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Warren Buffett said, "I am thrilled Secret Millionaires Club is available on Amazon Channels, allowing kids, along with their parents, to learn valuable lessons about finance and business to inspire them to be the best they can be."

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Site: seekingalpha.com

A recent investment of ~$25 million in a pair of index funds for Berkshire's pension funds is not out of character with past pension investments. Warren Buffett has advocated investing in index funds for individual investors for years, even placing the funds left in his wife's trust largely in an S&P 500 index fund. For many years, Warren Buffett has advised his followers that index funds are a preferred investment option for many individuals who may not have the background or desire to actively manage a portfolio. He once told Jack Bogle: A low-cost index fund is the most sensible equity investment for the great majority of investors. By periodically investing in an index fund, the know-nothing investor can actually out-perform most investment professionals. On two occasions, Buffett even acted upon his own advice. Beginning in 2008 he bet Ted Seides of Protégé Partners that over a ten year period an S&P 500 index fund would outperform against an aggregate of five funds of hedge funds selected by Mr. Seides, with the proceeds going to a charity selected by the winning individual. In the end, Buffett won as the five funds of funds averaged a gain of between 0.3% and 6.5% versus an 8.5% gain for the S&P 500 index fund. Source The second occasion was somewhat more personal. The funds Buffett has set aside for his wife in a trust have been directed to be invested 90% in an S&P 500 index fund, with the other 10% invested in short-term government bonds. He wrote in the 2013 annual report: My money, I should add, is where my mouth is: What I advise here is essentially identical to certain instructions I've laid out in my will. One bequest provides that cash will be delivered to a trustee for my wife's benefit. (I have to use cash for individual bequests, because all of my Berkshire shares will be fully distributed to certain philanthropic organizations over the ten years following the closing of my estate.) My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard's.) I believe the trust's long-term results from this policy will be superior to those attained by most investors – whether pension funds, institutions or individuals – who employ high-fee managers. The rationale for owning index funds is pretty straightforward. The various money managers paid to invest funds actively, whether in mutual funds, hedge funds, or other vehicles, largely comprise "the market" and so the average active investor is likely to lag the market after fees have been accounted for. According to Morningstar (MORN) only 23% of active funds beat a passive index in the ten years ending in June 2019. Retail investors are also, on average, better off investing over time in index funds rather than buying and selling individual stocks since the average retail investor is simply not equipped to manage a portfolio. Emotions too easily take hold and individual stocks are bought high and sold low. According to Dalbar's Quantitative Analysis of Investor Behavior study, published in 2017, the average retail investor earned 4.79% investing in stocks over a twenty year period compared to a return of 7.68% from the S&P 500. True, an investment in an index fund does not completely eliminate the emotional factors involved in when to invest, it does eliminate the what to invest in problem and makes it far easier for investors to act rationally and average into a fund over a period of time. These facts, of course, beg an interesting question. If a passive strategy is generally superior to an active one, why has Buffett's investing vehicle Berkshire Hathaway not followed the same advice? Buffett was asked at the 2019 Berkshire Hathaway (BRK.A) (BRK.B) shareholders meeting why he has not taken some or all of Berkshire's excess cash and invested it in an index fund. You can view his full response in the video below. Buffett on Berkshire's cash cushion The salient part of Buffett's response centered on Berkshire's ability to act as a counter-cyclical investor, with tens of billions of dollars in liquidity when a set of opportunities arises. That special aspect of Berkshire's structure would be eroded if large amounts of Berkshire's excess cash were invested in an index fund. That is an alternative that, for example, my successor may wish to employ, because on balance I would rather own an index fund than carry treasury bills. I would say that if we had instituted that policy in 2007 or 2008 we would have wound up in a different position in terms of our ability to move, late in 2008 or 2009…there are conditions under which we could spend $100 billion very, very quickly and if we did, if those conditions existed, it would be capital well deployed and much better than an index fund. This question of Berkshire Hathaway's excess cash, and what to do about it, stands at the center over debate on the stock itself. At the end of September 2019, Berkshire reported $124 billion in cash and treasury bills and a further $19 billion in fixed income securities, indicating that the company easily has $100 billion in dry powder. Without an attempt to caricature viewpoints, bulls on the stock point out that they believe the cash will be put to excellent use as opportunities arise and/or the stock market corrects. Meanwhile, bears point out that Berkshire's size is beginning to limit the use of that cash and Berkshire is unlikely to see the opportunities it once did. Given that debate, and Buffett's historical viewpoints on index funds, it was extremely interesting to see that in the latest 13F filed by the company, it had purchased two S&P 500 index funds, investing $12.7 million in each of the Vanguard 500 (VOO) and SPDR S&P 500 (SPY) ETF's. Some of the suspense of these purchases has already been resolved with Buffett's assistant telling Bloomberg that the purchases were made for Berkshire's pension funds. Since that is the case, we can say with near certainty that Todd Combs or Ted Weschler made the purchases since they are managing a large portion of Berkshire's pension portfolio. As of the end of last year, Berkshire's consolidated pension portfolio totaled nearly $15 billion, with the allocation shown below. Berkshire Hathaway's consolidated pension fund assets by investment type, gross amounts in millions of U.S. dollars and percentage allocations, at year-end 2018. Source: Company filings. Interestingly, Berkshire in aggregate has already allocated almost a quarter of its pension portfolio to "Investment Funds and Other." No more detail is provided in Berkshire's financial filings on these investments. However, some clarity is gained from reviewing the annual report of Berkshire subsidiary Berkshire Hathaway Energy – which does not appear to be managed by Mr. Combs or Mr. Weschler (my guess as to the reason is regulatory restrictions on how some pensions can be administered) – shows more than $2 billion in investments in investment funds and L.P. interests with a bit more detail behind them. Berkshire Hathaway Energy's consolidated pension fund assets by investment type, gross amounts in millions of U.S. dollars, at year-end 2018. Source: Company filings. Berkshire Hathaway Energy's pension summary comes with the following notes: Investment funds are comprised of mutual funds and collective trust funds. These funds consist of equity and debt securities of approximately 59% and 41%, respectively, for 2018 and 62% and 38%, respectively, for 2017. Additionally, these funds are invested in United States and international securities of approximately 73% and 27%, respectively, for 2018 and 68% and 32%, respectively, for 2017. Limited partnership interests include several funds that invest primarily in real estate, buyout, growth equity and venture capital. In the context of the pension funds at Berkshire Hathaway, a purchase of a pair of index funds does not present any large shift in strategy, since it is clear that at least some subsidiary pension funds were already investing in various mutual funds and limited partnerships. Further, the roughly $25 million that were invested in the two index funds comprises about 0.17% of Berkshire's total pension investments. So, why did either Mr. Combs or Mr. Weschler decide to make this investment? No one but them can say for sure, but it is likely a simple case of an asset allocation decision. In the context of a single plan being managed by one or both of the two men, $25 million may have been more meaningful and left the pension fund at a place where the manager was comfortable with the equity allocation, even if no specific equities were on their radar for purchase. What, then, does the purchase signal for Berkshire Hathaway's future? Perhaps nothing at all. Although it is worth pointing out again Mr. Buffett's own words quoted before, "That [investing in an S&P 500 index fund] is an alternative that, for example, my successor may wish to employ." It would not be terribly surprising if, given the mountains of cash that Berkshire generates and needs to reinvest, that investments like this were more likely to be chosen in the future. That could be true whether the investments are made within the investment portfolio of the insurance subsidiaries or in managing the pension portfolio. Given that the investment was not made by Mr. Buffett, though, investors should read very little into the move as a signal to what Berkshire will be doing in the short-term. The cash is likely to continue piling up. To use another of Mr. Buffett's analogy, rather than using index funds, he will continue 'waiting on his pitch.' Disclosure: I am/we are long BRK.B. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

News: Economy | The Guardian
Site: www.theguardian.com

The star technology investor James Anderson has taken a parting shot at fellow fund managers addicted to the "near pornographic allure" of earnings reports and macroeconomic headlines, as he claimed the industry was "irretrievably broken". The outgoing co-manager of the FTSE 100-listed Scottish Mortgage Investment Trust said his own "greatest failing has been to be insufficiently radical" over the past two decades. Anderson, who is stepping down in a year's time, has generated returns of 1,700% for investors in Baillie Gifford's flagship fund by giving early backing to technology companies such as Tesla, Amazon and China's Tencent and Alibaba. Scottish Mortgage reported an 111% increase in net asset value for the year to 31 March, its "strongest ever" return. It was the best performing share in the FTSE 100 during 2020. However, it has now sold 80% of its Tesla shares and offloaded its holdings in Facebook and the Google owner, Alphabet, to focus on finding other companies that will help build the post-carbon economy. New investments include Northvolt, a Swedish battery maker for electric vehicles that is led by a former Tesla engineer, and the Covid-19 vaccine maker Moderna, which Anderson likened to a software company, as it writes RNA code to program human cells to develop new therapies. The Moderna share price has jumped from $65 a year ago to $153. The fund has also added to most of its Chinese holdings and taken new Chinese investments. Anderson said he and his co-manager, Tom Slater, who will become lead manager of Scottish Mortgage next year, needed to "remain eccentric" and become more radical. In his fund manager report in the £16bn fund's full-year results, the last before his departure, the 61-year-old wrote: "To be blunt, the world of conventional investment management is irretrievably broken. It demands far in excess of the canonical 'six impossible things before breakfast' that Alice in Wonderland propounds." Anderson criticised the value investing philosophy of the veterans Benjamin Graham and Warren Buffett, and the short-termism of many conventional fund managers. "Distraction through seeking minor opportunities in banal companies over short periods is the perennial temptation," he said. "It must be resisted. This requires conviction." He continued his attack, saying: "It is inherent to the notion of efficient markets that all available information is incorporated in share prices. Only new information matters. "This is used to justify the near pornographic allure of news such as earnings announcements and macroeconomic headlines. In turn this is reinforced by the power of near-term financial incentives." He said the secret to successful investing was "understanding change, how it happens, how much happens and its implications" over the long term, and stressed the importance of listening to scientists and other experts. For example, when the trust invested in Tesla seven years ago "that electric vehicles would win had become intensely likely", he said – but others chose to focus on negative headlines about Tesla and its chief executive, Elon Musk. Since then, Tesla shares have soared from about $6 to $590. "Most investors do not listen to experts. Instead they listen to brokers and the media, besotted as it is by fearmongering and the many short sellers," he said. Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk Anderson joined Baillie Gifford in 1983 and has managed its flagship fund since 2000. After his departure, he will become chairman of the Swedish investment firm Kinnevik, which manages the fortune of Sweden's Stenbeck family and others. Anderson has been similarly outspoken in interviews. He warned in March that investment management firms risked becoming too big and bureaucratic, taking aim at his employer, which he said had more compliance officers now than it had total staff when he started. He had previously taken a swipe at Buffett, who runs the US investment firm Berkshire Hathaway and is revered as the "Oracle of Omaha". In an interview with Investment Trust Insider in 2018, Anderson described himself as a "more Charlie Munger person than a Warren Buffett", saying that Munger, Berkshire Hathaway's vice-chairman, was "much less prone to American folklore".

News: Economy | The Guardian
Site: www.theguardian.com

Investors in Neil Woodford's flagship investment fund are likely to remain trapped until early December, after the frozen fund extended its suspension to sell holdings and pay for customer withdrawals. The administrator of the Woodford Equity Income Fund, Link Asset Services, said on Monday it would probably take a further four months before the £3.5bn vehicle was able to reopen. The fund was suspended on 3 June and Woodford stands to make about £8m in fees from investors if it stays shut until early December. Investor fury at Woodford for continuing to take fees for managing the equity income fund while their money is locked up has added to the controversy surrounding the former star stock picker. Withdrawals and poor performance have reduced the size of the fund to about a third of its peak of more than £10bn. In a statement to investors on his website, Woodford said: "I understand the frustration, inconvenience and anxiety the continued suspension of the fund will be causing you and I am extremely sorry for putting you in this situation." Woodford said the fees of about £65,000 a day were needed to pay wages and other costs while he shifts the fund into big publicly traded companies and away from unsuccessful listed investments such as estate agent Purplebricks and hard-to-sell privately held businesses. The fund entered a vicious spiral in May as investors unnerved by poor performance withdrew their money, culminating in Kent county council trying to cash in its entire £263m. Link said: "The suspension of dealing is likely to last until early December while we implement the strategy to reposition the portfolio in order for the fund to be reopened at that time. In our view, this is a realistic amount of time for Woodford to complete a measured and orderly repositioning of the fund's portfolio of assets." Meanwhile, it also emerged on Monday that Woodford had sold 1.75m shares in the listed fund that he manages, Woodford Patient Capital Trust, between 3 July and 8 July. At the average share price between those dates, the sale would have made Woodford just less than £1m, Reuters calculated. Woodford, who told the fund's board about the share sale on 27 July, said he needed the money for a tax bill and other commitments. The Patient Capital Trust is one of several managed by his company Woodford Investment Management. He said he was forced to sell the shares after taking no income or dividends from Woodford Investment Management and blocking withdrawals from the equity income fund. The explanation from Woodford's company to the board for selling his Patient Capital Trust shares said: "Whilst a reluctant seller, between 3 and 8 July Mr Woodford sold 1.75m of his WPCT shares (around 60% of his holding). The sole reason that he did so was in order to meet personal financial obligations, including a tax liability." The board said that although it was not strictly required to disclose Woodford's share sale, it had decided to publicly release the information. Woodford is left with 1.25m shares representing 0.14% of the Patient Capital Trust. Profile Who is Neil Woodford? Show Hide Neil Woodford was once the UK's biggest star fund manager, personally managing a £25bn mountain of money on behalf of pension funds and other investors at Invesco Perpetual. When he decided to quit Invesco and go it alone in 2013 it was a huge shock for the fund management industry. Invesco shares slumped by 7% on the day he announced his departure. At Invesco Woodford held control of huge stakes in some of the UK's biggest firms, and his opinions mattered. His criticism of AstraZeneca chief executive David Brennan in the 2012 shareholder spring was widely regarded to have cost him his job, and his critique of BAE's attempted £28bn merger with Airbus is acknowledged as one of the reasons the deal collapsed. Woodford, who was widely referred to in the media as an investment "hero" and fund management "star", had done exceedingly well over his quarter century there. A £1,000 investment placed when he started at the firm in 1988 would have risen to £23,000 by the time he left. Woodford accidentally fell into fund management and hadn't heard of the term until he rocked up in the City in the 1980s sleeping on his brother's floor while looking for a job. He got his first break in insurance, before drifting into fund management. He had left school wanting to fly fighter jets but couldn't pass the RAF's aptitude test, and instead read economics and agricultural economics at the University of Exeter. Feeling he had outgrown Invesco Perpetual, he set up his own firm Woodford Investment Management in 2014, on an industrial estate near Oxford. Within two weeks of launching, he had raised £1.6bn, a UK record, and it quickly grew to £16bn. In its first full year his flagship fund returned 16% and Woodford, a devotee of veteran US investor Warren Buffett, was dubbed the "Oracle of Oxford". Asked if he ever doubted his judgment, Woodford once said: "Daily. You must never, as a fund manager, stick your head in the sand saying 'everybody go away, I'm right, I'm right, I'm right'. You've always got to expose yourself to criticism and the analysis that you may be wrong." Woodford went on to say that the secret of successful fund management was a balance of arrogance and humility. "You have to have a sufficiently strong arrogant gene to back your judgment, back your conviction. If you didn't, you would end up with a portfolio that looks very much like the index. But, equally, you must have the humility to accept that you will get things wrong." Rupert Neate Photograph: Jenny Goodall/Rex Features A spokesperson for Woodford said: "Neil remains invested in WPCT and completely committed to the early-stage asset class and its long-term investment potential." Woodford Patient Capital Trust has an independent board whose job is to act in the interests of shareholders. The board also revealed on Monday it was considering replacing Woodford as the fund's portfolio manager after receiving approaches from other potential candidates. The board said: "Whilst the board remains confident in the portfolio manager's commitment to WPCT and the current day-to-day management of the portfolio, the board intends to engage with a broader range of third-party managers in order to undertake a full assessment of all potential management options, which may or may not lead to a change in the company's management arrangements." Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk If the board replaces Woodford it will be a further blow to the reputation of the UK's most famous fund manager and a former favourite with retail investors. Shares in Woodford Patient Capital Trust, down almost 40% this year, fell 4.3% to 51p on Monday.

