In this article, we will take a look at the top 10 billionaire stocks from 10 billionaires. To see more such companies, go directly to Top 5 Billionaire Stocks From 5 Billionaires.
If you want to become a billionaire, do what billionaires do. This is perhaps the most truthful cliché statements that hold true irrespective of the global macro environment.
Why should we pay attention to billionaires’ stock picks? The answer has always been hidden in plain sight. If you are looking at a group of billionaires who amassed their wealth and became billionaires solely by investing in the equity markets, it means they have been doing something right. And the compounding effect keeps giving them an edge in the markets which makes them stronger and better at the stock-picking game. For example, last year, when the stock market went through a bloodbath, HFRI Asset Weighted Composite Index, which gives more weighting to the larger funds, rose 0.97%. An important thing to note here is that smaller hedge funds didn’t perform well in the same period when compared to their large counter parts. The HFRI Fund Weighted Composite Index, which gives equal weight to funds of all sizes, was down 4.25% in the year. A Wall Street Journal report analyzed this performance and pointed out the reasons behind this trend. It all comes to the benefits that come with size. Top hedge funds — which are often overseen or managed by billionaires — have a lot of resources, top talent, huge funds and technologies at their disposal. This arsenal often makes them immune to the losses and market shocks that crush smaller players in the market. This is the strategy Insider Money has been talking about for years since it has proved its mettle over the past several decades.
When top money managers and billionaires share their opinion about the markets and their future, the world listens. According to a Bloomberg survey done last year, top investors predicted that stocks will post double-digit gains in 2023. The survey included 134 funds including BlackRock Inc., Goldman Sachs Asset Management and Amundi SA. But not everyone questioned in the survey had this opinion. Close to 50% of the respondents believed inflation and deep recession to be the serious threats to any market rally in 2023. However, overall, money managers were hopeful that the second half of 2023 would see solid gains.
The Bloomberg report on this survey quoted Fabiana Fedeli, the chief investment officer for equities, multi-asset and sustainability at M&G, who said:
“The outlook from here onward will be influenced by the probability, depth and longevity of recession. There are still pockets of opportunity where companies with strong fundamentals that are able to weather the storm get sold off in times of market panic.”
Earlier this year, Bloomberg reported that researchers at Goldman Sachs had predicted that 2023 will be a strong year for hedge funds because they believed the market was shifting to become micro-driven instead of macro-driven. Goldman Sachs researchers had said that hedge funds were “well-timed to take advantage” of improving conditions for stock. They based their thoughts after analyzing the data of 758 hedge funds with $2.3 trillion of gross equity positions at the start of 2023.
Lessons from the Sage Billionaire
Warren Buffett sits at the top of the billionaires list in the world of investing. Luckily, we have tons of investor letters written by the Oracle of Omaha every year addressed to the shareholders of Berkshire Hathaway. These letters provide a sneak peek into the legendary billionaire’s thought process and how he approaches wealth creation. In his 2009 letter, Buffett said the following which shows his humility, his commitment to solid investing principles and his readiness to see his mistakes and correct them:
“Long ago, Charlie laid out his strongest ambition: “All I want to know is where I’m going to die, so I’ll never go there.” That bit of wisdom was inspired by Jacobi, the great Prussian mathematician, who counseled “Invert, always invert” as an aid to solving difficult problems. (I can report as well that this inversion approach works on a less lofty level: Sing a country song in reverse, and you will quickly recover your car, house and wife.) Here are a few examples of how we apply Charlie’s thinking at Berkshire:
Charlie and I avoid businesses whose futures we can’t evaluate, no matter how exciting their products may be. In the past, it required no brilliance for people to foresee the fabulous growth that awaited such industries as autos (in 1910), aircraft (in 1930) and television sets (in 1950). But the future then also included competitive dynamics that would decimate almost all of the companies entering those industries. Even the survivors tended to come away bleeding.
Just because Charlie and I can clearly see dramatic growth ahead for an industry does not mean we can judge what its profit margins and returns on capital will be as a host of competitors battle for supremacy. At Berkshire we will stick with businesses whose profit picture for decades to come seems reasonably predictable. Even then, we will make plenty of mistakes.
We will never become dependent on the kindness of strangers. Too-big-to-fail is not a fallback position at Berkshire. Instead, we will always arrange our affairs so that any requirements for cash we may conceivably have will be dwarfed by our own liquidity. Moreover, that liquidity will be constantly refreshed by a gusher of earnings from our many and diverse businesses.”
For this article, we used Insider Monkey’s database of billionaire hedge fund managers and first chose 10 billionaires who founded, are running/overseeing top hedge funds in the US. We then looked at each fund’s stock holdings data for the first quarter of 2023 and picked each fund’s top stock pick. The list is ranked in ascending order of the total worth of billionaires discussed in the article. Some notable stocks in the list include Apple Inc. (NASDAQ:AAPL), The Procter & Gamble Company (NYSE:PG) and Meta Platforms, Inc. (NASDAQ:META).
Top 10 Billionaire Stocks From 10 Billionaires
10. Bausch Health Companies (NYSE:BHC)
Billionaire: John Paulson (Worth $3 billion)
Billionaire John Paulson rose to fame after he successfully bet against the US subprime mortgage lending market and made $4 billion amid the financial crisis that started in 2007. He founded Paulson & Co 1994. As of the end of the first quarter of 2023, his hedge fund’s top holding is Canadian-based Bausch Health Companies (NYSE:BHC). Bausch Health Companies (NYSE:BHC) is up about 32% year to date through May 20.
