Great investment ideas can be found in many ways, and one place you may want look is the list of stocks owned by Wall Street’s richest people. The most successful hedge fund managers, private equity titans and even the financiers who now only manage their own capital can be a resource as you make new picks for your portfolio.
So, how do you go about buying what the top Wall Street players own? For some of them, you can buy shares in their main publicly-traded investment vehicle. Think Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) for Warren Buffett, Blackstone (NYSE:BX) for Stephen Schwarzman or Icahn Enterprises L.P. (NASDAQ:IEP) for Carl Icahn.
For Wall Street titans without public vehicles, take a look at their 13F filings with the Securities and Exchange Commission (SEC). These reports list all the stocks they hold in their respective portfolios. You can also use 13Fs to see which stocks Buffett holds through Berkshire as well as Icahn’s picks for IEP and his other investment entities.
Sure, “invest with the best” is far from a slam-dunk strategy. Even the “smart money” makes mistakes from time to time. Yet given their track records, chances are you’ll find plenty of potential winners. Here are the ten richest people on Wall Street (based on Forbes’ Real Time Billionaires list) to look to for portfolio inspiration:
- Warren Buffett – Berkshire Hathaway: $101.4 billion
- Stephen Schwarzman – Blackstone: $37.5 billion
- James Simons – Renaissance Technologies: $24.4 billion
- Raymond Dalio – Bridgewater Associates: $20 billion
- Carl Icahn – Icahn Enterprises: $16.3 billion
- Kenneth Griffin – Citadel: $16.1 billion
- Steve Cohen – Point72 Asset Management: $16 billion
- David Tepper – Appaloosa Management: $15.8 billion
- Jeff Yass – Susquehanna International Group: $12 billion
- Israel “Izzy” Englander – Millennium Management: $10.5 billion
Richest People: Warren Buffett (Berkshire Hathaway)
Yes, Warren Buffett doesn’t work on Wall Street. His moniker as the “Oracle of Omaha” all but gives that away. But given that he’s become one of the richest people in the world primarily from stock market investing, it would make no sense to exclude him from this list.
Not only that, but among the richest investors, Buffett is probably the easiest for individuals to invest alongside. You can do this directly by putting some of your portfolio into Berkshire Hathaway stock.
Alternatively, you can also buy the many “Warren Buffett stocks,” or stocks that Berkshire has held in its portfolio for many years. Top names include Apple (NASDAQ:AAPL), Bank of America (NYSE:BAC) and Coca-Cola (NYSE:KO).
The legendary investor’s modified value investment strategy, which focuses on “wonderful businesses at a fair price,” may seem old hat in a meme stock world. His more prudent strategy also resulted in him cashing out of airline stocks near their Covid-19 lows.
But if you’re looking to fill your portfolio with safer stocks that have solid upside potential, adding a few of his favorites could be a winning move in the long term.
Stephen Schwarzman (Blackstone)
Alternative investments like private equity are off-limits to most individual investors. That’s due to accredited investor regulations. Yet there is a way for Main Street to gain exposure to this large alternative segment of Wall Street.
Individual investors can do this by investing in the publicly-traded shares of private equity fund managers. Our Will Ashworth discussed seven that you can ride to riches last month. Among those seven, there’s one that may be of most interest: Blackstone, co-founded and headed up by Stephen Schwarzman.
Among the richest people in the U.S. who made their money via private equity, Schwarzman comes in at number one. Setting up shop in 1985, the firm started to execute private equity deals in the late 1980s.
More than 35 years later, Blackstone has become one of the biggest names in private equity. It’s also expanded into other alternative asset classes as well, such as hedge funds and private real estate investment.
Schwarzman and Blackstone have ridden Wall Street’s Covid-19 recovery wave, with BX stock up 150% over the past 12 months. It’s understandable if you’re hesitant to buy in while it trades near its all-time high. But after the next correction or sell-off, this may be one of the best billionaire stocks to get into at the bottom.
Richest People: James Simons (Renaissance Technologies)
Admittedly, the strategies of quantitative fund managers like James Simons are tough to try at home. His firm, Renaissance Technologies, uses complex computer models to trade financial instruments that are highly liquid.
But while we may not know everything that is in Renaissance’s so-called “black box,” the fund’s 13F filings are readily available online. So, what are the top holdings of James Simons’ Renaissance today?