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Site: seekingalpha.com

Original Post EVCM Fund letter to investors for the third quarter ended September 30, 2018. Dear Partners and Shareholders, EVCM Fund net returns to investors are shown in the following table. "Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it" - Warren Buffett. Q3 - 2018 Overview: Stock price volatility continued in Q3 as investors worried about trade wars, multiple rounds of tariff impositions, an economic slowdown in China, increasing energy prices, rising interest rates, currency crises in several emerging markets and geopolitical problems around the world. While our portfolio is not immune to these issues, we do think it will weather these storm(s) well. We continued taking advantage of this increased stock price volatility to upgrade our portfolio. Specifically in 2018: We made Interactive Brokers one of our largest positions as the stock price declined. We added to our investments in Teekay Offshore (NYSE:TOO), Yatra Online (NASDAQ:YTRA), Syncora (OTCPK:SYCRF), Facebook (NASDAQ:FB), Yum China (NYSE:YUMC) and JD.com (NASDAQ:JD) at what we view as exceptionally cheap prices. We sold Israel Discount Bank (OTCPK:ISDAY) for about 80% more than we paid for it in mid-2014. We sold Bank Leumi (OTCPK:BLMIF) for about 60% more than we paid for it in 2016. We sold our investment in Blackstone (NYSE:BX) at a 30% profit. We trimmed our investments in General Motors (NYSE:GM) and Fiat Chrysler (NYSE:FCAU) at prices well above their current market prices. We sold our investment in Aimia (OTCPK:GAPFF) at a small profit. We exited our short position in Tesla (NASDAQ:TSLA) at a profit. We reduced our short positions in USO and UNG ETFs at a loss. We completely eliminated our South Korea ETF hedge as the risk of war in the Korean peninsula significantly declined. The main theme underlying most of these moves is replacing appreciated positions, containing only a moderate amount of remaining upside, with new or increased positions containing large upside potential. Throughout our years of investing, we have consistently delivered strong positive returns following stock price declines. For example, 2009 was our best year following the declines of 2008. In 2012 and 2013 we delivered good returns following the declines of 2011. This happens for 3 main reasons. First, stock markets are mean reverting. Second, during declines we buy more of the companies we know and like for even cheaper prices. Thirds, economic stress invigorates the strong businesses and talented management teams that we usually invest with. We will devote the rest of this letter to a review of our portfolio and many of our investment positions. We regularly conduct such reviews of all our portfolio investments. We hope that by delving into the details of what we own and why we own it, we can demonstrate why we remain optimistic about our expected future returns. Portfolio Overview: As of quarter-end, we were 93% long and 8% short. Our overall net exposure level of 85% reflects the compelling investments we are finding in global stock markets offset by our shorts and hedges. Brief discussion of some of our investment positions: Interactive Brokers Interactive Brokers (IEX:IBKR) offers the world's lowest cost and most technologically advanced securities brokerage services. It is consistently ranked as the best broker by various investing publications. By relentlessly focusing on automation of back office tasks and expanding into ever more markets, the company has created a significant cost and coverage advantage over competing brokerages. Over the next decade, IBKR can disrupt the traditional brokerage industry and capture a large market share. We think CEO Thomas Peterffy is an exceptionally good manager and his incentives are aligned with long-term shareholders. Advantages for customers switching to Interactive Brokers include a lower cost of trading, access to many foreign stock markets, a low cost of borrowing funds, receiving interest on cash balances, an order book that does not get sold to high-frequency traders and receiving payment for lending out shares. We think these advantages are compelling and were particularly excited to hear IBKR will soon be the only non-institutional US broker to support trading in Israel. IBKR's stock declined in the last few months from $80 to $49. We are unable to find a justifiable reason for such a large decline so we have purchased more shares. Currently trading for 18 times 2019 earnings with the potential to continue disrupting the brokerage industry and grow 15% - 20% annually for the foreseeable future, we think IBKR is a bargain. YUM China YUMC owns 8300 quick service restaurants (QSR) across 1200 cities in China mostly under the KFC and Pizza Hut brands. KFC is the most popular QSR brand in China thanks to its three-decade presence there. Investment in new KFC restaurants has an attractive 2-year cash payback period. YUMC is also the leader in digital integration in China with over 145 million members in its digital loyalty program. Pizza Hut, representing about 20% of company revenues, is also popular in China but has been struggling due to increased competition and changes in consumer preferences. YUMC is responding with a revitalization program which is focused on 4 pillars: fixing the fundamentals, enhancing digital, optimizing delivery and introducing new store formats. We are already starting to see positive results from this program. Restaurant penetration and consumer spending in China continue to grow with the Chinese economy. Management believes they can reach over 20,000 restaurants, a 150% growth, in the intermediate future. Investor concerns about Pizza Hut, a trade war and a slowdown in the Chinese economy have kept the company cheap at just 9 times EBITDA, well below the multiple that peers trade for. Company management recently rejected a buyout offer of $46 per share from private equity firms Hillhouse Capital and KKR since the price was too low. Yet the shares currently trade for about $36. A few days ago the company increased its dividend by 20% and significantly expanded its stock buyback program - both signs that management is optimistic about the future. Yatra Online Yatra is India's second largest online travel agency (OTA). Through its website and smart-phone app, personal and commercial travelers can book flights, hotels and travel packages. It has assembled the largest hotel network in India and can book travel on most domestic and international airlines. Online travel booking in India is rapidly growing, driven by rising disposable incomes and increasing smart-phone penetration. Yet India's per capita spending on online travel is well below that of the US and even China, leaving room for tremendous growth. Yatra began trading last year in the US when it was acquired by Terrapin 3, a special purpose acquisition company (SPAC). It declined significantly in 2018 due to forced and indiscriminate selling by some of its venture capital owners followed by a capital raise at an unreasonably low price. We took advantage of this price volatility to purchase Yatra for under 1.5 times revenues, while peers trade for as high as 8 times revenues. We think Yatra can grow its revenues at 30% annually for the foreseeable future and become profitable by 2021. Assuming it then trades for 2 times revenues, the stock price would almost triple. There is also a possibility that global OTA's Expedia or Booking Holdings could acquire Yatra as a vehicle for entering the rapidly growing Indian market. Hilan Hilan (OTCPK:HLTEF) is Israel's leading payroll processing and HR service provider. US investors might think of it as the "ADP of Israel." The company provides an array of solutions for organizations: payroll, human resources, time & attendance and pension administration. Hilan possesses the most advanced and comprehensive system of its kind in Israel, rendering services to about half of the mid-size and large businesses in Israel. Payroll processing and HR services is a predictable, slow growth business which generates a lot of recurring free cash flow, requires minimal capital investments, is recession-resistant, and provides a high return on capital invested. Customers are very "sticky" since it would require a lot of time, effort, and expense to switch service providers. Leveraging its existing customer relationships, Hilan continued its expansion into software services and IT infrastructure services. These segments are more competitive and lower margin than payroll & HR, but do provide opportunities for more rapid growth. Hilan is a cheap, high-quality business trading for about 10 times our estimate of 2019 operating profits with a dividend yield. Fiat Chrysler Tragically, Fiat Chrysler's CEO, Sergio Marchionne, passed away this year due to a grave illness. His achievements at FCAU are already legendary and we think history will remember him as one of the most talented CEOs of his time. Marchionne was planning to retire at the end of the year which gives us confidence that succession planning and future strategy were already in place. The company recently sold one of its parts business, Magneti Marelli, for $7.1B - an excellent price. FCAU, with a market cap of 24B euro recently projected it could earn operating profits of 13B - 16B Euro by 2022. Assuming the stock then trades at 5 times operating profit of 13B euro (the low end of their projection) would result in a price target of $46 per share, significantly above the current price of $16 per share. Special Opportunity for New and Existing Investors: Emerging Value Fund is close to fully invested, yet we continue finding highly attractive investment opportunities around the world. Plainly put, we have more compelling investment ideas than capital. As you know, in 2017 I added over $100K to my personal EVCM Fund investment account. I recently added an additional $66K to my personal EVCM Fund account. When I invest in EVCM Fund, I pay the same fees and invest under the same terms as everyone else. Actions speak louder than words, so I hope these personal actions demonstrate my positive expectations for our future returns. I wish to invite both existing and new investors to join me. For the next 3 months, any new capital into the fund (from both new and existing investors) will enjoy a permanently reduced 1 and 10 fee structure (1% management and 10% incentive fee). Concluding Remarks: We have taken advantage of the recent market volatility to upgrade our portfolio in terms of quality, growth and expected upside. As contrarian value investors, we buy cheap stocks only to watch them temporarily become even cheaper. Therefore, we are bound to experience occasional periods of underperformance. The majority of our businesses continue to increase their value by growing their competitive moats, generating earnings and cash flows, investing in profitable growth opportunities and/or returning capital to shareholders via dividends and stock buybacks. We therefore remain optimistic about our expected future returns. Thank you, our investors and shareholders, for your continued trust and support of EVCM fund. I continue to work tirelessly to protect and grow our capital and look forward to reporting strong positive returns in the future. Please don't hesitate to call with any questions, thoughts or comments. Sincerely Yours, Ori Eyal, Managing Partner ori@emergingvaluefund.com EVCM Fund Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

News: "satellite industry" - Google News
Site: news.google.com

"Alternative data" is going mainstream as fund managers are projected to spend more than $1 billion this year to beat the market averages and stave off the rise of low-cost passive investing. The explosive growth in the amount of alternative data sets — an array of information gleaned from the web, satellites and even consumers' wallets — hasn't proved to be a panacea. But what was once considered the domain of quantitatively oriented hedge funds and other well-heeled investors has become a must-have for traditional asset managers struggling to deliver market-beating returns. Traditional investment managers face three options, said Octavio Marenzi, chief executive officer of Opimas, a capital-markets-focused management consulting firm. The first option is to embrace alternative data and effectively adopt a more quantitative approach. The second is to go into passive investing, tracking an index and abandoning research altogether. "And the third option is to go home and give up," he told MarketWatch. Also see: How a mix of psychotherapy and financial advice could solve your money issues once and for all Investors have been embracing the first option, if spending is anything to go by. While sources offer varying figures on the size of the alternative-data industry, there's widespread agreement that business is growing rapidly with no sign of an imminent slowdown. Schroders, Fidelity Investments, Capital Group, Neuberger Berman, T. Rowe Price and Invesco are among the companies that have built data teams or brought on a number of alternative-data-focused full-time employees, a 2018 study by AlternativeData.org showed. Explosive growth in spending Total spending on alternative data by buy-side firms — mutual funds, hedge funds, pension funds, private-equity firms and the like who buy securities or other assets for their own or their clients' accounts — will jump from $232 million in 2016 to a projected $1.1 billion in 2019 and $1.7 billion next year, according to AlternativeData.org, an industry trade group supported by data provider YipitData. The group reckons there are now 447 alternative-data providers. More broadly, Opimas in 2017 projected total spending, including outlays for data sources, data science, IT infrastructure, data management and systems development, would rise from more than $4 billion to north of $7 billion by 2020 — a prediction that appears on track, according to Marenzi. It's an industry described as being very much in its infancy. Many investment firms are still "getting their feet wet" when it comes to using data from alternative sources, said Richard Johnson, principal for market structure and technology at research firm Greenwich Associates. The firm estimates the total amount budgeted for alternative data by investment managers stands at around just $400 million to $500 million, but is set to grow rapidly as users follow through on plans to ramp up usage. A recent study by the firm found alternative-data budgets swelled by 76% in 2017 and 52% last year. The growth in alternative data has a number of drivers, most of which offer few surprises. After all, the advent of machine-learning technology and the drop in the cost of computing power have made it much less expensive to crunch ever-larger sets of data — a phenomenon that's led a number of traditional, active asset managers to increasingly incorporate quantitative investing techniques into fundamental-oriented models. Wave of new information So what makes data "alternative"? Investors, vendors and research firms use the term to refer to data that's outside the realm of the usual government- or company-provided data on the economy, earnings and other traditional metrics. The growth of the internet and the digital economy, along with technological advances in computing and data crunching, have created a tidal wave of information and, crucially, the ability to process it quickly. Video: How 'alternative data' gives an investing edge — if you can afford it There's also a gee-whiz factor. News reports often focus on cloak-and-dagger-style data sources, such as the aircraft-tracking service that spotted a corporate jet owned by Occidental Petroleum Corp. OXY, +3.46% at an Omaha airport in April, triggering hunches that executives of the oil giant were in talks with Warren Buffett's Berkshire Hathaway Inc. BRK.B, +1.01% BRK.A, +0.91% in an effort to find an ally in their bid to acquire Anadarko Petroleum Corp. Buffett indeed stepped up to the plate two days later with a $10 billion investment in Occidental. Satellites that can count the number of cars in retailers' parking lots or detect when manufacturers are adding shifts or reducing their workforces have also garnered plenty of attention. In the commodity world, Genscape Inc., a unit of Daily Mail & General Trust PLC DMGT, +0.49% , uses helicopters to beam infrared signals at oil-storage tanks to gauge inventory levels ahead of government data. Data-analytics provider Verisk Analytics VRSK, +0.43% last month signed an agreement to acquire Genscape from DMGT for $364 million in cash. Other popular products include data sets based on web scraping. By tracking prices and inventory on public retail sites, for example, investors can glean insights into the performance of brands and companies, Greenwich Associates said in a recent report. Crowd-sourced data and social-media sentiment are also popular alternative-data forms. And investors have been willing to pay up for data from credit-card providers and point-of-sale systems. Such data sets collect figures straight from the source, Greenwich Associates noted, with some companies forming a panel of consumers who agree to share credit-card statements, while others work directly with technology providers that handle retail payments. Some of the industry's best-known players include alternative-data aggregator Quandl, acquired in December by Nasdaq Inc. NDAQ, +2.11% ; Orbital Insight, which applies artificial-intelligence technology to satellite and other geospatial data sources; Genscape, the outfit being acquired by Verisk from Daily Mail & General Trust, which provides an array of data based on its network of monitors across the commodity and energy sectors; financial-research platform Sentieo; and Dataminr, which gleans social-media feeds for insights into breaking news events and market sentiment. No silver bullet Does it pay? Users think so. The Greenwich Associates study said 72% of investment firms reported that alternative data enhanced their signal, with over a fifth of respondents saying they got over 20% of their alpha — industry lingo for the ability to beat the market — from alternative data. But analysts and data users caution that the newfound sources of insight aren't by themselves a silver bullet capable of curing active managers' performance ills. "Many investors still have unrealistic expectations," said Yin Luo, managing director for quantitative analysis, strategy and economics at Wolfe Research, in an interview. The problem is that the outside-the-box nature of the information can lead to the impression that merely shelling out for the right data set will point the way to profitable stock picks and market-beating performance. Veteran users say it's more realistic to view alternative data as an additional tool in the toolbox, not a one-shot replacement of the investment process. "I think of alternative data as very much an additional input into our process," said Katherine Glass-Hardenbergh, associate portfolio manager at Acadian Asset Management, a quantitative investment-management firm with around $96 billion in assets under management that's been using alternative data sets for years. To put the role, and potential, of alternative data in perspective, it helps to look back at an event that helped drive its adaptation. It was a rough patch for quantitative traders that marked an important turning point, according to Luo. The firms, which rely almost exclusively on computer models to generate trading ideas, suffered sharp losses in 2007 after crowding into similar trades, an episode known as the "quant quake." That inspired quantitative managers to look for data outside their traditional toolboxes toward sources that weren't being widely used, he said. Alternative data sets should generally be expected to deliver performance similar to traditional data sets, he said. So while the data aren't necessarily "better" when it comes to providing performance-enhancing insight, they are "different," Luo explained. It echoes the investment-industry adage that describes asset diversification as the only "free lunch" in finance, he said. The same principle applies to data, in that the usage of alternative sources can provide data inputs that are also uncorrelated. Separating signal from noise So there are plenty of inputs. But how do investors go about filtering the signal from the noise? For big asset managers, it's often done in-house. Data scientists remain in high demand in the investment-management industry. Their job is often to vet the myriad sources of data available, and then figure out what works and how to deploy it. Vendors, too, are fueling demand for data scientists as they build off-the-shelf data sets. There's also a role for sell-side firms — brokerages and companies that sell investment services to asset managers — with investors looking to them to provide research based on alternative data much in the same vein they provide other traditional market research. But those choices can lead to other dilemmas. Consider a vendor touting an off-the-shelf data set as a back-tested, highly reliable signal. Even if taken at face value, there's the concern the vendor will be selling that data set to a wide range of investors, which means its advantage could soon be arbitraged away, Glass-Hardenbergh said. Or there may be little "visibility" into what makes up the data. "What we're generally looking for is something a little bit more raw, a bit more unprocessed, where we can really understand what the data is," she said. "We can dive into it, we can do our analysis, we can do cleaning, we can apply it and back-test it" with the goal of figuring out whether the data will provide a useful signal. At the same time, the firm does consider on a case-by-case basis whether it makes sense to hire a vendor to provide data in a particular area, such as web scraping, or to do it in-house. "It's looking at where we can add our edge and figure out what's really going on," she said. Overall, there are probably only a few dozen shops capable of taking in substantial amounts of raw data, which means many investors will continue to turn to established market vendors, including traditional data providers like Bloomberg, IHS Markit and Refinitiv, said Johnson at Greenwich Associates. Meanwhile, active asset managers' attempts to beat their benchmarks and justify their fees amid an onslaught from low-cost passive investors will keep demand for alternative data sets strong, according to Johnson. "There's also a branding thing; people want to tell their investors that they're using alternative data because the asset owners are going to start asking these questions," he said. Four popular types of alternative data and how they're used Web scraping: The most widely used form of alternative data, according to research firm Greenwich Associates, web scraping collects data from targeted websites in a bid to gain information on brands, companies and corporate activity. Types of web-scraped data in high demand include job listings and employee-satisfaction rankings, which can offer clues to a company's growth prospects, according to the Greenwich report. Data providers also pay attention to product rankings and sales promotions, looking for clues to the performance of individual brands and companies. Satellites and aerial surveillance: Satellite images can be used to count cars in parking lots, a potential source of insight into sales activity for retailers or output at factories. Industry professionals caution, however, that satellite and other types of aerial surveillance data are best supplemented with other types of data able to provide more detailed estimates of actual foot traffic when it comes to gauging retail sales. Satellites are also used to track ships, monitor crops and detect activity in ports and oil fields. Credit-card data: Investors are looking for insights straight from the cash register. Some data providers have put together large panels of consumers who agree to share their credit- and debit-card activity. Panels made up of more than 3 million consumers are considered big enough to be useful, according to industry trade group AlternativeData.org, which noted that the resulting data are among the most expensive on offer and are often used to track retail revenue. Sentiment: Social-media feeds, news flow, corporate announcements and other items are monitored and analyzed for clues to sentiment on stocks, products and the economy. Data sleuths are also analyzing language used by executives on earnings calls and elsewhere for clues to corporate prospects.

