On this week’s episode of Tape Talk, Quint and Daniel discuss an edge that “professional” or large investors have in investing markets as well as some ways the individual investor might benefit.
One of the major stories making headlines this week was Warren Buffett’s backing of Occidental Petroleum in its attempt to acquire Anadarko Petroleum after the company announced plans to be acquired by rival Chevron. An article by Bloomberg illustrates the benefits a large and well-connected investor such as Warren Buffett has in ensuring that potential opportunities literally come calling.
Big Investor’s Moves Aren’t Secret
Even though large investors get the first mover advantage in many circumstances, their moves and investments are hardly shrouded in secrecy. In fact, as Quint and Daniel discuss, many of these investment managers are obligated to report their investments and changes on a quarterly basis. While this data is delayed, it does give investors insight into what some of the large money managers on Wall Street are putting their money behind.
Look For Opportunity, Carefully
While investors can get a peek into what money managers are doing, investors would be wise to develop their own thesis rather than blindly following. The reason is simple, reading a buy and sell report hardly tells you the whole thesis and strategy a money manager may be following. However, as Quint points out, there are times when you may be able to assess an investment made by a money manager and ultimately enter that position at a better price or value than the large manager. Patience and a watchful eye are critical in these circumstances!