Again, given the trading-focused nature of the strategy, it’s difficult to buy any of these stocks on their own. For example, until we see the next 13F filing, we don’t know whether Renaissance has added, reduced or even cashed out of any of the aforementioned stocks. SEC filing requirements provide more transparency, but still don’t give the investing public the full picture.
In short, your mileage may vary if you try to invest alongside James Simons and his fund. That said, if you think you can crack the code, taking a look at what Renaissance owns may be a worthwhile endeavor.
Raymond Dalio (Bridgewater Associates)
Raymond Dalio has recently put himself out there as a thought-leader, as seen from his widely-publicized book, Principles: Life and Work. But he’s still Chairman of the world’s largest hedge fund, Bridgewater — the firm that built his $20 billion fortune.
Take a look at his fund’s most recent 13F filing and you’ll see Bridgewater owns many very liquid securities. Top holdings include exchange-traded funds (ETFs) like the SPDR S&P 500 ETF Trust (NYSEARCA:SPY), and the Vanguard FTSE Emerging Markets ETF (NYSEARCA:VWO).
Yet to really invest like Ray Dalio, you need to understand the core of his strategy. Don’t just buy the stocks Bridgewater currently owns. Dalio’s firm puts a lot of a focus on macro trends and uses a strategy built around diversification. Most importantly, Bridgewater operates two portfolios: an All Weather fund with a more conservative strategy, and a Pure Alpha fund that makes risk-adjusted bets in order to deliver above-average returns.
How did Bridgewater fare in 2020? Unfortunately, not so well. It failed to get back into stocks heavily before the market rebounded after the March 2020 “Covid crash.” Dalio’s funds lost $12.1 billion in what was otherwise a banner year for hedge funds. Nevertheless, given his firm’s multi-decade track record, you may still want to see what his firm is buying for some investing inspiration.
Richest People: Carl Icahn (Icahn Enterprises)
Hear the term, “activist investor,” and Carl Icahn is likely one of the first names that come to mind. He’s been employing this strategy since the late 1970s, and built up his fortune during the 1980s as a “corporate raider.”
He continued to thrive through the 1990s, mainly by focusing on distressed debt investing. However, at the start of the new millennium, he took advantage of the exploding popularity of hedge funds. He raised billions to put to work in activist investing campaigns that by the early 2000s had come back into vogue.
In 2011, he got out of the hedge fund game. But as a lone wolf, he continued to pursue his passion: buying up stakes in undervalued companies and pushing aggressively for changes to boost their valuations.
Icahn’s had many winners in the past decade, including Apple, Herbalife (NYSE:HLF) and most recently, Cloudera (NYSE:CLDR). But he’s had many blunders too, like Hertz Global (OTCMKTS:HTZZ). Icahn also cashed out of Netflix (NASDAQ:NFLX) too early, realizing $2 billion in profits when he could have held on and seen $19 billion instead.
Like Buffett, another “old school” investor, his fundamentals-based approach is currently out of favor. But if you believe this strategy will make a comeback once today’s bull market runs its course, you may want to consider some of his top holdings. Some examples include Occidental Petroleum (NYSE:OXY) and Newell Brands (NASDAQ:NWL).
As mentioned above, you can also invest alongside him via Icahn Enterprises. The master limited partnership (MLP) owns several operating businesses and has $4.7 billion invested in Icahn’s stock market dealings.
Kenneth Griffin (Citadel)
Kenneth Griffin and his firm, Citadel, have gained some notoriety in 2021. And unfortunately, it’s not tied to the performance of this hedge fund. Instead, the attention came from the cameo role Griffin and Citadel played in the GameStop (NYSE:GME) short squeeze saga.
As you may recall, Citadel bailed out Melvin Capital, the fund that took the wrong side of the GME stock trade. Because of this, the Reddit trading community began promoting the conspiracy theory that Griffin and Citadel were behind trading restrictions put in place by Robinhood (NASDAQ:HOOD) during the February meme stock wave.
Instead of focusing on this, however, let’s take a look at the hedge funds that made him his fortune and which stocks his funds currently hold.
Again, like Dalio and Simons, Citadel’s investment approach is hard to pull off as an individual investor. As seen in its most recent 13F, many of his fund’s positions involve the use of sophisticated options strategies.
However, even if you don’t emulate his strategy completely, buying some of his top holdings could still be a solid move. Many of these top positions are fantastic stocks for newbie and seasoned investors alike, including Amazon (NASDAQ:AMZN), Facebook (NASDAQ:FB) and AT&T (NYSE:T).