News: EIN Presswire, All Featured Press Releases
Site: www.einpresswire.com

Portal Asset Management Corporate Logo Horizon Index Fund - White Background Horizon Index Fund - Black Background Deryck Graham, CEO of Portal Asset Management First equally-weighted cryptocurrency index fund in response to interest from sophisticated investors in Australia with no exposure to the digital asset class. Horizon Index Fund is for innovative investors such as family offices, fund managers and sophisticated investors who are used to using ETF's for building out their Equities and Property portfolios." — Deryck Graham, CEO of Portal Asset Management BRISBANE, QUEENSLAND, AUSTRALIA, November 29, 2021 / EINPresswire.com / -- The launch of Australia's first equally-weighted cryptocurrency index fund is in response to increasing interest from sophisticated investors with no exposure to the digital asset class.• Global cryptocurrency market capitalisation is now more than US$2.7 trillion• The Horizon Index Fund targets investors wanting broad cryptocurrency and digital asset sector exposure via a passively managed investment vehicle• Horizon provides equally weighted exposure to the top 25 cryptocurrency and digital asset tokens, excluding stablecoins• Monthly rebalancing offers consistent broad market exposure without overweight holdings in BTC and ETH• Backtested strategy performance delivered returns of 253.7% YTD. Portal Asset Management , the sponsor of the Portal Digital Fund, a global fund of digital asset hedge funds, today unveiled the launch of the Horizon Index Fund. The fund is targeted at family offices, sophisticated and institutional investors seeking passive, broad market exposure to the digital currency space.The Portal Digital Fund, ranked third in the global Multi-Advisor section of the BarclayHedge Alternative Investment Rankings for 2020, was also ranked by Preqin as the #1 Fund of Hedge Funds in Asia Pacific in H1 2021, and has been operating since early 2020.The Horizon Index Fund (the "Fund") is a portal for investors to receive a transparent spread across the top 25 cryptocurrencies and digital assets ranked by market capitalisation – with all stablecoin currencies, intended to maintain price parity with a target asset class, such as USD, or gold - removed. Unlike many listed futures crypto indexes and thematic ETF's, the Fund's portfolio is rebalanced every 30 days to maintain relevance across the assets and to maintain equal weighting across its spread, representing a 4% position in each.The top 25 cryptocurrencies are valued at over $2.4 trillion (USD), accounting for over 77% of the combined market capitalisation of the total industry. The Fund was designed as an alternative to the immense investment bias toward Bitcoin and Ethereum given their dominance in the overall market."Following the success of the Portal Digital Fund, which is a highly curated fund of uncorrelated, digital asset funds designed to moderate the extreme volatility of the space, investor feedback was for an offering with direct exposure with unrestricted volatility to the 25 largest cryptocurrencies and digital assets, importantly reweighted on a monthly basis to stay up to date with market movements" said Portal Asset Management CEO Deryck Graham. "The Horizon Index Fund does just that and is designed for those early adopter and innovative investors such as family offices, specialised fund managers and sophisticated investors who are used to using ETF's for building out their Equities and Property portfolios. Knowing that digital assets are now valued at US$2.7 trillion this represents 23% of the US$11.8 trillion global Gold market cap and as such is considered by forward thinking investors as a required asset class that forms part of the alternative allocation in a balanced portfolio. Such a weighted fund sits easily in a global portfolio and allows for set-and-forget access".In 1976 John Bogle, founder and then CEO of The Vanguard Group Inc., created the world's first index fund to give investors unrestrained access to the best of the equities market. It was ruthlessly disparaged by rivals as "un-American" and the fund itself was scorned as "Bogle's folly", yet from its relatively humble $11 million FUM, it had scaled its $100 billion landmark by 1999. Indexing has validated its value to the extent that Warren Buffett has instructed that his estate be invested primarily in index funds. Traditional Index Funds are characterised by access and safety, many an unskilled or inexperienced investor find it difficult to beat the performance of the S&P 500 Index."The Fund has been designed to deliver market-related volatility of 75%+ annualised." said Portal Asset Management's Executive Director Mark Witten. "The Fund's primary function is the removal of the complexity, custody risk and inefficiency associated with investing in digital assets and cryptocurrencies. Backtesting the strategy performance reveals such a fund would have returned investors 253.7% YTD in 2021. The Fund aims to achieve a broad, diversified exposure to the space via a passively managed fund that has low fixed costs and no additional performance fees."The Horizon Index Fund is now open for accredited sophisticated and institutional investors. The Portal Digital Fund is a lower volatility open-ended fund and is also available to Australian sophisticated investors.About Portal Asset ManagementPortal Asset Management ("Portal") is an independent boutique adviser in the digital currency space. Incorporated in Singapore, it acts as digital asset advisor to the Manager of Portal Digital Fund, a Cayman Islands registered fund-of-funds that invests in funds across the digital currency and blockchain economy. That fund was ranked 3rd in the global Multi-Advisor section of the BarclayHedge Alternative Investment Rankings for 2020. BarclaysHedge tracks 6,900 funds across 30 categories. The award is ranked on the growth performance of the Portal Digital Fund strategy which saw a 46.6% cumulative net return for the 2020 calendar year. Portal Digital Fund has further been ranked #1 Fund of Hedge Funds Asia Pacific H1 2021 by Preqin a globally respected fund data provider. For more information, please visit portal.amThis press release is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal, nor shall there be any sale of any security in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction. Applications for investment in the Horizon Index Fund may only be made pursuant to the offer documents for the Fund, which may be obtained from Boutique Financial Services Pty. Ltd., the Trustee of the Fund, at Suite 211, 3 Edent Street, North Sydney NSW 2060. The Trustee of the Fund is Boutique Capital Pty. Ltd. (ACN 621 697 621), which holds an Australian Financial Services Licence.Press Contact DataDeryck Graham+61 410 434 944CEO of Portal Asset Managementderyck@portal.amMark Witten+61 488 743 101Executive Director of Portal Asset Managementmark.witten@firstdegree.asia

News: Breaking News on Seeking Alpha
Site: seekingalpha.com

The shine is off. Professional money managers are beginning to eschew the strategy and the allure of investing in famed investor Seth Klarman's behemoth hedge fund, Baupost Group. The investor, known for running the nearly $30 billion hedge fund fund, and who wrote the preface of the sixth edition of 'Security Analysis' by Warren Buffett's mentor, Benjamin Graham, is starting to lose investor faith. He also wrote a book now out of print, 'Margin of Safety', that is a collectible sought after by many. He has long defended his strategy of value investing, including in January of this year, but that may not be enough, if a recent survey of investors from Institutional Investor is to be accepted. Klarman also lashed out at the Fed recently, saying it was "infantilizing" investors with its recent approach. In a randomized solicitation of professional manager selectors and capital allocators, the publication found that many believe performance is slipping at the hedge fund and that the strategy has changed. Some say that its more akin to the manager running his own money and is no longer aggressive about achieving performance. 2 of 10 investors said they would invest again with the fund now, meaning 8 would not, if given the opportunity -- a stark contrast to the idea that the fund is exclusive, even turning away prospective clients. The fund did start to raise capital in March, II wrote. It's not hard to see why some investors may be grumbling -- value as a strategy has struggled in the year that was predominantly driven by growth, tech and pandemic trends. The iShares S&P 500 value ETF (NYSEARCA:IVE) is down 10% year-to-date. The Vanguard value ETF (NYSEARCA:VTV) is off 9%. The S&P 500 (NYSEARCA:SPY) itself is up 9% over the same span. The SPY ETF's largest allocations are to Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) -- names that are up 70%, 84% and 44% respectively. Accounting of Baupost's total performance is incomplete. From inception through 2010, some reports indicate the average annual return at near 20%. In the latest quarterly hedge fund disclosures, Baupost counted HCA Healthcare (NYSE:HCA), Verint System (NASDAQ:VRNT) and Ventas (NYSE:VTR) among their most recent adds, while trimming positions in Colony Capital (NYSE:CLNY), PG&E (NYSE:PCG), to name a few. See more holdings here, which does not account for many of the hedges the manager may use to manage exposure.

News: Technology finance News
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Why Warren Buffett loves the S&P 500 Index fund, even though he doesn't buy it himself In Vanguard founder Jack Bogle's book The Little Book of Common Sense Investing, Warren Buffet is quoted as saying, "A low-cost index fund is the most sensible equity investment for the great majority of investors. ... By periodically investing in an index fund, the know-nothing investor can actually out-perform most investment professionals." In fact, Buffett has even advised his estate to invest 90% of his wealth in an S&P 500 index fund after his death. Sure, Buffett himself invests in individual stocks, but remember, he is one of the best investors of all time, and spends almost all waking hours studying companies and industries. In fact, most full-time investment managers don't outperform the index, especially when management fees are taken into account.

News: Tech on Medium
Site: medium.com

In the first months of 2021, a new group of investors was discovered that they are interested in investing online by buying or selling stocks. Although buying and selling stock may seem complex on the surface, it is not. Although media analysts and financial experts may mutter about technical jargon, it is easy to understand how stocks can be bought and then sold. A brief explanation of the markets will help you to understand online investing. Here's a list of all the necessary items to trade stocks online in 2021. Basics of the U.S Stock Market There has been a lot written about the financial system and in particular the stock market. This article will focus on the basics. Those who aren't familiar with the stock market can continue to learn as they invest or expand their knowledge. As a college student, I was able to learn about the stock market and gain the confidence to launch my transcription business many years later. In Antwerp (Belgium), in 1531, the first stock exchange was established. Moneylenders and brokers traded debt certificates or bonds between individuals, government entities, and businesses. Modern stock markets In 1773, London hosted the first stock exchange of the "modern era". In Philadelphia, 1790 saw the birth of the first stock exchange in America. The New York Stock Exchange (NYSE), was formed shortly after the signing of the Buttonwood Agreement by 24 men at 68 Wall Street. Five securities were traded, including three government bonds, and two stocks from two banks. The NYSE is today the most well-known stock exchange in the world, though many large countries also have stock exchanges. The National Association of Securities Dealers created the Nasdaq Exchange in 1971 to allow investors to trade securities using a computerized system. It was the first electronic trading platform. It is still a model for modern-day trading exchanges. The Nasdaq does not have a physical location like the NYSE. All trades are completed electronically. Stock exchanges don't own stock. Stock exchanges connect buyers and sellers. The main difference between the NYSE & Nasdaq is the way stocks are traded. Stocks traded on NYSE use an auction system. Each weekday, the NYSE opens at 9:30 a.m. Eastern Time. The earliest order to buy or sell is at 6:30 a.m. and will be paired with either the highest bid price or the lowest asking price. Each weekday, the NYSE closes at 4:00 p.m. The Nasdaq, on the other hand, is a dealer market. Participants do not buy and sell between each other. Transactions use a dealer instead. This is why the Nasdaq has been called a market maker. Why Stock Exchanges Are Necessary? Individual and institutional investors looking to invest in one or more companies can use stock exchanges to provide crucial services. Stock exchanges and the markets help individuals, companies, and governments. Stock exchanges are vital because they enable companies to raise capital for expansion and growth. Companies would otherwise have to depend on bank loans. Businesses that require additional operating capital may launch an Initial Public Offering (IPO), which allows them to sell shares to investors. The funds can be used by the company without incurring interest costs as traditional loans. To maintain or increase its share price, however, the company must show positive growth and profitability. In short, stock exchanges help: Companies can raise capital without paying interest Contribute to personal wealth Invest more in the economy As a global economic indicator What Is a Stock? Stock is a certificate that demonstrates equity ownership in a company. You can purchase the stock of a company to get ownership. When a share is publicly offered, it is valued at a certain price. The price per share will increase if the company m Keep in mind, however, that many factors can impact the share price of a company. Some factors are beyond the control of the company. The number of shares allocated will determine the percentage of ownership. Stock can be purchased and owned by investors in both public and private companies. We'll be focusing on publicly traded stocks for this article. The Difference Between Stocks (Equity), and Bonds (Debt). This article is focused on buying stocks but it's important to know the differences between bonds and stocks. Stocks (equity), give you partial ownership of a company. Bonds (or debt) are loans from an investor to a government or company in return for interest payments over the long term. Let's suppose you buy Twitter stock. Their price per share is $66.28 at midday on March 8. You can hold the shares for as long as you wish after you have purchased one or more shares. Many trading platforms offer stock purchases at no cost. However, brokerage houses such as Merrill Lynch and UBS charge a commission. Executing a trade requires a commission. What is the deal with bonds? Conservative investors love bonds because they pay regular interest for a set period. Treasury (government) notes and bonds pay interest every six months until maturity. Corporate bonds usually pay interest on a semiannual, quarterly, or monthly basis up to maturity. Because they are often backed by taxes or revenue from utilities, government bonds are very popular. Let's suppose you buy a 10-year bond worth $2,500 and earn 2 percent interest. You will receive $500 in interest if you keep the bond until maturity. This is usually distributed in equal monthly payments. Your initial $2,500 will be returned. It's also why bonds are known as "fixed-income investments". Investors can also purchase bonds with maturities ranging from a few weeks to 30 years. To offset aggressive equity investments, investors often include bonds in their portfolios. Investors who are more conservative with their portfolios will be more inclined to invest in bonds and keep more cash. The Federal Reserve has kept interest rates historically low, which means that most bonds have seen a decrease in interest payments. The U.S. government issues investment-grade bonds, such as the ones described above. They are usually low to moderately risky and range from AAA to BBB ratings. Understanding Mutual Funds and Exchange-Traded Funds Both mutual funds, as well as exchange-traded funds, use to combine several stocks to achieve a common goal. While mutual funds were introduced in the 1920s, exchange-traded funds first appeared in 1993. Mutual funds, as the name suggests, are when stocks are pooled together and managed by professionals. Mutual funds are attractive to average investors because they allow them to invest in multiple stocks. Mutual funds, like stocks, offer many investing options. High-risk funds can produce greater returns but also have large losses. Others funds are intended to generate income, growth, income, or growth. International, tech, oil, and gas funds are just a few examples of other types of funds. If you buy 10 shares of a company at $10 per share, then you have invested $100. You would own a percentage of each share if you invested $100 in mutual funds. The net asset value (NAV) of a mutual fund is what determines its value. It is calculated at the close of each trading day. ETFs ETFs that track major market indexes are exchange-traded. ETFs are individual stocks that make up an index. They can be managed passively, as opposed to mutual funds. ETFs provide investors with a way to diversify stocks and increase their exposure to specific markets. ETFs are usually free of any front-end or back-end fees but may charge commission fees. Many platforms do not charge commissions for stocks, mutual funds, or ETFs. Taxes: Short-term versus long-term capital gains There are many differences in the tax treatment of mutual funds and ETFs. Capital distributions made by mutual funds are the most important difference. ETFs do not pay capital distributions so they can sometimes be tax-friendly over mutual funds. Before investing, consult a tax professional. Taxes are applied to almost everything in life. Your investment portfolio is no exception. It is easy to get confused by the U.S. tax code. It is best to consult your tax professional before making any investment decisions. In this discussion, we'll keep it simple. Investors want to make profits. How much you pay in taxes will depend on when and how big your profit is. Let's suppose you buy General Electric at $10 per share and then sell it at $20 per share. Stocks held for less than 12 months are considered a short-term profit and are subject to ordinary income tax. Your tax bracket will determine the exact amount. Any profit earned from a stock held for more than one year is considered a long-term gain. It is subject to tax at zero percent, 15% percent, or 20% depending on your tax bracket. The tax rate for long-term gain is in 2020 If your adjusted income is between $0 and $40,000, 0% 15% of your adjusted annual income is between $40,001 and $441,450 20% of your adjusted gross income is more than $441,451 Capital gains can only be recognized if you sell all or a portion of your investments. There is no tax if you have any security. You can also use the proceeds of a security sale to offset your income if it is a loss. Tax professionals can provide advice and guidance on realized gains and losses. How do I purchase my first stock, mutual fund, or ETF? It's easier than ever to invest in the stock market. You need a brokerage account to buy or sell registered securities. Most likely, your grandparents or parents bought securities from a stockbroker who worked at a bank or large Wall Street brokerage. Many first-time investors can open an account online with a registered brokerage company today. You will need to fill out the information required and fund your account, regardless of whether you open it in person or online. We mentioned earlier that some brokerage firms charge commissions for every trade. Others don't. Before you execute a trade, make sure to understand all associated fees. Research Process Next, research any investments or stocks. You can start by looking up financial publications online and in print. Perhaps you can recall your grandparents or parents reading The Wall Street Journal. This magazine has been a reliable source of business news for decades. With video stories and podcast excerpts, the online edition of the journal is more complete than its printed edition. There is always plenty of data, so don't get lost in the details you don't know. Warren Buffett is undoubtedly one of the most successful and famous U.S. investors. He avoided investing in companies or industries that he didn't understand. Buffett also said some notable things, including "Buy into a business because you want it to be yours, not because the stock will go up." Traditional Brokerage Firms In the early to mid-1980s, traditional brokerage firms like Merrill Lynch, UBS, and Goldman Sachs rose to prominence. The perfect example of how hungry and young "stockbrokers" spent hours pitching individual stocks to investors is in Wall Street (1987), starring Charlie Sheen and Michael Douglas. You can watch the movie online or find an old VHS copy in your attic. Notice all the wired headsets and large monitors that brokers used in open-area "bullpens". This is where low-level brokers attempted to make enough money to own their office. Stockbrokers were paid per transaction and received the straight commission. This was the time technology started to revolutionize the brokerage industry. There are still a few national brokerage houses, but many regional companies. Full-Service Brokerages Many investors still have accounts with full-service brokerage firms. Stockbrokers today are known as "financial advisers" and they promote financial services over individual securities. Individual investors and financial advisors have a hard time researching and buying individual stocks. Advisors are now able to pitch managed accounts that include mutual funds, ETFs, and individual stocks. All of this is overseen by professional money managers from their firms or large mutual funds such as Janus and Vanguard. Financial advisors are still paid for their "assets under management" and commissions on individual transactions. One might argue that these payment structures favor the advisory rather than the investor. Some firms are "registered investments advisors", which means that their fees structure is based on the client's transactions and gains. Online Brokerage Services Take Over Charles Schwab and other discount brokerages offered commission discounts up to 70% compared to traditional brokerage houses. Investors also had the option to place orders 24 hours per day. These days Today, online brokerage firms like Robinhood and E*Trade virtually control the market. Younger investors are interested in buying and selling stocks once again. Many online trading platforms offer trading without commissions, even those that are more established. Robinhood does not charge upfront commissions. Their income comes from the sale of their trades to other market makers, and the generating fees for their premium service. Robinhood was hit hard by online trading in early 2021. Reddit chat rooms created a stock market frenzy that sent shorted stocks like GameStop or AMC theaters skyrocketing. Robinhood's systems collapsed due to the demand for these stocks and other stocks. Remember that brokerage firms have deposit requirements, just like banks. They must have sufficient cash to meet the investor's requirements. This is known as net capital obligations. Robinhood stopped trading some stocks due to high trading volumes. Robinhood was hit hard by investor lawsuits. Placing Your Order If you're happy with the current share price, you can decide how many shares you wish to buy in a company. Remember that there must be a seller for every buyer. Market orders are when you offer to purchase stock at the lowest price. The share price can be $10 at the time you place the order. However, the execution could result in a slightly higher price. Conclusion As your portfolio and investment interests grow, there's plenty of great information you can find. Do your research and be responsible when investing.

