Following a guru to investment success. Jim Cramer he’s a guru, so is Edward Lampert, Warren Buffet some might call him the God Father of investment guru’s. There are many investors who actually utilize these, and many other world class investors as an investing compass. You can too! I am going to share some strategies that will let you use well known investors to find stocks that you can put on a shopping list for future stock purchases.
First let’s look at GuruFocus.com, this is probably the best investment web site dedicated to the premise of using elite investors to piggyback off of. GuruFocus, does just that it focuses on well known investors who ascribe to the mantra of value investing. This web site follows the who’s who of value investors, it chronicles the investment purchases over 40 renowned value investors, the likes of: Warren Buffet, Bill Miller, David Dreman, George Soros, Carl Ichan, Bill Nygren, and the list literally goes on and on. Not only does it annotate the investments of these pros but it tracks their gains and losses.
You can actually see which stocks performed the best since they were bought by one of the gurus, and which stocks have not performed well. The site also lists “Guru Consenses”, that is, the stocks most popular among the gurus tracked by the site. There is a “Guru Bargins” list, which lists those stocks that have underperformed since they were purchased by a guru. The thinking here might be, if an investor like Warren Buffet valued a stock enough to buy it at $30.00 per share, enough to buy possibly thousands of shares, but the stock has underperformed since he bought it at $30, now maybe the stock is only $20.00 per share, it might be labeled a bargin stock. A bargin with the endorsement of Warren Buffet, not a bad endorsement if you ask me! There are many other worthwhile features on this site, too many to list here. If you’re a value investor, I would label it a must visit site! If your not a value investor, again I would label it a must visit site, it’s that good.
Want more gurus? I’ve found them, believe it or not the NASDAQ has an outstanding stock screener that allows you to view preset screens loaded with the stock screen requirements of more investment gurus. The preset screens are as listed : Growth / Value Screen, based on the book by James P. O’Shaughnessy , Small Cap Growth Investor Based on the book by The Motley Fool,Value Investor Based on the book by Benjamin Graham, Contrarian Investor Based on the book by David Dreman, P/E Growth Investor Based on the book by Peter Lynch, Momentum Investor Based on the book by Validea Momentum Strategy , Price/Sales Investor Based on the book by Kenneth Fisher , Growth Investor Based on the book by Martin Zweig. Point your browser to: http://www.nasdaq.com/validea/stocks/gurustockscreener.asp?ticker=
The last Guru web site I’ll mention is a subsidiary of “TheStreet.Com”, where Jim Cramer likes to say he’s the all wise, all knowing, chief cook, and bottle washer supreme aka CEO. Stockpickr.com, no it’s not a mis-print, that is the correct spelling. It has not only stock lists that chronicle the stock picks of some of the worlds best investors, but also every day Joe and Joanne’s just like you and me. There are several stock picking and investment strategy lists, even the stock portfolio’s of the average Joe’s list Mutual Fund companies, and other average Joe’s on the site that own the exact same stock as the afore mentioned Joe’s and Joanne’s. It’s quite a nifty site that will leave you with a plethora of investment ideas.
Though investing on the backs of stock market champions is a unique approach, I would be remiss to say that you should simply buy the stocks of the Gurus listed above. That would be akin to the little blind squirrel scouring the forest floor for acorns, eventually he may find one. However, he may also go hungry and starve to death before he does. It’s is always incumbent upon individual investors to do the due diligence (also known as home work) required to identify if the stock meets their criteria or investment philosophy.
Utilizing “Guru’s”, can also prove to be educational. When one of your favorite guru’s purchases a stock, it might peak your couriosity enough regarding the particualar company involved to dig deeper, to find out what exactly that Guru found attractive about the investment. You can also use this approach to verify your theory on a particular company or stock. If you think a company is at a level that you might consider a “Value”, you might check out GuruFocus to see if some of these world class investors agreed and have already purchased the stock. So get out your ruby slippers, or sandals, or Croc’s and head down the yellow brick guru road to see what rewards you might find.