Richest People: Steve Cohen (Point72 Asset Management)
Steve Cohen built a $16 billion fortune in the hedge fund game, albeit not without controversy. You may remember his run-ins with the SEC in the 2010s due to accusations that his firm, then known as S.A.C. Capital Advisors, engaged in insider trading.
But Cohen paid his fines, changed S.A.C.’s name to Point72 and for a time did not manage outside money. That didn’t last long, as the fund re-opened to outside investors in 2018.
Now that it’s back in the game, how has this hedge fund legend fared lately? 2020 was a solid year, with Point72 delivering 16% returns. But in 2021, that hasn’t been the case given its exposure to Melvin Capital.
Fortunately for regular investors, you don’t have to worry about minefields like Melvin Capital. Instead, you can invest like Steve Cohen just by buying the top publicly-traded names in his portfolio.
You can check out the many top holdings of Point72 in its most recent 13F filing with the SEC. Some names of note include Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), Visa (NYSE:V) and Western Digital (NASDAQ:WDC).
David Tepper (Appaloosa Management)
Hedge fund billionaire David Tepper began his journey to becoming one of the richest people on Wall Street through distressed debt investing. This made him and his firm tremendous profits following both the 1987 stock market crash and the burst of the dotcom bubble.
In the decades since, though, Tepper’s Appaloosa Management has focused more on stock market investments. Like other investors discussed above, Appaloosa has also closed itself off from outside investors, transforming into a family office.
But thanks to its large size, the firm still has to file 13F reports with the SEC. From there, we can get an idea of what Tepper’s buying, holding and selling right now.
Per his filing for the June quarter, Appaloosa holds positions in FAANG stocks popular with Main Street and Wall Street alike. However, his fund also holds positions in names that, while popular, aren’t the most widely held stocks out there. These include Micron (NASDAQ:MU), Paysafe Limited (NYSE:PSFE) and T-Mobile (NASDAQ:TMUS).
A key takeaway from the firm’s latest filing is that Tepper has pared many of his top positions. For example, he cut his top holding, Micron, by 22.3%. For his FAANG holdings, he pared these down by about 35%, plus or minus a few percentage points. This could be a sign that Tepper is taking some risk off the table before tech stocks start to move in the wrong direction.
Richest People: Jeff Yass (Susquehanna International Group)
A former professional gambler, Jeff Yass traded the poker room and the racetrack for the trading desk. With backing from Israel Englander, Yass made millions trading options on the Philadelphia Stock Exchange. He then used that money to turn Susquehanna into a multi-billion-dollar proprietary trading powerhouse.
Susquehanna has also made a mint from some venture capital investments. Most notably, it got into TikTok parent ByteDance early, turning a small investment into billions. But enough about the story behind how Yass made his $12 billion fortune. Let’s dive into his firm’s portfolio and see what it’s holding now.
Yet again, reading Susquehanna’s 13Fs for investing ideas may be difficult. it’s more of a trading firm than an investment fund, so many of its holdings, like Citadel, involve sophisticated options strategies. For example, the firm owns calls and puts on several high profile stocks, including Amazon and Tesla (NASDAQ:TSLA).
It may be tough to directly emulate Jeff Yass. But you could take to heart one key factor that helped him become one of the top ten richest people on Wall Street. However, his unique odds-based approach can be transferred over to trading options and stocks.
Israel “Izzy” Englander (Millennium Management)
Some hedge fund billionaires made their fortune focusing on one strategy. But Israel “Izzy” Englander earned his spot on this list of the richest people on Wall Street by putting money to work a different way. He employed a multi-manager, multi-strategy approach.
By investing more in his winning traders and cutting his losses with those who didn’t succeed, Englander has turned a firm with starting capital of $35 million into a firm with $50 billion under management.
So, given his use of many managers who employ different strategies, is it easy to invest like Izzy Englander? Not exactly. Just like the other managers listed above, however, you can take a look at his firm’s top holdings for some new investing ideas.
Millennium Management holds scores of popular stocks, like Alphabet, Amazon, Apple and Facebook. But it also holds many lesser-followed names as top holdings. Some examples include Linde PLC (NYSE:LIN) and PRA Health Sciences Inc. (NASDAQ: PRAH).
On the date of publication, Thomas Niel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.