There is no shortage of interest these days in what the biggest investors, mostly hedge funds, are up to. Tracking their moves has become a business unto itself. There are (at least) three caveats that investors need to be aware of when it comes to following a coattail or piggyback investing strategy. The first is that the data we see is, at best, a snapshot of the underlying strategy a manager may be following. Second, a piggyback strategy requires one to identify those managers you want to track. That in and of itself is an active process. Third, a piggyback strategy like any other active investment strategy requires a disciplined approach. Every investment strategy will go through rough times and often times the typical response it to sell into adversity. In short, a piggyback strategy needs to be analyzed and implemented with the same care one would with any active investment strategy. In today’s screencast we look at the boom in data on hedge funds and what investors need to keep in mind.
Items mentioned in the above screencast:
David Tepper’s portfolio moves. (CNBC)
Everybody talks their book. (Abnormal Returns)
Jay goes over 13-F filings with a fine-toothed comb. (Market Folly)
What does it mean to “clone” an investment manager’s strategy? (AlphaClone)
Ten stocks the “ultimate stock-pickers” are buying. (Morningstar)
Fidelity scores with the Caterpillar-Bucyrus deal. (footnoted)