You may want to receive an alert when these managers submit a filing. The 10 most popular hedge fund managers in the WhaleWisdom.com database often spark big moves in the stocks they buy and sell.
WhaleWisdom compiles data on the number of views for every hedge fund in its database. Essentially, one can see which hedge funds are most popular with investors. Most of these fund managers are rock stars in the investing world.
It’s the halo effect — the legendary managers made themselves rich, so investors figure mimicking the gurus stock picks is likely to be a winning strategy. Sometimes that works and sometimes it doesn’t. Like many things in the investing, what’s popular isn’t always what’s profitable. In reality, top performing small, obscure hedge funds may be the best source of profitable ideas. Nonetheless, when the following managers buy or sell a stock, investors often pile in, driving big moves.
Warren Buffett’s Berkshire Hathaway
He’s the richest stock market investor ever, the sixth wealthiest man on the planet. Yet he’s famously frugal — he still lives in in the same Omaha house he bought in 1958 for $31,500. The preeminent value investor — he learned from the legendary Benjamin Graham. In many ways Buffett is the anti-Musk. Unassuming, soft-spoken, old school. He thinks bitcoin is a fool’s investment. Buffett is 90 years old now and his portfolio’s performance has trailed the market for years. But investors still hang on the Oracle of Omaha’s every word. 13F filings by his firm Berkshire Hathaway continue to be scrutinized by investors. When Berkshire announces a new position, expect that stock to pop. Even though Berkshire Hathaway isn’t technically a hedge fund, Warren Buffet is #1 of the 10 most popular hedge fund managers at WhaleWisdom.com.
Michael Burry, Scion Capital LLC
One of the world’s most intriguing asset managers, Dr. Michael Burry made himself — and investors in his Scion hedge fund — hundreds of millions shorting sub-prime mortgages during the financial crisis a decade ago. A bestselling book, and later a movie, was made about it — The Big Short. Michael Burry is portrayed in the movie by Christian Bale.
Burry is self-diagnosed as autistic (Asperger’s Syndrome). Despite this condition — or likely because of it — he seems to have a unique perspective on investing. He began as a part time investor and blogger while in med school before he was “discovered” by Joel Greenblatt of Gotham Capital, author of You Can Be a Stock Market Genius. Like Buffett, Greenblatt and Burry are resolute value investors.
For those who watch every move Burry makes, in addition to the quarterly 13F filings, keep an eye out for 13Ds filed by Scion. Last year the reclusive manager went “activist” on two stocks, including everybody’s favorite short squeeze — Gamestop (GME).
Gabe Plotkin, Melvin Capital Management
Gabe Plotkin of Melvin Capital Management jumped onto the list of top 10 most popular hedge fund manager for the “wrong” reason. His short bet on Gamestop went terribly wrong in a short squeeze for the ages. Retail traders banded together on Reddit and drove GME relentlessly higher. They fingered Melvin as the main boogey-man behind Wall Street short selling manipulation. Melvin Capital reportedly lost 53%, and Plotkin $850M personally, as GME rocketed from 20 to 483 over 20 trading days in January. The hedge fund needed a capital infusion from Citadel and Point72 as losses from its GME short ballooned.
Despite Melvin Capital’s popularity in WhaleWisdom, 13F holdings don’t disclose short positions. So, investors scouring the site for info on Melvin’s shorts won’t gain insight into Plotkin’s bearish bets, only his long holdings.
Ray Dalio, Bridgewater Associates, LP
Bridgewater, Ray Dalio’s hedge fund, attracts tons of investor interest, landing him on the list of top 10 most popular hedge fund managers. However, Dalio’s returns haven’t lived up to his popularity in recent years. WhaleWisdom gives Bridgewater a WhaleScore of 30 — ranking the fund’s long stock portfolio performance in the bottom third of all hedge funds. When you get as big as Bridgewater — $235B in AUM — it’s hard to beat the market.
James Simons, Renaissance Technologies LLC
The Medallion Fund may be the most successful hedge fund in history. Started by Renaissance Technologies founder James Simon in 1988, Medallion reportedly averaged 66% before fees with a down year during the period from 1988 to 2018. It surged 76% in 2020. Simons stepped down as manager in 2009, and the fund is now run by Peter Brown. Renaissance employs scores of Ph.Ds who create models that trade short term moves in a variety of markets. Medallion is Renaissance’s internal private fund, open only to employees. Simons created three public funds in 2005 in an attempt to apply Medallion’s quant alchemy to long term investing in public markets. Those funds have underperformed.