News: MarketWatch.com - Top Stories
Site: www.marketwatch.com

Most investors would say that professional investment managers must get a higher return on their investments than ordinary Joes, because they're smart and have much greater knowledge and better investing tools. Then why is it that the investment managers with the most certifiably impressive credentials don't do better — in fact they do worse — than the ordinary Jane or Joe? If you don't believe that, let's look at evidence recently published in the Journal of Portfolio Management by Richard M. Ennis, a long time consultant and expert in the field who ran one of the most highly respected consulting firms to institutional investors and was the editor of the respected Financial Analysts Journal. The educational endowment funds of top universities including Harvard, Yale, Princeton and Stanford are gigantic pools of money that are used to fund university research and student scholarships. The largest ones each have more than $25 billion in assets. Other top-rated universities have endowments in the multiples of billions too. Their assets are invested in stocks, bonds, and other investments. They are managed by highly qualified and well-paid experts who have access to professors in the finance departments at their universities, which contain renown academicians in the fields of finance and economics, many of them Nobel Prize winners. Because of their large size and the connections of their managers and university contacts, these funds are able to invest in investment vehicles that are not available to ordinary investors. Wouldn't you think that these funds would achieve better investment results than, say, a middle-class worker whose money is invested in her 401(k)'s low-cost index fund? But they don't. In fact, as Ennis's research shows, they achieve worse results. Why? Because they pay higher fees to their investment managers than the middle-class worker does. Their shortfall in investment performance is almost exactly equal to the excess fees they pay. " Endowment fund managers try too hard and pay too much. " Trying to achieve excess performance — as anyone might think they could do, and as they are paid to do — these endowment fund managers try too hard and pay too much. Particularly in the last dozen years or so, they have outsourced the majority of their money to arcane investment assets including hedge funds and leveraged buyouts — the kind that aren't available to the 401(k) investor. To invest in these so-called "alternative" investments, you have to pay higher fees. According to Ennis, large endowments pay on average a steep 1.6% annual fee — exactly the amount by which they underperform the middle-class investor's 401(k) index fund. Read: What the Harvard endowment's below-average grade can teach you about index funds and your investments How can all that expertise and brilliance not achieve a better return on investment? The answer is surprisingly simple: Consistently getting a better-than-average return on investment requires that you can constantly know things about the future that virtually no one else can know. There is only one possible way to do this; it's available only rarely to a few individuals, and it doesn't even always work so well. It's called insider trading — and it's illegal. Other, legal methods of trying to get a better return on investment don't work at all, no matter how brilliant they and their practitioners are. The mathematical methods of the finance field don't help one bit, in spite of the fact that academic journals of finance are awash in it, one could accurately dismiss it as being all for show. The trouble is, because ordinary investors don't understand that it is all for show and no actual use at all, they are inveigled by snow jobs sold to them by purveyors of investment schemes that are meant to make ordinary investors believe they are "sophisticated," and therefore will do better. 'Smart beta' fails The latest incarnation of this game has been marketed as "smart beta." The selling of it has been highly successful — smart beta investing is a trillion-dollar industry of funds sold mostly to the relatively small investor. How have they done? Terribly. In the past decade or so since they were introduced and marketed, smart beta funds have substantially underperformed a total market index. In 1972 the journalist David Halberstam published a landmark non-fiction book titled "The Best and the Brightest." It chronicled how the foreign policy academics and intellectuals who were, indeed, considered "the best and the brightest" careened into the terrible mistake that was escalation of the Vietnam War. It can be a mistake to put too much faith in expertise. In the investment management field, this truth is spectacularly apparent. Michael Edesess is chief investment strategist at mobile financial-planning software company Plynty and a research associate at the EDHEC-Risk Institute. He is the author of "The Big Investment Lie" and co-author of "The 3 Simple Rules of Investment." More:Ivy League colleges shun Warren Buffett's advice Plus: Vanguard opposes a tax on Wall Street its founder John Bogle favored — and the reason may surprise you

News: GlobeNewswire, Press Releases
Site: globenewswire.com

SAN ANTONIO, TX, July 10, 2020 (GLOBE NEWSWIRE) -- U.S. Global Investors, Inc. (Nasdaq: GROW) ("the Company"), a boutique registered investment advisory firm specializing in gold and precious metals, natural resources and emerging markets, is pleased to announce that its U.S. Global GO GOLD and Precious Metal Miners ETF (GOAU) surpassed $100 million in net assets for the first time since its debut in June 2017. The smart-beta 2.0 ETF ended the session on July 8 with $100.5 million in assets under management (AUM). What's more, GOAU's share price closed at a new record high for the fourth consecutive trading session on July 8, ending at $22.35. "This milestone is an important one," says Frank Holmes, the Company's CEO and chief investment officer. "Many broker-dealers require ETFs to meet a minimum threshold in AUM and daily trading volume before they can be made available to investors. Exceeding $100 million in AUM may help GOAU quality for greater distribution and attract additional assets." The achievement comes just a month after the Company's airlines ETF, the U.S. Global Jets ETF (JETS), crossed above $1 billion in AUM as value investors piled into securities impacted by coronavirus-related travel restrictions. Between March 3 and June 10, JETS saw a remarkable 70 straight trading days of positive daily inflows. That's thanks in large part to tactical investors anticipating a rebound and millennial investors using Robinhood, many of whom began to make bets on the airline industry in early March and April before Warren Buffett's May 2 announcement that he had dumped all of his airline stocks. In the quarter ended June 30, JETS' AUM grew 297 percent, from $302.0 million to $1.20 billion. "GOAU is doing precisely what we designed it to do, and we're very pleased to see its AUM exceed $100 million," Mr. Holmes says. "We spent about 8,000 hours developing the ETF, using our decades of gold stock investing expertise as active gold fund managers. We analyzed different methodologies and portfolio structures and looked at dozens of factors one-by-one. It's truly been a labor of love, and I'm thrilled to see that investors are acknowledging that hard work. "Both GOAU and JETS are dynamic, smart-beta 2.0 ETFs," Mr. Holmes continues. "GOAU has a unique portfolio structure, 30 percent of which is based on using mean reversion to rebalance the three largest gold royalty names—Franco-Nevada, Wheaton Precious Metals and Royal Gold. The other 70 percent is based on using rules-based stock-picking factors to select 25 high-quality gold stocks every quarter. These 25 names are layered based on market cap and attractiveness using our robust financial factors. We are focused on momentum in revenue, free cash flow (FCF) and high-gross margins on a per-share basis. In other words, whenever a company dilutes these value factors on a per-share basis, they're kicked out of the ETF." To see GOAU's top 10 holdings, click here. The Company is proud to offer GOAU on the following platforms: Charles Schwab, TD Ameritrade, Fidelity, BNY Pershing, Stifel, Oppenheimer, Royal Bank of Canada (RBC), Janney, LPL Financial, Raymond James, Advisor Group, Commonwealth Financial Network, Kestra Financial and Robinhood. To learn more about GOAU, click here. To learn more about JETS, click here. #### About U.S. Global Investors, Inc. The story of U.S. Global Investors goes back more than 50 years when it began as an investment club. Today, U.S. Global Investors, Inc. (www.usfunds.com) is a registered investment adviser that focuses on niche markets around the world. Headquartered in San Antonio, Texas, the Company provides money management and other services to U.S. Global Investors Funds and U.S. Global ETFs. Forward-Looking Statements and Disclosure Please consider carefully a fund's investment objectives, risks, charges and expenses. For this and other important information, obtain a statutory and summary prospectus by visiting www.usglobaletfs.com. Read it carefully before investing. Past performance does not guarantee future results. Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the fund. Brokerage commissions will reduce returns. Because the fund concentrates its investments in specific industries, the fund may be subject to greater risks and fluctuations than a portfolio representing a broader range of industries. The fund is non-diversified, meaning it may concentrate more of its assets in a smaller number of issuers than a diversified fund. The fund invests in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks are greater for investments in emerging markets. The fund may invest in the securities of smaller-capitalization companies, which may be more volatile than funds that invest in larger, more established companies. The performance of the fund may diverge from that of the index. Because the fund may employ a representative sampling strategy and may also invest in securities that are not included in the index, the fund may experience tracking error to a greater extent than a fund that seeks to replicate an index. The fund is not actively managed and may be affected by a general decline in market segments related to the index. Airline companies may be adversely affected by a downturn in economic conditions that can result in decreased demand for air travel and may also be significantly affected by changes in fuel prices, labor relations and insurance costs. Smart beta refers to a type of exchange-traded fund (ETF) that uses a rules-based system for selecting investments to be included in the fund portfolio. Free cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. The outbreak of the COVID-19 pandemic and the resulting actions to control or slow the spread has had a significant detrimental effect on the global and domestic economies, financial markets and industries, including airlines. U.S. Global Investors continues to monitor the impact of COVID-19, but it is too early to determine the full impact this virus may have on commercial aviation. Should this emerging macro-economic risk continue for an extended period, there could be an adverse material financial impact to the U.S. Global Jets ETF. Distributed by Quasar Distributors, LLC. U.S. Global Investors is the investment adviser to GOAU and JETS. All opinions expressed and data provided are subject to change without notice. Opinions are not guaranteed and should not be considered investment advice. Holly Schoenfeldt U.S. Global Investors, Inc. 210.308.1268 hschoenfeldt@usfunds.com

News: MarketWatch.com - Top Stories
Site: www.marketwatch.com

Is there a Perfect Portfolio for investors? We posed this question to 10 of the most respected pioneers in the investment community. Six have Nobel Prizes in Economics: Harry Markowitz, the founder of Modern Portfolio Theory, the basis of the modern investment portfolio; his protégé William Sharpe, creator of the Capital Asset Pricing Model (CAPM) and the beta risk measure that changed how we think about risk and reward in the financial markets; Eugene Fama, who developed the Efficient Market Hypothesis; Myron Scholes and Robert Merton, two of the co-creators of the Black-Scholes/Merton option pricing model; and Robert Shiller, the behavioral economist whose work challenged the notion of market efficiency. The other four are portfolio managers, investors and bestselling authors who have sold millions of investment books, including The Vanguard Group's founder Jack Bogle; the "Bond Guru," Marty Leibowitz; the "Wisest Man on Wall Street" and Greenwich Associates founder Charles Ellis; and the "Wizard of Wharton," Jeremy Siegel. It's no surprise that there isn't consensus among their suggestions, given their varied backgrounds and interests. The different viewpoints of these financial luminaries illustrate the complexity of portfolio management—one size clearly doesn't fit all. Think of the Perfect Portfolios of our experts as building blocks for your own Perfect Portfolio, collectively capable of accommodating the goals and constraints of all investors, if used in the right combination. Markowitz suggests that first and foremost, you should diversify. Focus only on portfolios of securities, and in particular, those that have the highest level of expected returns for a given level of risk, Markowitz's famous efficient frontier. The same concept applies across asset classes like bonds, real estate and commodities. The key for the investor is to find securities and asset classes with low correlations to each other, so that movements in one are not necessarily reflected in the others. Sharpe's Perfect Portfolio is just what his famous Capital Asset Pricing Model suggests: investing in the market as a whole. Sharpe recommends a U.S. total stock market fund, a non-U.S. total stock market fund, a U.S. total bond market fund, and a non-U.S. total bond market fund. Read: A Boglehead explains the simplest way to manage your money Fama and his collaborator Ken French created a model that starts with Sharpe's CAPM and augments it with two other factors. One captures the difference in returns between value and growth stocks, while the other captures the difference between stocks in companies with small and large market capitalizations. Fama suggests tilting your diversified portfolio toward value stocks and small-cap stocks, both of which tend to do well over time. Now: Nobel winner Eugene Fama on GameStop, market bubbles and why indexing is king As the creator of the first index mutual fund, Bogle's portfolio was all about stock and bond index funds, such as Vanguard's ETF that tracks the S&P 500 index SPX, +0.60% . His mantra was to lower your costs through index funds and not take actions that might destroy value: "Don't do something, just stand there!" Read: Stockpicking legend Warren Buffett and index champion John Bogle both knew the other was right about investing For Scholes, the Perfect Portfolio is about risk management. Your investment success will depend most on avoiding the downside "tail risks," rare but severe stock market downturns such as the financial crisis of 2007–2009 or the COVID-19 pandemic, while capitalizing on the positive "tail gains." Pay attention to what the derivatives markets such as the VIX volatility index VIX, +0.12% are telling you. For example, when the VIX is at a level below its historical average, you may feel more comfortable investing a greater proportion of your assets in risky stocks. For Merton, ultimately, the Perfect Portfolio should be your very own risk-free asset, like the inflation-protected government bond TIPS. For your retirement goal, ideally you would take your savings at retirement, and buy an annuity that would provide a lifetime income to meet your anticipated needs. Leibowitz's Perfect Portfolio is about the amount of risk you can personally bear. Be prepared to try to make some tough judgment calls, and consider all of your circumstances, including potential life events, current taxes and estate taxes. In addition to equities, you should include bonds to reduce its overall volatility. Have a contingency plan to deal with serious adverse events. For Shiller, your Perfect Portfolio should be widely diversified, not only across major asset classes, but internationally as well. Place a heavier than typical weight in stocks around the world, where Shiller's CAPE ratios—that is, cyclically adjusted price-to-earnings ratios—are relatively low. Princeton University Press For Ellis, one of the original advocates of passive investing, your Perfect Portfolio should of course include index funds, especially if you want to have a good chance of being in the top 20% of funds over the next 20 years. You should invest in bond index funds and low-cost international index funds, such as the MSCI EAFE (Europe, Australasia, and Far East) index. Pay attention to your taxes. More: Investing pioneer Charles Ellis says you're just about guaranteed to get top returns in the stock market using this method And Siegel encourages you to have reasonable expectations in line with financial history, no surprise for the author of the bestselling "Stocks for the Long Run". The longer your investment horizon, the greater proportion of your Perfect Portfolio should be in stocks. Consider developing-country stocks. For fixed-income investments, consider TIPS. Finally, as you build your Perfect Portfolio, reflect on your degree of risk aversion, your earning power, the magnitude of your current and future desired wealth, and the magnitude of your current and future financial needs. To assist you, we have created a four-question survey to help you discover where you fit in among 16 types of investors. It then points you toward your Perfect Portfolio and an action that may help you achieve it. Andrew W. Lo and Stephen R. Foerster are co-authors of "In Pursuit of the Perfect Portfolio: The Stories, Voices, and Key Insights of the Pioneers Who Shaped the Way We Invest". Now read: These are the 8 most popular books about money and investing ever And: Turn yourself into a better investor by learning from hedge-fund star Jim Simons's successes and failures

News: Big Tech News
Site: news.google.com

New York (CNN Business) Individual stock pickers like Warren Buffett are increasingly looking like dinosaurs in a market that's driven by investors scooping up passive exchange-traded funds that simply own the biggest stocks. Investors are increasingly flocking to ETFs like theand, which both have a heavy concentration in a handful of tech companies. But is that setting up the Robinhood crowd for disappointment? Some experts are growing increasingly nervous about the fact that, Google ownerand-- the five largest stocks in the S&P 500 -- have become so dominant. Investors who are blindly scooping up ETFs because they believe they're less risky than owning individual stocks could be in for a rude awakening. "The extraordinary performance of a few large technology companies has some worried about the market's concentration," said Mark Hackett, chief of investment research with Nationwide, in a report this month. Tech wreck could take down the broader market Hackett noted the Nasdaq , home to many big tech companies, is now trading at its highest valuation (based on price and expected earnings for next year) since just after the great dot-com tech bubble burst in 2000. That "makes the market susceptible to a hiccup in the technology sector," Hackett added. Investors could be forced to sell top ETFs if any of the leading tech companies stumbles. More actively managed funds, run by professional stock pickers like Buffett, tend to own a more diversified mix of companies in their portfolios. That helps limit the chances of losing a lot of money when one particular sector goes south. Market veterans -- those who remember firsthand what it was like when the Nasdaq plummeted more than 50% from its 2000 peak in a matter of months -- are starting to see eerie flashbacks to two decades ago. "There are clearly a lot of similarities between the market dynamics in the late 90s and current market dynamics. And, for those of us that lived [through] the bursting of the tech bubble, that's disconcerting," said Tom Essaye, editor of The Sevens Report investing newsletter. Gold and bonds looking frothy as well The rush into passive ETFs appears to be having an impact on other assets like gold as well, potentially setting up a bear run for the metal now that it has surged to all-time highs SPDR Gold Shares ETF GLD Many investors have been getting exposure to gold through the popularas well as passive funds that own both the commodity as well as gold mining stocks. "Massive passive ETF gold ownership may introduce a period of irrational exuberance," according to Cam Harvey, partner and senior advisor with Research Affiliates and professor of finance at Duke's Fuqua School of Business. The passive investing boom is even lifting prices in the usually more staid bond market. "We believe prudent fixed-income investors will need to rely much more heavily on portfolios that can be both dynamic and active...as passive allocations appear more vulnerable to shocks than they have in years," said Daniel Janis, senior portfolio manager at Manulife Investment Management, in a report last month. Janis added that the corporate bond market in particular is much riskier now, mainly because companies with weaker financials have been able to binge on debt thanks to the Federal Reserve and other central banks around the globe keeping rates so low. "Partly due to easy access to cheap funding, lower-quality companies have become ever larger segments of the market," Janis said. That could be bad news if there is a sudden wave of credit downgrades for riskier companies. Janis warns of "an unappealing domino effect," ass many bond funds would be required to sell once things started to fall apart. "The forced selling would lead to further price erosion and, as is often the case...those price declines would trigger waves of redemptions. Asset managers would be forced to raise cash to meet redemptions—and the cycle continues," Janis said.

