Legendary Investors Shook the Markets in Q3

The world's top investors once again showed their hand. 13-F reports, which detail what stocks investors managing more than $100 million are buying and selling, came out, and revealed some exciting trends.

While 13-F reports should not serve as a detailed roadmap, they can offer some inspiration and food for thought. But keep in mind that the reports are delayed, and these investors' strategies may differ from yours. But with that in mind, let's dive into what the gurus have been buying and selling lately.

The Big Buffett Surprise

"The Oracle of Omaha" needs no introduction. As a value investor, he seeks out fundamentally strong companies with a competitive advantage that are trading below their intrinsic value. So why did he buy Google?

That's right! Warren Buffett (Trades, Portfolio)'s Berkshire Hathaway took the headlines by storm, after revealing a massive position in guess what. Google! Yes, the famous value investor has taken a $4.3 billion stake in Google parent Alphabet in Q3, making it the 10th largest holding.

Warren Buffett (Trades, Portfolio)'s Top 10 Holdings, source: GuruFocus.com

Buying a tech stock at an ATH? Not very Buffett-like. So what does he see in it? Well, Google is likely to be one of the winners of the AI revolution. Is Buffett getting in on the trade? I'll leave that up to you.

One important reminder is that actually, Buffett doesn't control the portfolio much anymore. It's his disciples, Ted and Todd, that are responsible for it.

However interesting the stake in Google might be, it pales in comparison to the $382 BILLION he is holding in cash. Up from $344 billion last quarter. To raise that capital, he continued selling Apple and Bank of America. It's another record for Berkshire, and along with many other value investors, they probably don't see that many cheap companies on the market.

The value of Berkshire's stock portfolio is $267 billion, but keep in mind that there are certain positions they don't have to report, and that Berkshire's portfolio is the many businesses it operates, not just the stocks.

However, Berkshire now presents an interesting diversification opportunity, with so much cash and many conservative businesses under its hood.

Michael Burry (Trades, Portfolio) Shuts Down His Fund

Really. The bearish investor, known for predicting the 2008 real estate bubble and recession, gave up. At least that's what it looks like. But it was a whole series of events, so let's break it down.

Burry is often using complex strategies involving shorting and options to make large bets on markets. He was not very successful over the past few years. Most recently, he bet against Nvidia and Palantir by buying bearish put options. That led to some panic in the market, but it eventually subsided.

Michael Burry (Trades, Portfolio)'s Top 10 Holdings, source: GuruFocus.com

Then, out of nowhere, he closed his fund, posting a letter that said: "My estimation of value in securities is not now, and has not been for some time, in sync with the markets." Ouch. But he continues to trade with his own capital. His latest portfolio moves show that he sold all of his previous holdings and bought Lululemon, Molina Healthcare, SLM and Bruker.

Did you know that he launched his own blog? Yeah, Michael Burry (Trades, Portfolio) now has a Substack. And well, he nearly broke the platform. Go check it out if you want.

David Tepper (Trades, Portfolio) Shifts Tech

Tepper is the billionaire founder of Appaloosa Management, a hedge fund known for its aggressive investment style. His strategy combines deep fundamental analysis with a macroeconomic approach. He often makes bold bets on sectors or companies that other investors avoid. This makes him one of the most respected investors on Wall Street.

David Tepper (Trades, Portfolio)'s Top 10 Holdings, source: GuruFocus.com

In Q3, Tepper continued investing in his AI conviction, albeit a bit slower than before. He added to his positions in Nvidia, TSMC, Qualcomm and china's Baidu, but he continued to reduce the other Big Tech names, those that were the subject of some criticism from Michael Burry (Trades, Portfolio) over the past weeks, such a Google, Amazon, Meta and Microsoft, but he also reduced other AI bets, such as Alibaba and infrastructure provider Vistra.

David Tepper (Trades, Portfolio) has long been bullish on AI, but it seems that he is being more restrained. After all, AI stocks have been on a wild ride this year, so you can't blame him for some profit taking.

Ray Dalio (Trades, Portfolio)'s Interesting Moves

Ray Dalio (Trades, Portfolio) is the founder of Bridgewater Associates, one of the largest hedge funds in the world and according to Fortune Magazine, one of the most important companies in the world! He employs a macro-focused, risk-balanced strategy. He is a big believer in diversification and his views on global economic trends are highly respected. I highly recommend his three books, but also his LinkedIn newsletter!

Ray Dalio (Trades, Portfolio)'s Top 10 Holdings, source: GuruFocus.com

Dalio's portfolio is made of 1015 stocks. Don't get scared, these are split across many funds. But there have been some very interesting changes. Dalio is still reducing big tech, selling Google, Microsoft, Nvidia and Meta, but interestingly adding to troubled software giant Adobe.

He also kept increasing his Salesforce holdings and massively increased his stake in ASML. When it comes to the AI revolution, he is essentially selling the customers while buying the suppliers. What do you think he sees in the value of the supply chain? Or is it just portfolio rebalancing? That is a secret he will unfortunately get to keep.

Bill Ackman (Trades, Portfolio) Is Holding Steady

Bill Ackman (Trades, Portfolio) is known for openly stating his views and opinions and not being scared to put a lot of his money where his mouth is. He usually buys a significant stake in companies to try to sway them in a different direction, hopefully improving shareholder value.

Bill Ackman (Trades, Portfolio)'s Top 10 Holdings, source: GuruFocus.com

However, this quarter is a pretty boring one for Bill's portfolio. His portfolio is virtually unchanged, holding a massive 20% position in Uber, betting on the growth of autonomous driving and the competitive advantage of this solid compounder.

Nvidia As An Investor?

That's right! Nvidia also manages a massive investment portfolio, so it has to report as well. While it made massive headlines and stock market moves in the past with its AI micro-cap investments, in the last quarter the portfolio was unchanged.

Nvidia's Top 10 Holdings, source: GuruFocus.com

Nvidia holds a massive stake, the majority of its portfolio, in Coreweave, one of the most successful IPOs of this year, and also its key customer.

I hope this blog gave you some inspiration and insights into how the big guys see the markets. It such a volatile market, it's very important to stay on top of things and have loads of high-quality information.

But as you saw with many of these portfolios, diversification is the key to successful investing. Stay safe out there!