According to a 2019 paper by UCLA professor Bradford Cornell, $100 invested in Medallion at the start of 1988 would have turned into $400 million by the end of 2018.
Given that the fund prints money, who wouldn’t want to know Medallion’s secrets? It’s no surprise that investors sift through Renaissance Technologies quarterly 13F filings with keen interest. There’s only one problem: Renaissance only reports the 13F holdings of its public funds — there’s no info on Medallion trading. And the public fund returns massively lag Medallion’s.
Cathie Wood, Ark Investment Management
Cathie Wood of Ark Investment Management has soared to stardom in the investing world. A four decade money management veteran, Wood is suddenly the preeminent female investment guru alive today. In 2020, her firm’s flagship Ark Innovation ETF gained nearly 150% with aggressive bets on Tesla (TSLA) and other hot tech stocks. Wood is a favorite of the financial media, opining regular (bullish) opinions on investments in “disruptive” tech stocks. She’s also a big champion of bitcoin.
“Cathie Wood” on Google Trends over the last year.
While her hot hand has cooled recently along with the tech correction, cloning the top 20 holdings of Ark Investment Management since Q3 of 2017 has returned nearly 46% annually.
Julian and Felix Baker, Baker Brothers Investments
Baker Brothers Investments has been the leading health-care focused hedge fund for going on two decades. The stock picking prowess of Julian and Felix Baker has not declined despite the firm’s 13F assets growing from $200M in Q4 of 2001 to over $26B currently. As we wrote previously, replicating the fund’s smaller cap 13F stock picks has been especially lucrative over the last dozen years.
Colin Moran and Geoff Gentile, Abdiel Capital
Abdiel Capital Advisors has amassed an astounding stock-picking track record since it first filed a 13F in Q2 0f 2016. An equal weighted portfolio of the fund’s top 10 holdings, rebalanced quarterly, has returned 62.74% annually. Managing partners Colin Moran and Geoffrey Gentile eschew diversification, running a concentrated portfolio. Abdiel followers track 13F, 13D, 13G and Form 4 filings.
Bill Ackman, Pershing Square Capital
Pershing Square Capital is a very popular fund in WhaleWisdom. Bill Ackman started the firm in 2004, and has since used activist tactics to drive performance in his long portfolio, though returns for followers have been average.
However, investors in the actual hedge fund have reportedly enjoyed a couple very good years. According to Bloomberg, Pershing Square had a second straight record year in 2020, as an Ackman bet in the early days of the pandemic helped the fund return 70%.
The winning streak represents a turn of fortune for Ackman, whose fund previously stumbled with three consecutive years of losses due to a big loss on Valeant Pharmaceuticals Ltd. Then there was an ill-fated short-selling campaign at Herbalife Nutrition (HLF), along with other underperforming bets.
Pershing Square’s 2020 performance was driven by a lucrative credit hedge Ackman placed as the coronavirus crisis began. Ackman said in April he’d been so concerned about the impact of the coronavirus that he considered liquidating Pershing Square’s entire portfolio before instead opting for the credit-hedge strategy.
Chase Coleman, Tiger Global Management
If you had to choose one fund to follow, Chase Coleman’s Tiger Global might be it. Over the last decade, a 13F portfolio of Tiger Global’s holdings, equal-weighted and balanced quarterly, has returned 22.45% annually. The fund’s long positions have returned 119% over the last year. Given Coleman’s stock-picking prowess, it’s no shock that thousands of investors mimic his moves.
Seth Klarman, Baupost Group
Another famously successful value investor, Seth Klarman’s Baupost Group rounds out the list of the top 10 most famous hedge funds. As I’ve written previously, Klarman’s 1991 book Margin of Safety, is a value investing classic. It’s also is valued by collectors; copies sell for thousands of dollars.
The book pays tribute to Ben Graham, “the father of value investing.” But Klarman also describes his own unique value investing philosophies.
The term “margin of safety” is a key concept of value investing. It refers to the discount between the price an investor pays for an asset, and its true value. As the margin of safety increases, risk declines, and profit potential increases. In his book, Klarman reiterates Buffett’s famous line. The first rule of investing is “Don’t lose money,” and the second rule is, “Never forget the first rule.”
Returns to Baupost followers don’t quite match Klarman’s notoriety, however. The fund has a mediocre WhaleScore of 60. But investors listen intently when Klarman speaks, and continue to watch his moves closely.
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