This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Most-Popular Stocks for Billionaires

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( Insider Monkey) -- If you've been reading articles about hedge fund performance over the past three years, you're probably thinking index funds are better options for investors. During the last quarter, an average hedge fund underperformed S&P 500 index ETFs by around 8 percentage points.

This is a bit misleading though. Actually, equity hedge funds hedge around 50% of their exposure. It isn't really appropriate to compare hedge fund returns to broad market indices that are 100% long at all times.

Hedge funds have been able to outperform the market significantly over the past five years. Unfortunately, hedge fund managers took around 47% of their total returns as fees (read the details here). Despite the huge hedge fund fees, investors were still able to outperform the market by 2.5 percentage points per year.

Follow TheStreet on Twitter and become a fan on Facebook.

We like hedge funds. We believe hedge fund managers are talented and that they deserve billions of dollars in fees. However, we don't think it's a smart move to directly hand over your hard earned dollars to hedge fund managers. This will only help them to become billionaires before you can even think about retirement.

A better alternative is to imitate billionaire fund managers' top stock picks. Insider Monkey constructed the Billionaire Hedge Fund Index last month and reported that this index was beating the market by 4.4 percentage points through the middle of March. Billionaire Hedge Fund Index continued its spectacular performance over the past three weeks. As of April 9 th the index is up 17% vs. 10.6% for the S&P 500 ETF. Billionaire fund managers' top stock picks beat the market by 6.4 percentage points since the beginning of this year. Here are the top 5 stock picks:

1. Apple (AAPL) is the most popular stock among billionaire fund managers. Almost half of them had a large position in Apple at the end of December. Apple is also the most popular stock among other hedge fund managers (see the 10 most popular stocks). The stock gained 57% this year as of April 9. Apple has been an obvious value play for a very long time. At the beginning of last year the market valued the stock as if it was a low growth utility stock. By the end of the summer, low growth utility stocks had even higher multiples than technology stocks like Apple and Microsoft (MSFT). Investing in Apple was really a no brainer. It is still very attractively priced. Billionaires Ken Griffin, David Einhorn, and Stephen Mandel are extremely bullish about the stock.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%
YHOO $36.60 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs