How to Copy The Best Investors - Buy What They're Buying

Some of the best investors of all time does it: Copy other super investors. For example, guru investors like Charlie Munger and Mohnish Pabrai - they model the best investors and by doing that they secure an outstanding rate of return. Actually both Munger and Pabrai recommend copying as an investing strategy. But who are the best investors and how can you find out what they're buying and copy their trades? I'll share my learnings and knowledge about it in this article.

I believe in the discipline of mastering the best that other people have ever figured out. I don’t believe in just sitting down and trying to dream it all up yourself. Nobody’s that smart.

Charlie Munger

Every quarter the holdings of top money managers in the US are published. In these documents you can see which stocks these investment managers bought, sold, and held on to. These filings are called 13F forms and reported quarterly from investment managers with $100 million or more under management.

When these filings are published the trades are up to several months old, so you won’t get the most recent data, but you’ll know what super investors bought more of, which is an indicator of that they’re interested in owning more of that company.

Once you've found out what they've bought, your next step is answer the questions in my free investing checklist to ensure that it's a wonderful business and then last step: buy the stock at a favourable price.

Some great investors to copy is Warren Buffett (19,4% return rate for 50 years), Charlie Munger (19,8% return for 13 years), Mohnish Pabrai (25,7% for 18 years), Li Lu (19,4% for 19 years) and Howard Marks (19,9% for 20 years). These gentlemen have had a brilliant track record for more than a decade and are worth copying because of this rate of return for multiple years. 

Though you might come across investors with a very, very large rate of return, make sure to check for how long they've been able to maintain this return before you decide to invest like them as you'd want to ensure that this track record is maintained over many years.

Berkshire Hathaway's (Warren Buffett) buys and sells from WhaleWisdom.com

To read more about this topic, you should also read the article: How to Invest Like the Super Investors