News: Technology finance News
Site: news.google.com

Bloomberg (Bloomberg) -- Stefan Qin was just 19 when he claimed to have the secret to cryptocurrency trading.Buoyed with youthful confidence, Qin, a self-proclaimed math prodigy from Australia, dropped out of college in 2016 to start a hedge fund in New York he called Virgil Capital. He told potential clients he had developed an algorithm called Tenjin to monitor cryptocurrency exchanges around the world to seize on price fluctuations. A little more than a year after it started, he bragged the fund had returned 500%, a claim that produced a flurry of new money from investors.He became so flush with cash, Qin signed a lease in September 2019 for a $23,000-a-month apartment in 50 West, a 64-story luxury condo building in the financial district with expansive views of lower Manhattan as well as a pool, sauna, steam room, hot tub and golf simulator.In reality, federal prosecutors said, the operation was a lie, essentially a Ponzi scheme that stole about $90 million from more than 100 investors to help pay for Qin's lavish lifestyle and personal investments in such high-risk bets as initial coin offerings. At one point, facing client demands for their money, he variously blamed "poor cash flow management" and "loan sharks in China" for his troubles. Last week, Qin, now 24 and expressing remorse, pleaded guilty in federal court in Manhattan to a single count of securities fraud."I knew that what I was doing was wrong and illegal," he told U.S. District Judge Valerie E. Caproni, who could sentence him to more than 15 years in prison. "I deeply regret my actions and will spend the rest of my life atoning for what I did. I am profoundly sorry for the harm my selfish behavior has caused to my investors who trusted in me, my employees and my family."Eager InvestorsThe case echoes similar cryptocurrency frauds, such as that of BitConnect, promising people double-and triple-digit returns and costing investors billions. Ponzi schemes like that show how investors eager to cash in on a hot market can easily be led astray by promises of large returns. Canadian exchange QuadrigaCX collapsed in 2019 as a result of fraud, causing at least $125 million in losses for 76,000 investors.While regulatory oversight of the cryptocurrency industry is tightening, the sector is littered with inexperienced participants. A number of the 800 or so crypto funds worldwide are run by people with no knowledge of Wall Street or finance, including some college students and recent graduates who launched funds a few years ago.Qin's path started in college, too. He had been a math whiz who planned on becoming a physicist, he told a website, DigFin, in a profile published in December, just a week before regulators closed in on him. He described himself on his LinkedIn page as a "quant with a deep interest and understanding in blockchain technology."In 2016, he won acceptance into a program for high-potential entrepreneurs at the University of New South Wales in Sydney with a proposal to use blockchain technology to speed up foreign exchange transactions. He also attended the Minerva Schools, a mostly online college based in San Francisco, from August 2016 through December 2017, the school confirmed.Crypto BugHe got the crypto bug after an internship with a firm in China, he told DigFin. His task had been to build a platform between two venues, one in China and the other in the U.S., to allow the firm to arbitrage cryptocurrencies.Convinced he had happened upon a business, Qin moved to New York to found Virgil Capital. His strategy, he told investors, would be to exploit the tendency of cryptocurrencies to trade at different prices at various exchanges. He would be "market-neutral," meaning that the firm's funds wouldn't be exposed to price movements.And unlike other hedge funds, he told DigFin, Virgil wouldn't charge management fees, taking only fees based on the firm's performance. "We never try to make easy money," Qin said.By his telling, Virgil got off to a fast start, claiming 500% returns in 2017, which brought in more investors eager to participate. A marketing brochure boasted of 10% monthly returns -- or 2,811% over a three-year period ending in August 2019, legal filings show.His assets got an extra jolt after the Wall Street Journal profiled him in a February 2018 story that touted his skill at arbitraging cryptocurrency. Virgil "experienced substantial growth as new investors flocked to the fund," prosecutors said.Missing AssetsThe first cracks appeared last summer. Some investors were becoming "increasingly upset" about missing assets and incomplete transfers, the former head of investor relations, Melissa Fox Murphy, said in a court declaration. (She left the firm in December.) The complaints grew."It is now MID DECEMBER and my MILLION DOLLARS IS NOWHERE TO BE SEEN," wrote one investor, whose name was blacked out in court documents. "It's a disgrace the way you guys are treating one of your earliest and largest investors."Around the same time, nine investors with $3.5 million in funds asked for redemptions from the firm's flagship Virgil Sigma Fund LP, according to prosecutors. But there was no money to transfer. Qin had drained the Sigma Fund of its assets. The fund's balances were fabricated.Instead of trading at 39 exchanges around the world, as he had claimed, Qin spent investor money on personal expenses and to invest in other undisclosed high-risk investments, including initial coin offerings, prosecutors said.So Qin tried to stall. He convinced investors instead to transfer their interests into his VQR Multistrategy Fund, another cryptocurrency fund he started in February 2020 that used a variety of trading strategies -- and still had assets.'Loan Sharks'He also sought to withdraw $1.7 million from the VQR fund, but that aroused suspicions from the head trader, Antonio Hallak. In a phone call Hallak recorded in December, Qin said he needed the money to repay "loan sharks in China" that he had borrowed from to start his business, according to court filings in a lawsuit filed by the Securities and Exchange Commission. He said the loan sharks "might do anything to collect on the debt" and that he had a "liquidity issue" that prevented him from repaying them."I just had such poor cash flow management to be honest with you," Qin told Hallak. "I don't have money right now dude. It's so sad."When the trader balked at the withdrawal, Qin attempted to take over the reins of VQR's accounts. But by now the SEC was involved. It got cryptocurrency exchanges to put a hold on VQR's remaining assets and, a week later, filed suit.Asset RecoveryBy the end, Qin had drained virtually all of the money that was in the Sigma Fund. A court-appointed receiver who is overseeing the fund is looking to recover assets for investors, said Nicholas Biase, a spokesman for Manhattan U.S. Attorney Audrey Strauss. About $24 million in assets in the VQR fund was frozen and should be available to disperse, he said."Stefan He Qin drained almost all of the assets from the $90 million cryptocurrency fund he owned, stealing investors' money, spending it on indulgences and speculative personal investments, and lying to investors about the performance of the fund and what he had done with their money," Strauss said in a statement.In South Korea when he learned of the probe, Qin agreed to fly back to the U.S., prosecutors said. He surrendered to authorities on Feb. 4, pleaded guilty the same day before Caproni, and was freed on a $50,000 bond pending his sentencing, scheduled for May 20. While the maximum statutory penalty calls for 20 years in prison, as part of a plea deal, prosecutors agreed that he should get 151 to 188 months behind bars under federal sentencing guidelines and a fine of up to $350,000.That fate is a far cry from the career his parents had envisioned for him -- a physicist, he had told DigFin. "They weren't too happy when I told them I had quit uni to do this crypto thing. Who knows, maybe someday I'll complete my degree. But what I really want to do is trade crypto."The case is U.S. v Qin, 21-cr-75, U.S. District Court, Southern District of New York (Manhattan)(Updates with comment from prosecutor and case caption)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

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The ETF owns stocks of all sizes, ranging from the largest to smallest with sufficient liquidity for everyday investors. Never bet against America. – Warren Buffett, May 04, 2020 To get the entire U.S. market in a single fund, the iShares Core S&P Total U.S. Stock Market ETF (ITOT) is an excellent choice for investors. The expense ratio is 0.03% beating most ETFs in the market. The fund holds large, mid, small, and micro-cap stocks from the broad U.S. equity market with enough liquidity coverage for the investors. The market-cap-weighted approach gives ITOT an advantage over other funds where price changes of the assets reflect the weightings in the market. Efficient-market theorists have been favoring the strategy of indexing the entire market and funds like ITOT can be an entire portfolio holding in one. Recent Market Performances Investors are keeping ITOT on their radar since the fund is getting momentum, especially after a sudden drop during the Covid-19 pandemic. The ETF was trading at $61.20 on March 11th when the World Health Organization recognized Covid-19 as a pandemic. ITOT immediately plunged 18.84% in only 12 days. Smart investors took the opportunity and locked a position in the fund, with the ETF now trading at $69.42. The shares have now rallied more than 39% from the lows and the fund is roughly 9.34% from its 52-week high price of $76.57. If momentum can continue, we will see more gains for the holding. Breakdown of its constituents Technology, healthcare, and financials dominate the underlying holdings of the fund. ITOT has a market cap of $25.05 billion. It holds 3620 well-diversified companies in the basket, so single-company risk has been effectively eliminated. Source: Seeking Alpha Source: Seeking Alpha Looking at the top 5 sectors, we have 22.26% in technology, 15.44% in healthcare, 13.56% in financials, 10.63% in Consumer Cyclical, and 10.15% in Communication, which make up comprising 72% of the total holding. Since the Fed has implemented monetary easing, investors benefited by holding the diversified sectors throughout the pandemic recession, especially in technology. Information technology giants - Microsoft (MSFT), Apple (AAPL), Amazon (AMZN), Facebook (FB), and Alphabet (GOOGL) - are dominating the top spots of the fund. These stocks are generating enough cash flow to save investors from any market uncertainty in the future. We also have top names like Johnson & Johnson (JNJ), Berkshire Hathaway (BRK.B), and JPMorgan Chase (JPM) providing more stability to your portfolio in the financial sector. Source: iShares One of the longest-running bull markets in history was washed away recently by the coronavirus shutdown. However, there are signs of a sharp rebound as the U.S. economy reopened in the last few weeks. Since the fund's investment objective is not to beat the tracked index, it did not take a defensive position during the market decline. Furthermore, ITOT reduced the risk of poor stock selection. ITOT also showed a stronger uptrend since the fourth quarter of 2019 when the US-China trade relationship showed improvements with a phase 1 trade deal signed. Source: Yahoo Finance With quality holdings in the portfolio, the current P/E ratio of the ETF is reflecting the industry average and is at a reasonable 19.31, given the uncertainty going forward. For every portfolio, the core is the foundation. The recent market conditions have made it an attractive long-term entry point, especially for an all-US portfolio. The lower interest rate environment is supportive of stocks, and re-risking your portfolio with a total market cap portfolio like ITOT is an excellent idea. Source: Seeking Alpha Both the technology and healthcare sectors have the potential to grow exponentially in the current pandemic. This is a cyclical megatrend, which investors shouldn't overlook. ITOT also outperformed its peers in the 3- and 5-year dividend growth rate, in the table above. What if the slowdown continues? We have entered into a situation where uncertainty is the new normal. Investors need to rethink their portfolio, and ETFs like ITOT can address these challenges and mitigate them by ignoring short-term market sentiments and investing for the long term. With an average daily trading volume of $236.82 million, ITOT has extremely high liquidity offered to the investors. The top 5 companies owned are also highly liquid in terms of cash and current ratio. If there is a prolonged economic downturn, this portfolio should remain well-capitalized. Cash (in $bn) Current Ratio Microsoft Corporation 137.64 2.90 Apple Inc. 94.05 1.50 Amazon 49.29 1.08 Facebook, Inc. 60.29 4.60 Alphabet Inc. 117.23 3.66 Data based on Q1-20 results Factors in favor The turnover rate is also an important factor to keep the transaction costs and taxes under control. ITOT has a 6% turnover, making it a tax-efficient fund. On the other hand, a 'representative sample of securities strategy' is used where needed, as some securities can be replicated with higher liquidity. Risks to consider Higher Beta: The 5-year beta is 1.04 which indicates the price swing is slightly above the industry average. Concentration risk: Since the purpose of the fund is to track the performance of the S&P index, there is a chance that it might underperform in certain conditions. Building your total exposure in ITOT can be an excellent strategy throughout the 2020s. As the market is becoming more uncertain, investors need a safe place to invest their money that is extremely cheap, and efficient. To overcome these uncertain times, ITOT can be an overall solution for every investor, as either a core or total holding. Don't bet against America. *Like this article? Don't forget to hit the Follow button above! Subscribers told of melt-up March 31. Now what? Sometimes, you might not realize your biggest portfolio risks until it's too late. That's why it's important to pay attention to the right market data, analysis, and insights on a daily basis. Being a passive investor puts you at unnecessary risk. When you stay informed on key signals and indicators, you'll take control of your financial future. My award-winning market research gives you everything you need to know each day, so you can be ready to act when it matters most. Click here to gain access and try the Lead-Lag Report FREE for 14 days. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Additional disclosure: This writing is for informational purposes only and Lead-Lag Publishing, LLC undertakes no obligation to update this article even if the opinions expressed change. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. It also does not offer to provide advisory or other services in any jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Lead-Lag Publishing, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

