Last week, we introduced you to 10 new billionaire investors we’re following. These were the first new additions to the TradeStops Billionaire’s Club in almost two years.
In past articles and webinars, we’ve focused on using the billionaires to build portfolios that have the potential to greatly outperform the markets over a long period of time. This was the first chart we showed you back in 2017.
More than a year ago, we showed you the results of using just four of the billionaires (Buffett, Icahn, Klarman, and Einhorn). Their methodologies for finding stocks are unique and using just these four billionaires could have given you a spectacular return.
I like to follow Pure Quant portfolios with these four billionaires by setting up a TradeStops Watch portfolio titled “BIKE Portfolio” using the last names of the four to come up with the BIKE acronym.
One of the billionaires we talked about last week was Chase Coleman III. Most of the billionaire investors we follow use different methods of fundamental analysis. Chase Coleman is different. He was an early investor in both Facebook and LinkedIn. His funds focus on stocks with cutting-edge technology.
Here’s his page in the Billionaire’s Club (with the stocks’ tickers and names hidden). We sorted this page by the most recent purchase date. When I first saw this page, three things caught my attention.
The first thing I noticed is that his most recent purchases are in the Stock State Indicator (SSI) Green Zone. There’s not a single stock in the SSI Red or Yellow Zone. That’s impressive.
The second thing that stood out is the large number of stocks with a gray SSI signal. Remember, when the SSI signal is gray, that means the stock hasn’t been trading long enough to have developed an SSI signal. Normally, it takes about two years for a stock to develop an SSI signal. Also, a stock that has been trading for less than a year has a default Volatility Quotient (VQ) of 25%. Look at how many of Coleman’s stocks have a gray SSI signal and a VQ of 25%. This shows that he’s an early investor in these stocks and it’s possible he owned these stocks before they went public.
The third thing is the relatively high VQ for the stocks he owns. There’s definitely no Coca-Cola (KO) or Proctor & Gamble (PG) in this portfolio — both of which have a “low-risk” VQ of about 10%. In this screenshot, the lowest VQ stocks are those that haven’t traded long enough to develop a VQ!
There’s no way I’d ever be able to have the insight into these new cutting-edge technology stocks. Most individual investors don’t have the time to do the research and certainly don’t have access to the companies’ management like Coleman and his team do. But, we have the Billionaire’s Club. We can see what he owns and what he believes will be successful businesses and stocks in the future.
This is an investor I want to follow closely. I’ve set up a Watch List to follow his stocks. It’s easy to do so in the Billionaire’s Club. Just click on the green rectangle below the billionaire’s name at the top of the page and in a few seconds, a new Watch portfolio has been created with all of that investor’s stock holdings.
We’ll look at the new billionaires more closely during our educational webinar on Wednesday, June 19, at 1 p.m. ET. Click here to register for the event. Meanwhile, I’m working with our research team to look at the results of the previous BIKE portfolio with the addition of Coleman’s stocks and hope to share these results during the presentation.
TradeSmith Research and Education Specialist