Executive Summary: GuruFocus tracks the purchases, holdings, and sales of top investors, allowing subscribers to mirror their portfolios. Lag time is between three days and two weeks. Cost is $29/month for their premium service, but you can sign up for a basic version for free (check out the difference between them here).
What is GuruFocus
The genesis of GuruFocus came during the tech bubble when Charlie Tian, a Fujitsu scientist, lost his money when he went long on tech stocks. The realization that he didn’t know as much as he thought left him wondering how he could mirror the trades made by top investors like Warren Buffett. He has since that day compiled the portfolios of John Paulson, George Soros, and Howard Marks to name a few. Who are these guys?
John Paulson – Founder and Principal of Paulson & Co hedge fund. Billionaire investor who bet against the housing market.
George Soros – Billionaire hedge fund owner best known as the man who broke the Bank of England during the 1992 UK Currency crisis.
Howard Marks -Chairman of Oaktree Capital Management.
You can find a full list of the Gurus by clicking this link.
Following these gurus gives you the chance to mirror their returns, of course on a much smaller scale and after they have already made their moves. The primary risk is that you are trusting a single individual to beat the market.
Is GuruFocus Free?
GuruFocus has a free service and a premium service. Their free service gives investors a quarterly report of the trades made by the gurus, summary of the insider trades, company analysis and investing strategies made famous by the gurus, and a number of valuation tools.
The premium access provides real-time trades by the gurus (within three to fourteen days) and two stock screener tools. The first is the GuruFocus Net-Net Screener, which finds stocks selling below current net asset values. The second is the Buffett-Munger Screener, which looks for buy and hold stocks, stocks from high quality companies that they have screened in order to identify the ones with historically low P/S (Price-to-Sales) and P/B (Price-to-book) ratios.
Gurufocus has additional features as well. Their premium membership gives you access to three monthly newsletters. Here’s how they describe them:
Ben Graham Net Current Asset Bargains Newsletter picks the single best – single safest – U.S. net-net available each month.
Buffett-Munger Best Bargains Newsletter finds companies that have favorable long-term prospects and trade at reasonable prices.
Micro-Cap Magic Formula Monthly Newsletter capitalizes on the “micro-cap” blind spot “the magic formula” developed by Joel Greenblatt.
Who should use Gurufocus
GuruFocus is for a slightly more sophisticated investor who manages his or her own investment portfolio and wants to supplement their knowledge with additional research tools. Tools that allow them to see what some the richest and best investors have done. Having access to the trades made be John Paulson is valuable and I found myself getting pulled into his profile and the profile of other investors. I ended up studying the investment strategies probably more than I wanted to because of the mystique of the gurus and my desire to learn from them and picked up some interesting ideas that I’ll use in my more aggressive account. You’ll get the best out of GuruFocus by using it to augment your own trading strategy and ideas.
Let’s be clear. This is not a personal finance software that allows you to set up automatic investing options. It’s a research tool that provides information on the investment strategies of people who have been very successful with their money. You could try to track these investors on your own by scouring news sources and public filings, but it will be time consuming and difficult. Use GuruFocus if you want to test the self-managed investment waters and are looking for guidance.
GuruFocus is a tool in your arsenal to help you make strategic investment decisions. Following “gurus” won’t lead you to investment Nirvana, but it will give you valuable insights into the brains of some of the world’s richest people. With that knowledge, you’ll be able to see what direction they believe that economy is taking, which companies they see as valuable, and then follow their moves. It’s valuable information, whether you agree or disagree, it’s a lot of fun to read.
Sign up for GuruFocus by clicking here.
All the best in your investing.