As of the end of the fourth quarter of 2022, 41 hedge funds had stakes in Bausch Health Companies (NYSE:BHC). The total value of these stakes was $885 million. Paulson has a $214 million stake in Bausch Health Companies (NYSE:BHC).
9. Microsoft Corporation (NASDAQ:MSFT)
Billionaire: Ken Fisher (Worth $6.2 billion)
Billionaire Ken Fisher is one of those billionaires who are generous enough to share their wisdom with the public. These days he regularly shares his thoughts on his YouTube channel. He recently reiterated his “pessimism of disbelief” theory in a video and painted a positive and hopeful picture of the markets.
While Apple Inc. (NASDAQ:AAPL) is the top holding of Fisher, we picked Microsoft Corporation (NASDAQ:MSFT), Fisher’s second most favorite stock pick, for this article since Apple Inc. (NASDAQ:AAPL) is also the favorite stock pick of another billionaire (Warren Buffett) and we don’t want to have duplicates.
Fisher’s hedge fund has a $7 billion stake in Microsoft Corporation (NASDAQ:MSFT) as of the end of March.
Microsoft Corporation (NASDAQ:MSFT) is also the most popular stock among the 943 hedge funds tracked by Insider Monkey as of the end of the first quarter. Other famous stocks in our hedge fund database include Apple Inc. (NASDAQ:AAPL), The Procter & Gamble Company (NYSE:PG) and Meta Platforms, Inc. (NASDAQ:META).
Alger Spectra Fund made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q1 2023 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is a beneficiary of corporate America’s transformative digitization. Microsoft’s CEO expects technology spending as a percent of Gross Domestic Product (GDP) to jump from about 5% now to 10% in 10 years and that Microsoft will continue to capture market share within the technology sector. The company operates through three segments: Productivity and Business Processes (Office. LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services. Azure, and Enterprise Services), and More Personal Computing (Windows Devices, Gaming, and Search). While the company reported decent fiscal second quarter results, their investment in OpenAl’s ChatGPT captured the attention of investors. contributing to positive performance. Throughout the quarter. Microsoft surprised investors with continual rollouts of new Al capabilities across the company’s portfolio (e.g., Bing, GitHub. Teams, Office 365). Furthermore, the company announced Microsoft 365 Copilot, which leverages GPT-4, a large language model, combined with the Microsoft Graph of data to provide Al virtual assistance. We believe Microsoft’s investment in OpenAl provides a first-mover advantage in the Al transformer model space. Despite challenges in the early days of Al-powered applications, the pace of Al innovation is faster than any other enterprise technology previously observed, in our view.”
8. Coupang, Inc. (NYSE:CPNG)
Billionaire: Stanley Druckenmiller (Worth $6.4 billion)
Stanley Druckenmiller is one of the most respected billionaires out there and when he talks the world listens. Druckenmiller recently said at the 2023 Sohn Investment Conference that he’s looking at the “biggest and probably the broadest asset bubble — forget that I’ve ever seen, but that I’ve ever studied.”
However, Druckenmiller said there would be “unbelievable opportunities” in the near future even if we see a hard landing.
“And I don’t want to miss those opportunities by blowing my money now and having some 20% or 30% loss where my head is all screwed up when those opportunities present themselves.”
Druckenmiller’s hedge fund Duquesne Capital’s top stock holding is South Korean e-commerce company Coupang, Inc. (NYSE:CPNG), in which the fund owns a $302 million stake.
7. Horizon Therapeutics Public Limited Company (NASDAQ:HZNP)
Billionaire: George Soros (Worth $6.7 billion)
Hungarian-American billionaire George Soros, who is also known as the man who “broke the Bank of England,” restructured his hedge fund as family office in 2011 and retired from the world of investing in 2015 to focus more on political philanthropy. But his firm Soros Fund Management still discloses its holdings and taking a look at the fund’s data shows that Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) was its top stock pick as of the end of March 2023. The fund owns a $359 million stake in Horizon Therapeutics Public Limited Company (NASDAQ:HZNP).
Aristotle Atlantic Focus Growth Strategy made the following comment about Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) in its Q4 2022 investor letter:
“Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) was a relative contributor, as its stock price was up on news that Amgen was acquiring the company for $116.50 per share, a roughly 36% premium to the pre-deal speculation price.
6. CVR Energy, Inc. (NYSE:CVI)
Billionaire: Carl Icahn (Worth $10 billion)
Carl Icahn is one of the most famous activists hedge fund managers and billionaires in the world. The billionaire’s hedge fund Icahn Capital’s portfolio shows that Icahn Enterprises was its biggest stock holding. But since Icahn is the owner of the conglomerate, it’s better to take a look at the next biggest holding of the fund. It’s Texas-based petroleum refining company CVR Energy, Inc. (NYSE:CVI). Icahn’s hedge fund owns a $2.3 billion stake in CVR Energy, Inc. (NYSE:CVI).
Like Apple Inc. (NASDAQ:AAPL), The Procter & Gamble Company (NYSE:PG) and Meta Platforms, Inc. (NASDAQ:META), CVR is a favorite stock pick of several famous hedge funds.
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Disclosure: None. Top 10 Billionaire Stocks From 10 Billionaires is originally published on Insider Monkey.