A Voyeur's Guide to Investing
George Soros
can run, but he can't hide.
When the esteemed hedge fund manager bought a big piece of biotech firm
ViroPharma
(VPHM)
this past May, I was there. When he moved in on Internet retailer
Bluefly
(BFLY) - Get Butterfly Network Inc. Class A Report
in August, I knew about it within hours.
How? Piece of cake. I just logged onto one of the new generation of
EDGAR
sites (see my July 16
column for more on these sites), which tell you what the heavy hitters are swinging at.
Here's how it works: When somebody like Soros buys more than 5% of a company's stock, he has to file form 13-D with the
Securities and Exchange Commission
. A mutual fund making a big purchase is required to file a 13-G, while company insiders who sell stock file a 144. People who own big stakes in public companies file forms 3 and 4.
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This stuff has been available in raw (i.e., unintelligible) form for years. But with the search engines developed by
Edgar Online and
10-K Wizard it's now possible to type in some names and call up every mention of those persons in any filing in the past year. You can find out which boards they serve on, how much they're paid, how much stock they own, and of course, what they're buying and selling. The services will even email you automatically when the object of your interest appears in a filing.
Think about what this means: Soros' 80-hour-a-week analysts X-ray a company's finances, grill its CEO and quiz its suppliers and competitors. They convince the boss that they've found a diamond in the rough, and he buys in big. Then he files a 13-D or 13-G, and we get the benefit of all their hard work virtually for free, just by typing in "George Soros," or reading our email.
But hey, why stop with one legend? Let's see what some other big names are up to:
Warren Buffett
? Hmm, not much, really. Guess he's serious about the long-term buy-and-hold thing. But ex-junk bond king
Mike Milken
is back in the flow, creating a full-service education company under the
Knowledge Universe
umbrella. Most of the pieces are still private, but he does own chunks of consulting firm
Nextera
(NXRA)
and school operator
Nobel Learning Communities
(NLCI)
.
Bill Gates
, like Milken, is doing most of his empire building via private companies. But he's been nibbling at biotech firms
Corixa
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and
ICOS
undefined
.
For real action, check out
Microsoft's
(MSFT) - Get Microsoft Corporation Report
other co-founder,
Paul Allen
. Through his
Vulcan Ventures
, he's been converting his Windows monopoly into stakes in
VaxGen
(VXGN)
, a biotech company working on an AIDS vaccine;
High Speed Access
(HSAC) - Get Health Sciences Acquisitions Corporation Report
, a provider of (how clever) high-speed Internet access;
Onsale
undefined
, an electronic retailer;
Globalnet Financial
(GLBN)
, an online financial services firm; and
Metricom
undefined
, a wireless networking company.
Then there are the mutual funds.
(FMAGX) - Get Fidelity Magellan Report
Fidelity Magellan is closed to new investors, but it recently filed 13-Gs for
Extended Stay America
(ESA)
and
Polo Ralph Lauren
(RL) - Get Ralph Lauren Corporation Report
. The always-hot
Janus
fund family has filed 41 13-Gs in the past year, most recently for
Amazon.com
(AMZN) - Get Amazon.com Inc. Report
,
PSINet
(PSIX)
(preferred stock),
SDL
undefined
and
Paychex
(PAYX) - Get Paychex Inc. Report
.
A few thoughts on building a portfolio this way:
Don't expect perfection from these search engines. They often seem to miss a lot (such as when 10-K Wizard found only three proxies for Buffett). Searches involving forms 3, 4, and 144 sometimes turn up nothing at all, which can't be right. So the names and numbers cited above may not be 100% accurate. I'm just telling you what I found.
Make your searches as precise as possible. If you take the lazy approach and type in "Buffett," you'll get, among other things,
Harvey Enterprises
, partially owned by singer
Jimmy Buffett
, not Warren. There are lots of other Soroses out there, and half the companies in the world seem to have a Gates in either their management or their outside law and accounting firms.
So get your target's complete name, down to the middle initial. Then specify the forms most likely to yield good information.
10-K Wizard is free and relatively straightforward. Edgar Online is a little more complex, and can cost between $10 and $100 a month, depending on your needs. But it offers free technical support, which you'll definitely use.
Don't assume that the stocks mentioned here are sure things. Even the giants strike out once in a while. Buffett, for instance, has stuck with his massive
Coca-Cola
(KO) - Get Coca-Cola Company (The) Report
position as it's gone from world-class growth stock to high-profile dog. And Soros and
Tiger
are having forgettable years.
Still, a lot of energy and brainpower go into their major decisions. So being able to effortlessly tag along seems like the ultimate Internet freebie.
John Rubino, a former equity and bond analyst, writes a column on mutual funds for POV and is a frequent contributor to Individual Investor, Your Money and Consumers Digest. His first book, Main Street, Not Wall Street, was published by William Morrow in 1998. At time of publication, he had no position in any stocks mentioned. While Rubino cannot provide investment advice or recommendations, he invites your feedback at
rubinoja@yahoo.com.