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Value investing will come back in favor in the future, notwithstanding a long period of underperformance. With value investing underperforming in recent years (the Russell 1000 Value Index has underperformed the Russell 1000 Growth Index over the past 12 years), and the chances of a recession increasing (in June, Jeffrey Gundlach, chief executive officer of DoubleLine Capital, said that the odds of the United States sliding into a recession in the next six months have risen to 40-45% and the odds were 65% within the next year), the Weitz Balanced Fund (WBALX) offers investors a conservative investment option which should produce satisfactory long-term returns with significantly less volatility than the S&P 500. I am currently long WBALX and most recently added to my position on July 16, 2019. This is the type of fund that will help you build wealth, albeit in tortoise like fashion. As Buffet once said, however: "There is nothing wrong with getting rich slowly." The Fund The Weitz Balanced Fund (WBALX) is a conservative no-load balanced mutual fund with a goal of capital preservation, long-term growth and current income. Weitz Investment Management, started by Wallace Weitz, a legendary value investor from Omaha, Nebraska (home of an even more legendary value investor), manages the fund. Wally Weitz and the team he has built are influenced by the value investing model of Benjamin Graham and Warren Buffett. The fund has been managed by Bradley P. Hinton since its inception in 2003 and, in the early years Wally Weitz was part of the investment management team. The Weitz Balanced Fund generally invests at least 25% of its assets in common stocks and securities that are convertible to stock. At least 25% of total assets of WBALX are invested in investment-grade bonds to offer current income opportunities. WBALX may also invest up to 20% of its total assets in unrated or non-investment grade fixed income securities. Currently, approximately 44% of the fund's assets are composed of common stocks and the overall asset allocation is as follows as of June 30, 2019: Asset Allocation (% of Net Assets) Balanced Fund 49.8% Bonds 43.9% Common Stocks 6.3% Cash Equivalents/Other Recent short-term performance has been solid (the fund outperformed its primary benchmark as noted in management's Q2 2019 letter). Overall, management's outlook going forward is cautiously optimistic: In our view, the Fund remains well positioned to achieve our three investment objectives: long-term capital appreciation, capital preservation and current income. We think our stocks are still reasonably priced, even after sizeable first half gains. Our bonds should provide ballast as the investing tides ebb and flow, along with a layer of current income. While we feel good about the three-to-five-year outlook, it is prudent to temper return expectations after healthy gains in both stocks and bonds." Annualized returns over the 10, 5, 3- and 1- year periods have been 8.56% (10-yr.), 5.07% (5-yr.), 7.47% (3-yr.) and 9.35% (1-yr.), respectively. As of June 30, 2019, the Fund's top equity holdings are as follows. Top 10 Stock Holdings (WBALX) Net Assets Security 2.5% Berkshire Hathaway Inc. - Class B 2.3% Laboratory Corp. of America Holdings 2.3% Thermo Fisher Scientific Inc. 2.2% Visa Inc. - Class A 2.1% Mastercard Inc. - Class A 2.0% Linde plc 2.0% Diageo plc - Sponsored ADR 2.0% Charter Communications, Inc. - Class A 1.8% Alphabet, Inc. - Class C 1.8% Microsoft Corp. For its bond portfolio, WBALX casts a wide net to find fixed income investment opportunities that meet the fund's stringent criteria. The firm does not focus solely on yield; instead it searches for investments that will provide a reasonable risk-adjusted return and, just like its stock picking, the fund managers examine potential opportunities until they find the right investment at the right price, with an emphasis on quality. As of June 30, 2019, the bond portfolio currently consists of: Treasuries (53%), U.S. Government Agency MBS (1.6%), Aaa/AAA (3.8%), Aa/AA (1%), A/A (12.1%), Baa/BBB (17.5%), B/B (0.8%), Non-Rated (1.5%) and cash equivalents and "other" making up the balance of the fund's bond portfolio. Fees are reasonable WBALX is a no-load fund, meaning there are no front end or back end fees involved in the purchase of shares. With a net expense ratio of 0.88%, WBALX is relatively attractive compared to other actively managed funds in the balanced fund category. Potential Concerns 1. If value continues to underperform, WBALX will likely continue to underperform its index, namely the Morningstar Moderately Conservative Target Risk Index. 2. WBALX's bond portfolio has a duration of less than 2 years, which will protect the fund in a rising rate environment, but if rates are going to zero as some smart investors seem to think (e.g., Kyle Bass), the fund's (current) low duration will likely cause the funds to miss out on capital appreciation opportunities. The fund's managers have even acknowledged this in their recent Q2 2019 letter (linked above), noting: We maintained our "short and high-quality" approach to managing the Fund's bond portfolio. To be fair, "long and low-quality" has worked even better in fixed income this year, but we have no problem trading some potential upside for additional peace of mind." 3. If the market continues in bull market mode (spurred on by expected Fed rate cuts), this conservative fund will significantly underperform the S&P 500. 4. The fund is unconventional in that it is willing to (1) hold cash, (2) run a concentrated portfolio, and (3) avoid managing to any particular benchmark. Of course, this is also a strength, but the key point is that prospective investors need to support the fund's approach as it is not a closet index hugger and has a great deal of flexibility. Concluding Thoughts WBALX is a solid mutual fund with experienced management. It is probably most suitable for investors nearing retirement, for risk adverse investors and for investors like me who think the current bull market is long in the tooth (and are looking for investments that will hold up well in a market drawdown, but still do ok if the bull market should continue). Of course, investors should do their own due diligence to determine whether this fund is suitable for them. Disclosure: I am/we are long WBALX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Getty Images They say on Wall Street that if you want to make a small fortune, start by investing a large one. The billionaires and big-time money managers below all have fortunes of various sizes, and studying which stock picks they've chased with their capital ain't a half-bad idea. After all, there's a reason why the rich get richer. No, you can't become a billionaire solely by copying their every move, but it's always interesting - and often constructive - to know what the "smart money" is up to. Their resources for research, as well as their intimate connections to insiders and others, can give them a unique insight into their stock picks. Here are 50 top stock picks of the billionaire class. In all cases, these companies represent major holdings (5% or more) of at least one ultra-wealthy person or large hedge fund, if not several. In many cases, these stocks are owned by multiple billionaires. And while several of these investments are popular blue chips, others keep a much lower profile. Market value: $170.4 billion Billionaire investor: Suvretta Capital Management Percent of portfolio: 7.4% Adobe (ADBE, $353.64) has always had little competition in creating software for designers and other creative types. Photoshop, for example, is so popular that it's often used generically to refer to any program that can edit and manipulate graphics. But the company took a massive step a few years ago when it migrated its vast portfolio of offerings to the cloud - a move that still is paying off in spades. More recently, in late 2018, it moved into business-to-business marketing when it completed its acquisition of Marketo. Suvretta Capital Management, with $4.5 billion in assets under management (AUM), is among several big-money managers that have Adobe among their top stock picks. In fact, Chief Investment Officer Aaron Cowen has made ADBE the hedge fund's single-largest holding, accounting for more than 7% of its portfolio. Getty Images Market value: $4.4 billion Billionaire investor: Leon Black (Apollo Global Management) Percent of portfolio: 48.9% ADT (ADT, $5.73), which provides home alarm and security systems for homes and businesses, has something most investors adore: a subscription business. Customers send checks like clockwork to maintain their service. Billing ranges from $36.99 to $52.99 a month. A predictable cash stream is just one of the company's attractive attributes. Safehome.org gives the company high marks: "Reliable systems backed by outstanding service. It's no wonder ADT is a household name with 7 million customers and counting. When you're ready for the big guns in home security, you go with ADT." Analysts surveyed by S&P Global Market Intelligence, meanwhile, have an average recommendation of Buy on ADT. The company did shrink recently, however, selling off its Canadian operations in late 2019 to focus on higher-margin opportunities in the U.S. market. ADT dominates the other stock picks held in Billionaire Leon Black's Apollo Management Holdings, a subsidiary of Apollo Global Management (APO). Apollo Management Holdings has a whopping 48.9% of its portfolio socked away in ADT. Black arranged to buy ADT in 2016 for about $7 billion. Story continues SEE ALSO: 25 Blue Chips With Brawny Balance Sheets Alibaba Group Getty Images Market value: $543.7 billion Billionaire investor: Joseph Tsai Percent of portfolio: 100% Jack Ma is probably the most famous billionaire from China. The founder of Alibaba (BABA, $202.67) created an e-commerce giant that propelled his net worth to truly stratospheric levels. Forbes puts his wealth at $42 billion. Less well-known but plenty rich himself is Joseph Tsai. The Canadian billionaire who was born in Taiwan is the vice chairman and co-founder of BABA. Jack Ma may have been Alibaba's public face, but Tsai was no less important behind the scenes. Tsai famously accepted an initial salary of just $50 a month when he first met Jack Ma in 1999. In addition to owning 3.4% of BABA's shares outstanding, Tsai also is the owner of the NBA's Brooklyn Nets. Forbes says Tsai's net worth comes to $10.9 billion. SEE ALSO: The 10 Best Chinese Stocks You Can Buy Alphabet Getty Images Market value: $925.8 billion Billionaire investor: Ruane, Cunniff & Goldfarb Percent of portfolio: 16.6% William Ruane and Richard Cunniff, of Ruane, Cunniff & Goldfarb, which boasts $8 billion in AUM, own a slew of Google-parent Alphabet's (GOOGL, $1,346.70) stock. Between ownership of both Class A GOOGL and Class C GOOG shares, the hedge fund sits on 1 million shares worth $135 million. Taken together, the Google stakes come to nearly 17% of the fund's total value. Shares in GOOGL have declined 12.6% from the market top in February vs. a drop of 13.6% for the S&P 500. Retail investors might be more familiar with the mutual fund simply called Sequoia (SEQUX), which allows smaller investors to benefit from Ruane's and Cunniff's investing acumen. SEE ALSO: 11 Best Tech Stocks for the New Coronavirus Norm Amazon.com Getty Images Market value: $1.23 trillion Billionaire investor: Eagle Capital Management Percent of portfolio: 5.3% When it comes to billionaire investors in Amazon.com (AMZN, $2,474.00), the first name that should come to mind is that of CEO Jeff Bezos. The world's richest man is worth $149 billion, according to Forbes. Even after his divorce from ex-wife MacKenzie Bezos, the AMZN founder is still the e-commerce giant's top shareholder, with 11.1% of its shares outstanding. Naturally, a long list of hedge fund investors will have a company as massive and successful as AMZN among their top stock picks. Among those that stick out is Eagle Capital Management. Managing director Ravenel Boykin Curry IV has committed 5.3% of the fund's portfolio to AMZN. Eagle Capital Management's holdings in Amazon are currently worth about $2.2 billion. Analysts expect Amazon to generate average annual earnings growth of 36% over the next three to five years. They're also overwhelmingly bullish on the stock, with 32 Buys, 1 Hold and 1 Sell over the past three months. American Express Getty Images Market value: $73.5 billion Billionaire investor: Warren Buffett (Berkshire Hathaway) Percent of portfolio: 7.8% Warren Buffett likes to say that his preferred holding period is forever, and that's about how long he has had a stake in American Express (AXP, $91.25). Buffett picked up his initial stake in the credit card company in 1963, when a struggling AmEx badly needed capital. Berkshire obliged, getting favorable terms on its investment. Berkshire owns 151.6 million shares in the Dow Jones Industrial Average component, worth about $13.8 billion today. That makes the holding company AXP's largest shareholder with 18.8% of its shares outstanding. AmEx is not small potatoes to Warren Buffett either, seeing as it accounts for 7.8% of Berkshire Hathaway's equity stock picks. SEE ALSO: 20 Top Stocks to Invest In During a Recession American International Group Getty Images Market value: $21.9 billion Billionaire investor: Steve Cohen (Point72 Europe) Percent of portfolio: 8.4% Once upon a time, American International Group (AIG, $25.43) was an insurance industry behemoth and a component of the Dow Jones Industrial Average. But the Great Recession changed everything. If not for a $182 billion bailout, AIG would have gone bust - and brought much of the global financial system with it. Today, AIG remains one of the world's largest insurers, with business in general life, auto, home, business and travel insurance. The company also sells retirement products like fixed and variable annuities. And if that weren't enough, AIG has a financial services and an asset management business. Billionaire Steve Cohen, who Forbes estimates is worth $14 billion, has a sizable stake in the insurer by way of Point72 Europe. Cohen's SAC Capital hedge fund was forced to shut down in 2013 because of insider trading. SEE ALSO: 19 Dividend Aristocrats That Have Gone on Deep Discount Ameriprise Financial Getty Images Market value: $14.1 billion Billionaire investor: Lyrical Asset Management Percent of portfolio: 5.2% Lyrical Asset Management ($6.8 billion in AUM) was founded in 2008 by Andrew Wellington and Jeff Keswin. Although it doesn't have a long lineage, the fund is old school in its approach. Lyrical pursues a buy-and-hold strategy that limits the fund's total trades to only a handful per year. Keswin and Wellington want to hold positions for the long haul. Ameriprise Financial (AMP, $114.94) represents one such bet. The fund first invested in the diversified financial services company in the fourth quarter of 2011. Today, AMP accounts for more than 5% of Lyrical's portfolio. AMP has taken its lumps like the rest of the market since it topped out in February. Longer term, however, it has been a solid holding. Shares are up 213% over the past 10 years on a total return basis (price plus dividends). The S&P 500's total return comes to 202% over the same span. That outperformance is in part thanks to AMP's 3.4% dividend yield, which represents a decent income stream for new investors. SEE ALSO: 25 Dividend Stocks the Analysts Love the Most Amyris Getty Images Market value: $442.5 million Billionaire investor: John Doerr Percent of portfolio: 45.8% John Doerr, the investor and venture capitalist, is best known as chairman of Kleiner Perkins, which has been called Silicon Valley's most famous investment firm. Forbes puts his wealth at $8.6 billion, which means he can strike on his own when he wishes. That's the case with Amyris (AMRS, $2.70), which develops sustainable ingredients and chemicals for the beauty, health and fragrances and flavors industries. Doerr is the company's top shareholder with almost 36% of AMRS's shares outstanding. This small-cap stock pick doesn't get a lot of attention from Wall Street, but the two analysts who do track it are bullish. Meanwhile, AMRS is forecast to report its first-ever profit in 2021 after racking up annual net losses every year since 2010. Apple Getty Images Market value: $1.29 trillion Billionaire investor: Warren Buffett (Berkshire Hathaway) Percent of portfolio: 29.8% Warren Buffett never much liked technology stocks, but he has fallen head over heels for Apple (AAPL, $293.80). Indeed, at nearly 30%, AAPL is the single largest holding in Berkshire Hathaway's equity portfolio. And that's after Buffett trimmed roughly 3.7 million shares during Q4 2019. The Oracle of Omaha took his first bite in early 2016 and decided he liked the taste of the iPhone maker. "I do not focus on the sales in the next quarter or the next year," Buffett has said. "I focus on the ... hundreds and hundreds and hundreds of millions of people who practically live their lives by (the iPhone)." With more than 250 million shares, Berkshire is Apple's third-largest shareholder after Vanguard and BlackRock - giants of the passively managed index fund universe. Buffett, with a net worth of roughly $74 billion, according to Forbes, owns 16% of Berkshire Hathaway's shares outstanding. Bausch Health Companies Getty Images Market value: $6.4 billion Billionaire investor: John Paulson (Paulson & Co.) Percent of portfolio: Bausch Health Companies (BHC, $18.12) used to be known as Valeant Pharmaceuticals, and it would be happy if investors forgot that. A massive debt load, allegations of improper accounting and other controversies caused the stock to collapse in 2015. BHC has since undergone an overhaul, and John Paulson, billionaire owner of hedge fund Paulson & Co. ($4.6 billion in AUM), is a big believer in the remade entity. True, Paulson was a large stakeholder in 2015, before the company completely fell apart. Perhaps he should get credit for sticking to his guns. BHC is Paulson & Co.'s largest position, accounting for 13.5% of its portfolio. Shares are down 23% over the past 52 weeks, but analysts' average recommendation is Buy, according to S&P Global Market Intelligence. Paulson's fund owns 5.9% of BHC's shares outstanding, worth about $378 million. Baxter International Getty Images Market value: $45.0 billion Billionaire investor: Daniel Loeb (Third Point) Percent of portfolio: 16.7% Hedge-fund billionaire Daniel Loeb is known for making big bets. He's certainly put a lot of money at the mercy of Baxter International (BAX, $88.78) stock. His Third Point fund's 17.5 million shares of the medical equipment outfit are collectively worth more than $1.5 billion. As of the fourth quarter, BAX was the fund's top holding, accounting for 16.7% of its total value. Furthermore, Third Point is Baxter's fifth largest investor with 3.5% of its shares outstanding. Loeb first disclosed his position in Baxter in August 2015. He has sold more than half of his original 38 million shares quite profitably, and the remaining stake continues to do well. BAX is up 17% over the past 52 weeks on a price basis, vs. a 1% loss for the S&P 500. SEE ALSO: 10 Health and Pharmaceutical Companies Fighting the Coronavirus Berkshire Hathaway Getty Images Market value: $454.9 billion Billionaire investor: Bill and Melinda Gates (Bill & Melinda Gates Foundation Trust) Percent of portfolio: 53% Warren Buffett is the best-known billionaire owner of Berkshire Hathaway (BRK.B, $187.36) stock, but he's not the only one. The Bill & Melinda Gates Foundation Trust - created by Microsoft founder Bill Gates and his wife, Melinda - has more than half of its portfolio concentrated in Buffett's baby. Gates - worth $105.6 billion, according to Forbes - sits on Berkshire's board of directors. His foundation trust owns 49.9 million of the holding company's shares, worth $9.3 billion today. Other top stock picks of the Gates Foundation Trust include Dow components Caterpillar (CAT) and Walmart (WMT). Brink's Courtesy Paul Sableman via Creative Commons 2.0 Market value: $2.6 billion Billionaire investor: P2 Capital Partners Percent of portfolio: 10.7% P2 Capital Partners manages securities worth just $1.4 billion, but then it doesn't need to build big stakes to get what it wants. As an activist investor, the hedge fund needs only to own enough shares outstanding to force changes it deems necessary at its target companies. CEO and founder Claus Jorgen Moller maintains a highly concentrated portfolio with just 16 positions. In addition to Brink's, major P2 Capital holdings include Nexstar Media (NXST), Acadia Healthcare (ACHC) and Hilton Grand Vacations (HGV). As for Brink's Co. (BCO, $51.12), P2 holds about 1.6 million shares, or about 3.3% of the company's shares outstanding. That stake currently is worth about $84 million. Stock in the private security and protection company are off by more than a third over the past year. Bristol-Myers Squibb Getty Images Market value: $137.6 billion Billionaire investor: Jim Simons (Renaissance Technologies) Percent of portfolio: 3.0% Bristol-Myers Squibb (BMY, $60.81) is popular with analysts and happens to be one of the 50 best stocks of all time. The pharmaceutical giant also happens to be the single largest holding of Jim Simons' Renaissance Technologies hedge fund ($139 billion in AUM). Although we normally require stock picks to account for at least 5% of a fund's holdings, we're making an exception in this case. As the world's 36th richest man, worth $21.6 billion, it's interesting to know which stock is his biggest bet. Besides, Renaissance maintains a highly diversified portfolio. No individual stock is ever going to contribute an outsized slice of the fund's value. Renaissance's top 10 holdings account for 12.7% of the portfolio. The remainder is distributed among hundreds of stocks. The fund's 60.2 million shares, worth $3.7 billion, equate to 2.7% of BMY's shares outstanding. Caesars Entertainment Getty Images Market value: $6.6 billion Billionaire investor: Carl Icahn Percent of portfolio: 6% More than one of activist billionaire investor Carl Icahn's holdings are getting hammered by the pandemic-led recession. Among them is Caesars Entertainment (CZR, $9.66), which operates Caesars Palace, Bally's, Harrah's and other casinos. Hotels and casinos are among the very hardest hit businesses by the lockdown, and CZR is no exception. Shares are down 29% so far this year vs. a drop of 10% for the S&P 500. The Las Vegas casino company has furloughed workers, but that's no substitute for revenue, which has dried up. Caesars accounts for 6% of Icahn's portfolio, and the stake is worth about $1.1 billion. Icahn also is CZR's single largest shareholder, with almost 17% of its shares outstanding. SEE ALSO: 13 Stock Picks Getting Hit by Coronavirus Fears Campbell Soup Getty Images Market value: $15.1 billion Billionaire investor: 6.9% Percent of portfolio: Daniel Loeb (Third Point) Campbell Soup (CPB, $49.98) has proven to be a (cough) canny investment this year. Shares in companies that make foods with long shelf lives have proven to be winners during a time in much of the world is sheltering at home because of COVID-19. Billionaire hedge fund macher Daniel Loeb first disclosed his stake in the soup company in August 2018. His Third Point hedge fund disclosed that it spent about $686.4 million to acquire a 5.65% position. Today, Third Point owns 4.1% of CPB's shares outstanding. Third Point is known as an activist investor, but there's nothing like a global pandemic to light a fire under shares in packaged food and other consumer staples. CPB is up nearly 5% since the market top in February. The S&P 500 is down 13% since then. Charter Communications Getty Images Market value: $116.0 billion Billionaire investor: Alexandre Behring (3G Capital Partners) Percent of portfolio: 17.2% Charter Communications (CHTR, $495.23) is just one of the major holdings of 3G Capital Partners, a hedge fund within 3G Capital. And Alexandre Behring is just one of 3G Capital's billionaires. Behring, with a net worth of $5.9 billion, works alongside fellow billionaires Jorge Paulo Lemann ($14.1 billion), Marcel Telles ($8.7 billion) and Carlos Alberto Sicupira ($6.7 billion). The Brazilian-American firm (AUM of $31.3 billion) holds 238,368 shares worth about $118 million within its 3G Capital Partners hedge fund; it's third largest among the fund's stock picks after Comcast (CMCSA) and Fox Corp. (FOXA). 3G Capital has made its mark on the capital markets in a big way. In 2015, it partnered with Berkshire Hathaway to create Kraft Heinz (KHC) by combining H.J. Heinz and Kraft Foods Group; its 3G Global Food Holdings currently owns 20% of KHC's shares outstanding. Earlier in its history, it purchased Burger King in 2010, and four years later merged it with Tim Hortons. SEE ALSO: The 20 Best ETFs to Buy for a Prosperous 2020 Chipotle Mexican Grill Getty Images Market value: $24.4 billion Billionaire investor: 15.2% Percent of portfolio: Bill Ackman (Pershing Square Capital) Bill Ackman of Pershing Square Capital can take a bow over this stock pick. Five years ago, Chipotle Mexican Grill (CMG, $878.55) was laid low by several outbreaks of foodborne illness, including two E. coli outbreaks that sickened 60 people. It wasn't clear at the time that the fast-casual restaurant chain could mount a comeback in the age of social media. Shares lost about two-thirds of their value from their pre-crisis level to a 2018 low. But hedge fund billionaire Bill Ackman was greedy where others were fearful, stocking up on CMG with almost 10% of its shares outstanding. The Tex-Mex eatery rebounded, then rebounded some more; the stock has shot up nearly 250% since its early 2018 low. Pershing Square remains a top-five shareholder in CMG to this day, holding 1.2 million shares worth about $1.1 billion. Cigna Getty Images Market value: $72.8 billion Billionaire investor: Leon Cooperman Percent of portfolio: 6.1% Hedge fund billionaire Leon Cooperman net worth is $3.2 billion, per Forbes, stemming from his Omega Advisors hedge fund. In 2016 Cooperman closed Omega and converted it to a family office. One of the most prominent stocks in his private wealth management firm is Cigna (CI, $195.78), which has held up pretty well so far in 2020. Shares in the health insurance company are down 4% for the year-to-date vs. a decline of 10% for the S&P 500. That's got to be something of a relief for Cooperman considering CI accounts for more than 6% of the value of his holdings. Cooperman also has a stake in UnitedHealth Group (UNH), a health insurance company and component of the Dow Jones Industrial Average. Citigroup Getty Images Market value: $101.1 billion Billionaire investor: ValueAct Holdings Percent of portfolio: ValueAct Holdings ($13.9 billion in AUM) maintains a fairly concentrated portfolio of just 25 stocks. Citigroup (C, $48.56), the nation's fourth largest bank by assets under management, is its largest position by a decent margin. Almost 22% of the value of the fund's holdings are held in C stock. Citigroup's wager of 27 million shares is currently worth $1.3 billion. Citigroup is perennially among the hedge fund crowd's top stock picks. A money-center bank with a massive market value, share liquidity and central place in the financial system will almost always be popular among professional asset allocators. The 4.2% yield on the dividend is another plus. Analysts' average recommendation in the name is Buy, although its long-term growth rate is forecast to hit only 1.1% over the next three to five years. CME Group Getty Images Market value: $63.9 billion Billionaire investor: Prana Capital Management Percent of portfolio: 5.5% Prana Capital Management is a small but feisty competitor in the hedge fund industry. It has just four clients and assets under management (AUM) of only $613 million. It's a smaller fund, but it's not afraid to take on relatively concentrated positions. It also embraces volatility, which is something most investors could do without. CME Group (CME, $178.21) represents a significant position for Prana, taking up more than 5% of the value of its holdings. CME owns the Chicago Mercantile Exchange, Chicago Board of Trade and New York Mercantile Exchange, among other exchanges. CME stock is getting beaten up like the rest of the market these days, but it has an enviable longer-term track record. Shares have roughly doubled over the past five years against a gain of 40% for the S&P 500. CVR Energy Getty Images Market value: $2.4 billion Billionaire investor: Carl Icahn Percent of portfolio: 11% Activist billionaire investor Carl Icahn's largest holding is Icahn Enterprises (IEP), his publicly traded investment vehicle. After IEP, however, comes CVR Energy (CVI, $23.85), which is in the oil refining and nitrogen fertilizer manufacturing business. Icahn, who took control of CVI in 2012 by means of a hostile takeover, might come to regret winning that battle given what's happening to the energy business today. Oil prices have collapsed, leaving no corner of the sector untouched. Indeed, CVI is off nearly 50% over the past 52 weeks vs. a slight decline for the broader market. Delta Air Lines Getty Images Market value: $16.5 billion Billionaire investor: Warren Buffett (Berkshire Hathaway) Percent of portfolio: 1.7% Airline stocks are among the highest-profile losers amid the coronavirus lockdown. Shares in Delta Air Lines (DAL, $25.91) have lost more than half their value so far this year and are primed for further losses. That's bad news for Warren Buffett, who shocked long-time Buffettologists when he took stakes in a number of major airline stock picks - Delta included - in 2016. The Oracle had long criticized the industry for destroying piles of capital, but he decided the past was the past. UPDATE: Buffett has come to regret that change of heart. In early April, BRK.B sold 18% of its stake in DAL, just as the company said revenue will plunge 90% in the second quarter. The reduction came to almost 13 million Delta shares worth about $314 million. Then, on May 2, Buffett announced at Berkshire's annual meeting that his holding company had exited its stakes in all four major airlines, including Delta. Berkshire still was DAL's largest shareholder with 9.3% of shares outstanding, or 58.9 million shares, as of the early April announcement. But Buffett now is out of Delta ... and airlines altogether. Extended Stay America Getty Images Market value: $1.9 billion Billionaire investor: SouthernSun Asset Management Percent of holdings: 5.5% With only $1.1 billion in assets, Memphis-based management firm SouthernSun Asset Management is a small player. But it isn't afraid to make big bets. More than 5% of its portfolio is invested in an off-the-radar hotel chain called Extended Stay America (STAY, $10.87). The hotel chain serves a niche audience, accommodating guests who need to stay somewhere for more than just a few days. Its rooms include kitchenettes that let guests cook at home. Analysts rate shares at Buy, but that could change at any time. The lockdown caused by coronavirus is hammering the hotel industry. That includes STAY, which is off 27% year-to-date. Facebook Getty Images Market value: $583.6 billion Billionaire investor: Mark Zuckerberg Percent of portfolio: Unknown* OK, this one might seem like a bit of a cheat. It's not difficult to become the biggest shareholder of the company you founded. But Mark Zuckerberg's enormous stake in Facebook (FB, $204.71) gives him by far and away a dominant position in the social media company, which was too interesting to pass up. Mark Zuckerberg's 400 million shares make him the company's largest shareholder by a mile. The second-largest shareholder is massive asset manager Vanguard with 184 million shares. Zuckerberg - who is worth $75.6 billion thanks to his FB stake - has earmarked the vast majority of his shares to be given to charity. He hasn't been specific, however, and there is every reason to expect Zuck to keep commanding control of the company for a long time. *Although Mark Zuckerberg is legally required to disclose his stake in Facebook by virtue of being a major "insider" shareholder, unlike hedge funds, Zuckerberg is not required to disclose his other holdings or total value of his portfolio. SEE ALSO: 10 Solid Social Distancing Stocks to Buy General Motors Getty Images Market value: $31.9 billion Billionaire investor: David Einhorn (Greenlight Capital) Percent of portfolio: 16.7% Greenlight Capital's billionaire founder and president David Einhorn saw deep value in General Motors' (GM, $22.29) in 2017. Shares were almost laughably cheap, trading at less than 6 times projected earnings. A dividend yield that was usually above 4% only added to the allure, though GM has since suspended its dividend. Einhorn called for some financial engineering that would squeeze more value out of the company, but mostly he liked GM for being GM. The massive and iconic auto manufacturer "is not going to be put out of business," Einhorn liked to say. Einhorn has since lightened his position in GM, but Greenlight retains a large stake. Its 6.2 million shares, worth about $137 million, account for 16.7% of the value of the fund's stock picks. Goldman Sachs Getty Images Market value: $63.1 billion Billionaire investor: Greenhaven Associates Percent of portfolio: 16.9% Goldman Sachs (GS, $183.42) is a favorite stock of Warren Buffett, but he's not the only billionaire who has taken a shine to the names. Greenhaven Associates, an advisory firm with 150 clients and $6.7 billion in AUM, has sunk 16.9% of its fund into Wall Street's biggest investment bank. GS is Greenhaven's second largest investment, and the fund is a top-15 holder of Goldman's stock. The firm owns 3.3 million shares worth about $612 million. Greenhaven holds not not quite 1% of GS shares outstanding. Greenhaven's other big bets include Citigroup, GM and homebuilder Lennar (LEN). Interestingly, Greenhaven's Edgar Wachenheim is the author of Common Stocks and Common Sense, a well-received book describing the fund chief's investing philosophy. For what it's worth, Berkshire also holds 12 million shares in GS. SEE ALSO: 15 Dividend Kings for Decades of Dividend Growth HCA Healthcare Getty Images Market value: $37.2 billion Billionaire investor: Lyrical Asset Management Percent of portfolio: 6.2% First things first: HCA Healthcare (HCA, $109.88), which operates hospitals, emergency care centers and other medical establishments, suspended its dividend on April 21. Lyrical Asset Management's buy-and-hold strategy could be tested with this name. Like many health care stock picks, HCA is suffering from a lack of elective procedures as would-be patients avoid going anywhere as long as the risk of contracting COVID-19 is high. HCA's first-quarter earnings missed Wall Street estimates because of the pandemic. "Patient volumes across most services were significantly impacted in the last two weeks of the quarter as various COVID-19 policies were implemented by federal and state governments," the company said in a press release. In addition to suspending its quarterly payout, HCA also stopped buying back its own shares. Lyrical owns 3.1 million shares worth about $341 million currently. The hedge fund owns 0.9% of HCA's shares outstanding. SEE ALSO: 23 Dividend Cuts and Suspensions Chalked Up to the Coronavirus Herbalife Getty Images Market value: $5.1 billion Billionaire investor: Carl Icahn Percent of portfolio: 6.5% It's Carl Icahn again. This time we're looking at his big stake in Herbalife (HLF, $37.35), which he initiated as part of a grudge. The billionaire activist investor dedicates 6.5% of his fund's value to the multi-level marketing firm. His 35.2 million shares in HLF are worth about $1.3 billion. Icahn became the nutritional-supplement company's largest shareholder in 2012, at least partly to hurt a rival. Bill Ackman of Pershing Square Capital said HLF was a "fraud" and a "pyramid scheme." He expected to reap billions by shorting the name, expecting federal regulators to shut it down. Icahn has made no secret of his contempt for Ackman. "I've really about had it with this guy," Icahn once said in an interview with CNBC. "He's like the crybaby in the schoolyard." Ackman finally threw in the towel on his HLF short after five years. Icahn remains long and strong. Indeed, it's his third-largest holding. IQVIA Holdings Getty Images Market value: $27.2 billion Billionaire investor: Bain Capital Percent of portfolio: 17.2% IQVIA Holdings (IQV, $142.59) isn't familiar to most investors, but one of its largest shareholders might ring a bell. Bain Capital - the private equity firm founded by current senator and one-time presidential candidate Mitt Romney - is the company's fourth largest shareholder. IQVIA Holdings, formerly known as Quintiles and IMS Health, brings technological solutions to health-care problems. It helps life science, drug-development and even care-provider companies collect and analyze data, then use that data to bring new products to the market. Bain holds 1.4 million shares in IQV worth about $200 million. JPMorgan Chase Getty Images Market value: $291.7 billion Billionaire investor: James Hambro & Partners Percent of portfolio: 7.1% JPMorgan Chase (JPM, $95.76), the nation's largest bank by assets, is naturally a hit with hedge funds, but one name in particular stands out. James Hambro & Partners ($3.5 billion in AUM) is interesting because Hambro is one of Britain's richest citizens. Known as Jamie, Hambro made the British tabloids a few years back when local authorities shot down his $2.5 million plan to connect two of his adjacent houses in London. Hambro holds 399,178 shares in JPM worth about $38 million. The stake accounts for 7.1% of the investment firm's portfolio. SEE ALSO: 7 Bank Stocks That Could Get a Lift From SBA Loans Liberty Broadband Courtesy Mike Kalasnik via Wikimedia Commons Market value: $21.8 billion Billionaire investor: George Soros (Soros Fund Management) Percent of portfolio: 22.5% Liberty Broadband (LBRDK, $122.68) is one of the largest cable-TV suppliers in the U.S., but it's not a familiar name. That's because the company makes its bones by holding a 25% interest in Charter Communications, and 100% of its Skyhook subsidiary. A name that should be familiar to most folks is billionaire George Soros. The Hungarian-born investor is perhaps best known for making $1 billion on a trade by shorting the pound. Less sexy but remunerative nonetheless is Soros Fund Management's stake in Liberty Broadband. With almost 23% sunk into the position, it is Soros' largest equity holding. The fund holds 5.7 million shares, making it the cable company's fifth-largest shareholder. Lowe's Getty Images Market value: $79.1 billion Billionaire investor: Bill Ackman (Pershing Square Capital) Percent of portfolio: 15.2% Lowe's (LOW, $104.75) often plays second fiddle to Home Depot (HD), the nation's largest home improvement chain, but it has plenty to brag about as a long-term holding. Income investors know the power of LOW. The retailer has paid a cash distribution every quarter since going public in 1961, and that dividend has increased annually for 57 years. The stock also has the backing of one of the most recognizable billionaires on Wall Street. Bill Ackman's Pershing Square Capital holds 8.6 million shares, devoting 15.2% of its total value to LOW stock. When Ackman initiated the position in 2018, he called on Lowe's to overhaul its marketing and supply chain to create operational efficiencies. LOW is up 13% since the end of 2018. That trails the S&P 500 by about 3 percentage points. SEE ALSO: How to Invest in Oil Right Now Mastercard Getty Images Market value: $276.4 billion Billionaire investor: Gardner Russo & Gardner Percent of portfolio: 14.6% Mastercard (MA, $274.97), the No. 2 payments processor after Visa (V), has fans in high places. Warren Buffett's Berkshire Hathaway holds 4.9 million shares worth about $1.4 billion. Lesser billionaires have MA among their top stock picks, too. Indeed, few professional stock pickers however, have embraced Mastercard as warmly as Gardner Russo & Gardner ($13 billion in AUM). The money management firm buys into the idea that the relentless growth of digital mobile payments and other cashless transactions gives MA a bright outlook. And well they should. Analysts, who rate shares at Buy, see MA generating average annual earnings growth of 13.6% over the next three to five years, according to S&P Global Market Intelligence. Mastercard is Gardner Russo & Gardner's largest position. The firm owns 6.4 million shares, which is good for 14.6% of its total portfolio value. Micron Technology Getty Images Market value: $53.3 billion Billionaire investor: David Tepper (Appaloosa Management) Percent of portfolio: 11.0% Investors in semiconductor stocks have to accept that boom and bust cycles are just part of the program. Appaloosa Management's ($3.9 billion in AUM) David Tepper - who also owns the NFL's Carolina Panthers and is worth $12 billion - sure seems to be at peace with Micron Technologies (MU, $47.89). Tepper added another 2.1 million shares in the chipmaker during the fourth quarter of 2019. In total, his fund's 8.1 million shares of MU make up 11% of Appaloosa's total holdings. Tepper's stake is worth about $388 million at current prices. Tepper is known as an activist investor, but MU management don't appear to be a target in this case. Appaloosa holds just 0.73% of MU's shares outstanding. SEE ALSO: The 12 Best ETFs to Battle a Bear Market Microsoft Getty Images Market value: $1.35 trillion Billionaire investor: Chris Hohn (TCI Fund Management) Percent of portfolio: 7.5% Microsoft (MSFT, $179.21) is a natural stock pick for pretty much any institutional investor's portfolio. Its Windows operating system still is the most popular in the world, and the company has fully figured out how to drive recurring revenue by selling cloud-based services. Shares in MSFT have been a fantastic bet for a number of years. Over the past three years alone, the stock is up 160% vs. a gain of only 22% for the S&P 500. Microsoft's torrid stock market run has lifted its market cap into rarefied air of more than $1 trillion. One noteworthy top holder is TCI Fund Management, led by Chris Hohn. The London-based fund has $22.6 billion in assets under management. Hohn's net worth is estimated at $5 billion. About 7.5% of the value of TCI's holdings stem from its 10.7 million MSFT shares. At current prices, the fund's stake is worth $1.9 billion. Microsoft's fiscal third-quarter earnings, released April 29, exceeded analysts' forecasts. Microsoft said the global pandemic had a "minimal net impact" on revenue. Mondelez Getty Images Market value: $73.5 billion Billionaire investor: Nelson Peltz (Trian Fund Management) Percent of portfolio: 10.9% Mondelez (MDLZ, $51.44) was born out of the 2012 spinoff of the North American grocery business called Kraft Foods Group. Kraft Foods Group later merged with H.J. Heinz in a 2015 deal backed by 3G Capital and Warren Buffett, to form Kraft Heinz (KHC). Mondelez became a separate publicly traded company focused on snacks like Oreo cookies and Triscuit crackers, but it hasn't always been a sweet deal for investors. MDLZ traded sideways for years before finally getting some upside momentum in 2019. Billionaire CEO Nelson Peltz first took a stake in 2012, aiming to orchestrate a deal with beverage and snack giant PepsiCo (PEP). The deal fizzled, but Peltz held on to his position. As of the end of the fourth quarter of last year, Trian still held 18.8 million shares of Mondelez, making it one of the fund's five top stocks, and nearly 11% of its holdings' value. Morgan Stanley Getty Images Market value: $62.1 billion Billionaire investor: ValueAct Holdings Percent of portfolio: 7.8% Wall Street giant Morgan Stanley (MS, $39.43) often finds itself among the hedge fund crowd's top stock picks. Again, it's an august name with a large market value and ample liquidity for investors who want to buy and sell hefty positions. Another attractive element of MS is its focus on wealth management, which helps smooth out the ups and downs of trading securities. ValueAct, with $9.9 billion in AUM, has a thing for financial sector stocks. In addition to Citigroup and private equity firm KKR (KKR), the hedge fund has a big stake in Morgan Stanley. ValueAct reduced its position by 32%, or 7.3 million shares, in the fourth quarter of 2019. However, it still holds 15 million shares worth nearly $6 million. Procter & Gamble Getty Images Market value: $291.8 billion Billionaire investor: Nelson Peltz (Trian Fund Management) Percent of portfolio: 42.3% While you can find strong>Procter & Gamble (PG, $117.87) among plenty of hedge funds' stock picks, Nelson Peltz has a big bet on P&G. More than 40% of his fund's value comes from the consumer goods giant. Fortunately for Peltz and his investors, the stock is holding up relatively well amid the coronavirus lockdown. Consumer staples companies such as P&G, whose brands include Tide detergent and Crest toothpaste, are known for their defensive characteristics. For the year-to-date, PG stock is off less than 6% vs. a loss of about 10% for the S&P 500. PG also has a track record that equity income investors adore. The Dow component has paid shareholders a dividend since 1890 and has raised its dividend annually for 63 years in a row. In 2018, P&G implemented a number of Peltz's suggestions, including packaging improvements and smarter messaging to consumers. Trian holds 31.2 million shares, which gives it 1.3% of PG's shares outstanding. Revlon Getty Images Market value: $710.0 million Billionaire investor: Ron Perelman (MacAndrews & Forbes) Percent of portfolio: 42.7% Beauty company Revlon (REV, $13.32) is controlled by billionaire investor Ron Perelman through his MacAndrews & Forbes holding company. And it's a sizable stake at that. REV accounts for almost 43% of the value of MacAndrews & Forbes' portfolio. MacAndrews & Forbes is the company's No. 1 shareholder with 81.3% of shares outstanding. Perelman, worth an estimated $7.4 billion, separately owns an 8.9% stake in Revlon. REV is a long-time market laggard. Over the past five years, the stock has lost more than two-thirds of its value. SPDR Gold Shares Getty Images Assets under management: $57.8 billion Billionaire investor: Ray Dalio (Bridgewater Associates) Percent of portfolio: 5.9% This one technically isn't a stock, but it's interesting to know nonetheless. Hedge fund billionaire Ray Dalio, one of the greatest investors of his generation, loves exchange-traded funds. His Bridgewater Associates owns a slew of ETFs, which, ironically, track a market benchmark rather than try to beat that benchmark with skill. Bridgewater's single largest position is in the SPDR S&P 500 ETF (SPY), with 23% of the firm's weight thrown behind the exchange-traded fund. But some investors think that in times like this, a diversified and hedged portfolio might want to invest in gold. Dalio sure thinks that way. The SPDR Gold Shares (GLD, $158.80) accounts for almost 6% of the portfolio's value. And then hedging that trade, Dalio also has large positions in a number of emerging-markets funds. SEE ALSO: 7 Gold ETFs With Low Costs Sysco Getty Images Market value: $28.6 billion Billionaire investor: Nelson Peltz (Trian Fund Management) Percent of portfolio: 21.4% Sysco (SYY, $56.27) is another stalwart dividend payer with a long record of annual increases. The food services and restaurant supply company has raised its payout annually every year for 51 years. SYY's revenue stream is based on a combination of organic growth and mergers and acquisitions. In 2015, however, some investors thought the company was undervalued. In stepped our good friend Nelson Peltz and his Trian Fund Management. Peltz owns 4.7% of SYY's shares outstanding, which is worth about $1.3 billion. That stake accounts for more than 21% of the value of Trian's holdings. Perhaps thanks to Peltz, Sysco is up 55% since 2015. The S&P 500 gained 41% over the same span. Tesla Getty Images Market value: $144.2 billion Billionaire investor: Baillie Gifford Percent of portfolio: 5.6% It's hard to keep a low profile when you manage more than $100 billion in securities and have more than $200 billion in assets under management. And that goes double for a firm that's been around for more than 100 years. Especially one that focuses on tech stocks. Edinburgh-based Baillie Gifford, which is owned by its partners, has managed to do just that. The U.K. may be an ocean and a continent away from Tesla (TSLA, $781.88), but Baillie Gifford knows the electric car maker intimately. The firm holds more than 13.8 million shares of TSLA, which accounts for 5.6% of Baillie Gifford's portfolio. The position makes the firm Tesla's second largest shareholder after founder Elon Musk, holding 7.5% of its shares outstanding. Tyson Foods Getty Images Market value: $22.7 billion Billionaire investor: Highline Capital Percent of portfolio: 7.5% Shares in Tyson Foods (TSN, $62.19) have been on a tear since mid-March. Shares in the country's largest meat company have gained about 40% since March 18, vs. a jump of 21% for the S&P 500. That's good news for Highline Capital ($2.9 billion in AUM). The New York-based hedge fund has more than 7% of its portfolio socked away in TSN. Tyson recently warned that COVID-19 outbreak is threatening the country's food-supply chain. Although President Donald Trump signed an order that used the power of the Defense Production Act to keep the meat companies open, it's unclear what that means for business - or for companies' legal liability when their employees get sick. Tyson's 523,135 shares are worth more than $32 million at current prices. Vanguard FTSE Emerging Markets ETF Getty Images Net assets: $52.4 billion Billionaire investor: Ray Dalio (Bridgewater Associates) Percent of portfolio: 11.2% As mentioned above, hedge fund billionaire Ray Dalio really likes ETFs. Fully 11.2% of Bridgewater's fund value comes from Vanguard FTSE Emerging Markets ETF (VWO, $36.17). Dalio holds 24.8 million shares of the ETF, which are worth about $897 million at current prices. The size of the stake might have you conclude that Dalio really loves emerging markets, but not so fast. He slashed his stake by 12.6 million shares, or 34%, during the quarter ended December 2019. Emerging markets are having a rough time of it now that the global economy is in a medically induced coma. VWO is down 19% so far this year, almost double the loss for the S&P 500. ViacomCBS Getty Images Market value: $10.6 billion Billionaire investor: John Paulson (Paulson & Co.) Percent of portfolio: 5.4% John Paulson gained his fame during the 2007-09 financial crisis when he made billions by using credit default swaps to bet against the subprime mortgage market. By that measure, a 5.4% stake in media giant ViacomCBS (VIAC, $17.26) is a pretty dull stock pick. Hedge fund Paulson & Co. holds 6 million shares of Viacom Class B stock. That gives Paulson ownership of almost 1% of VIAC's shares outstanding. The cable, TV and film company's stock has been in a downtrend for three years, hurt by the competition beefing up to compete in streaming media services. To that end, Viacom re-merged with broadcaster CBS for $30 billion in 2019. The move came almost 15 years after Viacom spun off CBS because broadcast was thought to be a drag on growth. VIAC Visa Getty Images Market value: $384 billion Billionaire investor: DSM Capital Partners Percent of portfolio: 6.1% It's not difficult to find prominent billionaires who extol the virtues of Visa (V, $178.72). The payments processor and Dow Jones Industrial Average component has no less a fan than Warren Buffett. Berkshire Hathaway holds 10.6 million shares. DSM Capital Partners co-managing partners Stephen Memishian and Daniel Strickberger aren't in Buffett's league, but the money management duo clearly know enough to attract and retain clients - and suss out good stock picks. The Florida-based firm has $7.8 billion in AUM. More than 6% of the value of DSM's portfolio stems from Visa, which still has a bright long-term outlook despite what the pandemic lockdown is doing to travel and shopping in the present. As the world's largest payments processor, Visa is uniquely positioned to take advantage of the explosive global growth in digital mobile payments and other cashless transactions. Waste Management Getty Images Market value: $42.4 billion Billionaire investor: Bill Gates (Bill & Melinda Gates Foundation Trust) Percent of portfolio: 9.9% Garbage hauling doesn't have the cache of investing in technology shares and other hot stocks, but there's a good bull case to be made. It's a critical societal function that will never lack for demand. Furthermore, waste disposal and recycling in the age of climate change are rapidly becoming existential challenges. Waste Management (WM, $100.02) is a stock pick that's a world away from Microsoft, but Bill Gates knows that it serves a function that's just as important. That's why nearly 10% of the Bill & Melinda Gates Foundation Trust is invested in the Houston-based company. Through the trust, Gates is the company's fourth-largest shareholder with 4.4% of WM's shares outstanding. Analysts on average rate the stock at Buy, according to S&P Global Market Intelligence. They expect WM to deliver average annual growth of 7.9% a year for the next three to five years. Wells Fargo Getty Images Market value: $118.8 billion Billionaire investor: Warren Buffett (Berkshire Hathaway) Percent of portfolio: 7.2% Wells Fargo (WFC, $29.05), the nation's third-largest bank by assets, has put Warren Buffett's desire to hold a stock "forever" to the test. WFC has been something of a problem child since 2016, when numerous scandals bubbled to the surface. The bank opened millions of phony accounts, modified mortgages without authorization and charged customers for auto insurance they did not need. The clean-up process has been slow and claimed not one but two CEOs. Buffett's conviction hasn't much changed regarding this stock pick. True, he has pared his stake over the years, but BRK.B still remains Wells Fargo's top shareholder. The holding company's 323.2 million shares equates to 8.8% of all shares outstanding. WFC stock has been a ghastly investment in 2020. Shares are down by almost half year-to-date vs. a decline of 10% for the S&P 500. SEE ALSO: The Best Online Brokers EDITOR'S PICKS Copyright 2020 The Kiplinger Washington Editors

