: their presence is confirmed by various studies and the SEC itself.
Only long positions are reflected in the report, that is, shopping. There are no short positions in it, which can lead to a false idea of the real position of the fund. for example, a long position can be protective against an existing short on the same asset, but this is not mentioned in the report.
The next problem is the speed of filing reports - within 45 days after the end of the quarter. As a result, a private investor receives information with a huge delay., and the fund could have changed its position long ago. Relatively speaking, there is a great risk of "missing the drive". Large funds may deliberately publish data at the last moment, to reduce the risk of portfolio copying by competitors.
Ultimately, the use of the report can lead to being late for the "outgoing train" and, even worse, prevent it from leaving it in time. There is no 100% guarantee yet, that the report is correct.
• Form 13F gives general, but at the same time a superficial understanding of the state of affairs in the largest funds.
• For traders, the analysis of outdated data is hardly suitable.
• Long-term investors may find the information very interesting, it can be used to build your own strategy.
• Must remember, that there are risks of erroneous data or misunderstanding of the position due to insufficient information.
• Ultimately, investment decisions should be based on a comprehensive analysis of the company's financial performance, economic metrics, news background and other important factors.
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