The hedge fund an the people who run them have been one of those phenomena that seems to capture the imagination.
Hedge funds been called “Masters of the Universe,” and fictionalized in books such as The Bonfire of the Vanities and chronicled in movies such as Wall Street.
We’re talking about hedge fund managers. The so called “smart money.” The people who can move markets with outsized trades and well-timed tweets. The role of hedge funds, and the people who manage them, seems to only be growing in influence.
Collectively, hedge funds around the world today manage $4.5 trillion of assets, with eight of the 10 largest hedge funds based in the U.S. Given the amount of money managed by hedge funds and their success rate, it is not surprising that many hedge fund managers have developed loyal followings.
Some hedge fund managers have hundreds of thousands of followers on social media hoping to learn how to earn similar returns on their capital. Here are three of the most influential hedge fund managers you need to follow.
Ray Dalio
While he no longer runs the daily operations of Bridgewater Associates, Ray Dalio remains on the board of the world’s biggest hedge fund with more than $125 billion of assets under management.
Dalio is a thoughtful and opinionated money manager who writes frequently on investing, economics and politics.
You can see much of Dalio’s writings through Bridgewater’s regular newsletter, which investors can sign up for free on the hedge fund’s website. However, Dalio is also on social media and he writes books.
Dalio’s most recent book,m 2021’s The Changing World Order: Why Nations Succeed and Fail looks at the rise of China’s economy and influence in the world.
Dalio has also appeared on Time magazine’s list of the 100 most influential people in the world, and Bloomberg’s list of the 50 most influential people. Under his leadership, Bridgewater Associates averaged an annual return of 11.5% over the last 25 years, beating the benchmark S&P 500 index nearly that entire time.
Michael Burry
Few hedge fund managers are as closely followed as Michael Burry. A trained medical doctor who today runs Scion Asset Management, Burry earned his reputation by spotting and then shorting the subprime mortgage meltdown that led to the 2008 financial crisis.
By some estimates, Burry earned $700 million for his hedge fund clients and $100 million for himself by shorting the U.S. housing market as chronicled in the book and movie The Big Short. Christian Bale played Burry in the film.
Today, Burry continues to run the Scion Asset Management hedge fund and frequently takes to Twitter to comment on the state of the stock market and U.S. economy.
A notorious bear, Burry’s comments are typically negative and discouraging. However, he is frequently right in his assessments, such as when he predicted the stock of Tesla (NASDAQ:TSLA) would decline sharply last fall or that the entire market was due for a correction in late 2021.
Some people mock Burry’s pessimism, with Elon Musk referring to him as a “broken clock.”
Investors wanting to follow Burry should keep in mind that the hedge fund manager is mercurial. He frequently deletes his tweets shortly after posting them. Scion’s website contains no information other than a generic email address, and Burry does not follow the herd with his investments.
Currently, he is invested mostly in Chinese technology firms and private companies that run U.S. prisons.
Warren Buffett
He’s not a hedge fund manager per se, but Warren Buffett is arguably the most successful investor of all time.
He runs an enormous investment portfolio through his holding company Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) that is today worth nearly $350 billion. The financial press watches his every investment, and he’s frequently copied by investors.
CNBC runs a detailed and updated Berkshire Hathaway portfolio tracker where investors can see Buffett’s investments and how they are performing.
While Buffett, age 92, is not on social media, he regularly gives interviews where he expounds on his buy and hold investing philosophy and comments on the market and economy.
He also writes an annual letter to shareholders that is carefully parsed for meaning, and speaks each year to the tens of thousands of shareholders that attend the Berkshire Hathaway annual meeting in Omaha, Nebraska.
Buffett earned such a rabid following by consistently beating the S&P 500 index.
Between 1965 and 2022, Berkshire Hathaway’s stock portfolio earned a 19.8% compound annual gain compared to 9.9% gain for the S&P 500 Index during the same time period.
Last year, when the S&P 500 declined 18%, Berkshire Hathaway’s portfolio earned 3.3% for investors.
On the date of publication, Joel Baglole 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.