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By Stephen Foley It was doing the maths on Warren Buffett that made Todd Morley believe traditional private equity funds and hedge funds might be in trouble. Mr Morley, the well-connected co-founder of investment group Guggenheim Partners, has been building up his new venture, G2 Investment Group, in recent months with partnership deals in Californian real estate and Canadian oil and gas — based on the theory that sophisticated investors want direct ownership stakes in these assets rather than pooling their money in high-fee funds. On the heels of a tie-up with the Los Angeles property developer Nelson Rising, G2 has begun investing with Canadian oil and gas financier Rick Grafton to take advantage of what they say are wildly underpriced energy assets north of the border, Mr Morley told the Financial Times. The aim is to offer outside investors direct access to "assets of basic human need", such as energy and shelter, through equity in holding companies, without a fund manager taking the traditional 2 per cent annual fee and 20 per cent cut of investment gains. Sitting in G2's Manhattan office, between a white board of scribbled notes and a screen showing a PowerPoint presentation of the company's investment thesis, Mr Morley cites a 2008 article by economist and Financial Times columnist John Kay, which reimagined Mr Buffett as a traditional hedge fund manager and Berkshire Hathaway as his hedge fund. The extraordinary mathematical conclusion was that, siphoning off "2+20" fees and investing them in the same underlying assets as Berkshire — compounded over a 42-year career — would have yielded Mr Buffett the investment manager a $57bn fortune. By contrast, the Berkshire fund, reduced each year by the fees and therefore compounding at a much lower rate, would have grown to a meagre $5bn. This vast gap between managers, known in private equity funds as general partners, and investors, known as limited partners, is why some sophisticated investors, such as endowments and pension funds, have become less keen on traditional funds, and private equity and hedge fund groups are increasingly offering bespoke co-investments for large clients. "You don't see many billionaires who became billionaires by being LPs — but plenty who did by becoming GPs," Mr Morley said. "Private equity and hedge funds are a leaky sieve, and what has happened since the financial crisis is a huge pushback from big and smart investors against funds and against blind pools." Mr Morley, a former mortgage trader, co-founded Guggenheim Partners in 1999 by persuading the wealthy Guggenheim dynasty to transform their family investment office and manage outside money. The company now boasts $210bn under management. After leaving Guggenheim to found G2 in 2009, he engineered a tie-up with the Forbes family to put their name on a placement agent for private equity funds, although G2 is in the final stages of selling that venture to its management. "Todd's contacts are on more of a global basis than those traditional Canadian resource companies have gone after," said Mr Grafton, a former vice-chairman of Canaccord Capital and founder of Grafton Asset Management. Traditional oil and gas fundraising in Canada involves tapping domestic investors plus "stopping in for a day or two in New York", Mr Grafton said, but much greater investment will be needed if Canada is to tap oil sands reserves in the west of the country and reorientate transport infrastructure towards new markets in Asia. Last year, Grafton and G2 funded a joint venture with Calgary-based Bellatrix Exploration to fund new drilling in western Canada. "Houston and Calgary are the two most important academic centres for oil and gas, but Canada does not have the capital markets sophistication that the US has," Mr Morley said. "There is no such thing as mezzanine debt for Canadian oil, so when the equity market goes illiquid, as it did in 2011, you can have hard assets trading a big discount." Attracting the investment Canada needs, however, will require giving sophisticated capital, such as Middle Eastern sovereign wealth funds, investment structures that are more Buffett-like, Mr Morley said. "They are asking, 'Why should I put millions in a fund and pay two and 20 when I have got better deal-flow in my own country?'"

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The regular releases of the S&P Index-Vs.-Active report card "SPIVA" show that over longer time periods, there are only 10-20% of mutual funds that can beat the index. The ones that just did, rarely do it again. Wall Street Pro may look brilliant on the first few sights. But after digging deeper, you may soon conclude doubts regarding their values in aggregate in terms of generating investment returns for Main Street. Actually, individual investors on Main Street have unique but often neglected competitive edges compared to Wall Street, offering themselves high chances of beating the Pro for the long run. Below, I summarize the main reasons why the pros can rarely beat the market average but some individuals should have a high chance of doing so (along with the recommended portfolio strategies). This is probably the most obvious factor. The actively-managed mutual fund charges 1% on average in the US, while the number could be higher overseas. You might think that 1% seems negligible, but just do the math in Excel and the long-term impact should surprise you. Assume below the initial investment of $100 at Year 0 with 10% annual return and consider the two scenarios of 1% annual fee and no fee at all: As is shown, this investor, after 35 years of investing career, would contribute 30% of the total assets that could have been accumulated under the no-fee scenario to fatten the pocket of fund managers. This is not the worst case yet - think about GPs (i.e., fund managers) of those hedge funds or private equity funds, which normally get paid 2/20 (i.e., 2% annual management fee plus 20% of the investment returns) from their LPs (i.e., high-net-worth individuals or institutional clients). Here is Terry Smith's (founder of Fundsmith Equity Fund, the consistently top performer among equity funds) favorite example: what if Berkshire Hathaway (BRK.A) (BRK.B) is a hedge fund or private equity fund charging 2% annual fee and 20% performance fee and Warren Buffett is the GP of the fund. As described below, between 1965 and 2013, the majority of the returns (90%) would have gone to Warren Buffett's own pocket, leaving only 10% on the table for his hypothetical LPs. Leveraging his fantastic capital allocation skills, Warren does have outperformed the market for shareholders but would have no chance at all with such a typical free structure. Actually, the Oracle of Omaha is the long-time proponent of low-cost index funds in light of most investors. This advice is echoed by his famous 1 million dollar bet that an S&P 500 index fund would outperform a collection of hedge funds after fees over the course of 10 years (see the result below). Without being charged the fee, individual investors would significantly lift their levels of returns in the long term. The below table shows that, with an initial investment of $100, a hedge fund manager charging the typical 2/20 fees would need an additional 5% return annual in order to barely approximately match the hypothetical 10% annual return by a passively-managed fund charging 0.1% (although many index funds nowadays even charge zero - check out some of the products offered by Fidelity). To beat the Pro, one approach for individual investors is simply to keep their investment costs as low as possible. This could mean trading less actively, never paying performance fees, finding low-cost index funds, and/or avoiding expensive brokerages. Most institutional investors suffer from the so-called "size disadvantage" - they would have to deploy a sizeable amount of capital of the funds to move the needle, which usually limits their investment choices to large-cap stocks only. Even within that large-cap stock scope, additional restrictions may apply in terms of ownership percentage. For instance, no matter how Warren Buffett loves banks, Berkshire Hathaway may want to keep their holdings in any US bank under 10% in order to avoid being a bank holding company subjective to more regulations. All the above would not be an issue for individual investors with much smaller money bases, providing their strategies with the advantages of greater flexibilities as well as a larger pool of investment choices to beat the Pro at the disadvantages. To beat the Pro, individual investors are suggested to focus more on smaller-cap stocks. You may find that plenty of small- and mid-sized businesses, such as Credit Acceptance (CACC), NIC (EGOV), OTC Markets Group (OTCQX:OTCM), meet the investment criteria (e.g., superior ROIC, high margins, strong cash flow, clean balance sheet) of guru investors but have been underrated on Wall Street. Unlike individual investors managing money under their ownership, professional fund managers usually deal with clients' money which they do not fully control. This means that panic investors would pull out money at market lows and greedy investors would add in money at market peaks, which would negatively impact fund managers' performances. To beat the Pro, individual investors should avoid emotions influenced by Mr. Market. The market is there to serve investors not to instruct them. They are also advised to set up additional funding for rainy days so as to be able to stay fully invested or even add money during recessions. Many fund managers tend to chase hot stocks. Remember the internet era in the late '90s when you would look "stupid" without any position in the tech sector. Wall Street professionals face pressures from peers, media, and clients, which often override their independent thinking. This behavioral bias due to fear of missing out may cultivate bubbles, causing unjustified high pricings and lower-than-average returns. To beat the Pro, individual investors need to stay objective in terms of investment decisions, avoid herd mentality, focus on the long term, and dare to go against the prevailing mindset if necessary. They may also want to get cautious about hot jargons like FAANG, BRIC. Wall Street professionals are expected to beat the market. But what is the timeframe for them? Unfortunately, it would be year-by-year at most and sometimes quarter-by-quarter or even month-by-month. For example, most fund ranking sites, like Morningstar (MORN), evaluate fund managers' performances on a monthly basis. Additionally, the performance fee is usually calculated annually per the industry standard. Therefore, institutional investors are naturally forced to think short term, often taking unnecessary risks to their portfolios. To beat the Pro, individual investors should leverage their naturally-born competitive advantage of being able to trade short-term volatilities for long-term gains. They may also want to allow performances of their portfolios to significantly deviate from underlying benchmarks, which will be discussed in the next section. There are studies indicating that professional money managers in general invest in more stocks than necessary for their funds. Part of the reason here is that fund managers are afraid of deviating their portfolio performances too far away from the major indices to avoid embarrassment. This phenomenon, on the one hand, leads to diversification, which lowers so-called unsystematic risks, but on the other hand, reduces the chance for the overall portfolio to outperform the market average. If such diversification (to minimize unsystematic risks) is still what investors need, why not consider a passively-managed fund? To beat the Pro, individual investors are recommended to build their portfolios as concentratedly as possible. As Warren Buffett once said: I would build a portfolio of 15-20 high-quality businesses and wait patiently to accumulate more of their shares over time. Stock investing is not for everyone. But if you have the emotional capabilities of staying objective, focusing on the long run, not panicking for the short term, and being patient, why not grab your chance of beating the Wall Street Pro? In case you do not, just follow this simple approach - invest in low-cost index funds, sit back and relax. I am sure that you would beat the very majority of professional fund managers over time by almost doing nothing! Disclosure: I am/we are long MOST OF THE STOCKS MENTIONED. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Jack Bogle was known as the "Father of Passive Investing", but upon his death in 2019, he lamented his creation, as it later swung deeply into ETF territory. In fact, his disdain for ETFs was such that he even referred to the folks who traded them as "fruitcakes, nut cases and lunatic fringe." Tell us how you really feel, Jack! The road to hell is paved with good intentions When Bogle created index funds in 1975, he aspired to offer retail investors a cheaper option to get off the sidelines to join the pros in the game. His pioneering model was designed to lower transaction fees and eschew trying to beat the market, by effectively buying the market in order to earn what it makes. Most of us know this buy-and-hold strategy as advice Warren Buffett has been preaching about index funds for decades. However, this strategy results in minimal trading in the market, which has had a long tail effect on the economy and innovation. Collision course Like a cord yanked from the wall socket, the data below abruptly ends in 2018. But to the surprise of probably no one looking at this graph, 2019 was the year when passive finally surpassed active funds in the market. According to Morning Star, the end of 2020 even witnessed investors yank more than $250 billion out of active US equity funds. Aaand much to Bogle's chagrin, ETFs make up nearly 50% of the passive market. When you own Boardwalk and Park Place When we talk about passive investing, it's impossible to ignore the gargantuan index funds. For context, 90% of companies on the S&P 500 can usually point to one of the Big Three — Vanguard, BlackRock, and State Street — as their single largest shareholder, and these three control 80–90% of the market. In fact, it's even been argued by a Harvard Law professor that we're on trajectory for a dozen individuals to wield "practical power" over the lion's share of publicly traded companies in America. Talk about hyperconcentrated control. At the wheel, on autopilot With such a large portion of investors just buying and hanging on — as is the nature of index funds — I've got to say, this means that either a large part of the market behaves rather lazily or an even larger portion of the possible market hasn't joined the party yet. The trillions of dollars in this monolith seems to be overwhelmingly decided by complicated algorithms anyways. So there aren't even hamsters on wheels behind the scenes anymore, buying and selling winners and losers based on daily market information or human emotion. That's the whole point of a capitalist market though: new players set up shop, new ideas hit shelves and the market reacts accordingly — based on fact or even their own fiction. Juxtapose laissez-faire index funds against the world of plucky startups (99.7% of small businesses in America) and crowdfunding. This ecosystem is where radical innovation takes place, as these businesses are in constant motion and always innovating, trying to survive and thrive. They're more nimble and dialed in. Yet (ironically) they have much less capital and potential to move markets. However, here is the good news. Where we all bore witness to the social collusion inspired by GameStop, it was so elegantly proven that by banding together, even the 'lowly low' 99% could force stock movement and change the fortunes of the snobs who snub their noses at us. And while it is true that the cost will be a shit ton of Federal ire, they don't seem to give a shit about the 99% anyway.. and we've all been pissed for a long time. Decrease the incentive to compete From the perspective of the businesses outside the hyperconcentrated monoliths, it takes the wind out of your sails to create something spectacular and know that it can't really have much effect on the market. With such a tremendous amount of money parked for the long haul, and impervious to real life market data, there really wouldn't be much that could derail the trajectory of these funds. What lasting incentive is there to compete now and into the future? In 2016, a Bernstein investment strategist declared passive investing to be "worse than Marxism" given its inefficient nature. Capitalism is predicated upon competition in a free functioning market, and passive investments seemingly make this a much tougher argument. Society and business don't benefit from stagnant money squirreled away because it doesn't innovate or work for the larger public. Index funds are to investors what the default option is to consumers — the easiest option is nothing. Here we are again However, the stakes are much higher when trillions of investment dollars do less and end up making more for a small faction of society — it always seems to come to this. This commitment to inertia drags all participants down and limits overall market movement. After decades of passive investing, it seems that we may have underestimated the role those little hamsters have in keeping the market functioning efficiently for everyone. As we can see in the adjacent financial markets, money pumped in has a profound effect on communities, businesses and the entire ecosystem. Let's just see if the rest of the world catches on.

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