Super Investors Are Buying These Compounding Machines

Welcome back, everyone. Today on the Joseph Carlson show, we're going to be taking a look at the most recent updates from the super investors. Now, what is a super investor? If you're new to this series, you may be asking that question. Well, super investor, a good comparison I'd make is it's like if you're looking at a sport, you're looking at the best player of that sport. For example, in golf, we just recently saw Scottie Scheffler win another tournament and he sunk a 35 foot chip. That's not something that most people do, especially in tournament settings on the 17th hole. He's really good. He's like Tiger Woods. He's he's super good at golf. There's other people like Bryson DeChambeau that are really good. When people that are really good at sports, we like to look at what they do. How do they swing? What clubs do they use? We try to look at their strategies to better inform our decisions. We can do the same thing here with super investors. Super investors not only manage a lot of money, but they spend all of their time and attention on investing, looking at stocks, looking at great opportunities. Many of them are not only great investors themselves, but they have great research teams to help dig up opportunities in the market. And from that, we can learn a little bit. We can see what they're investing in, which companies are they buying? What are they selling? Overall, what are the themes of the type of companies being bought today? So we can take a look and try to learn and give context to what they're doing. And that's what we do in this series. Now, the slate that we have today is stacked. We have Warren Buffett. We have Bill Ackman. We have Devkant Desaria with Valley Forge Capital. We have investors like Chris Hone, Alterac Partners. These are very high quality growth investors. We have so many others. We have Michael Burry, Terry Smith, Pat Dorsey, Value Act Capital. And we have Chase Goldman with Tiger Global Management. So we have all these investors. They're all buying and selling stocks, many of the same ones that we are. I'm excited to look through them. Now, let's go ahead and start off and we'll kick things off with the big guy himself, the number one in the world, the best investor of all time, Warren Buffett. Now, Buffett's in an interesting position because he has a mix of wholly owned companies that makes up the huge majority of his portfolio. And then he has this portfolio that's like on the side, which is companies that they don't own outright, but it's ones that are publicly traded that they have an investment in. Now, again, the majority of what Buffett does is manage the wholly owned companies. For example, if we look at Berkshire Hathaway today, it's over a trillion dollar market cap. When we look at just the public portfolio, it's a quarter trillion. So around a quarter of the value is in these publicly traded companies. And in these percentages here, like the 22 percent into Apple, that represents of this quarter of the portfolio. So this isn't 22 percent of all that Berkshire manages. This is just 22 percent of this quarter trillion, not the entire company. Now, I want to make that clear because that means that these bets are a little bit smaller than they appear when we look at the percentages. But just because they're smaller bets doesn't mean that Buffett's careless with them or he takes on greater risk. Now, when we look at the latest trades here, Buffett and team did a couple of things. And I say and team because I don't think it's only Buffett making these moves anymore. He's taking more of a backseat. But the investing philosophy overall is remaining relatively the same value oriented investing. What they did was they further reduced their stake in Apple. I believe this is simply because Apple is such a huge position. The growth has slowed down. There's more challenges and hurdles with Apple. They did so well with such a great investment that they can now roll those gains into other companies that are better opportunities. The biggest and most notable buy in the portfolio is UNH, United Health Group. Buffett bought into this company that many retail investors had already been in. And this was a huge bullish catalyst for the stock. The stock rallied around 12 percent on the day that we had news that Buffett team bought into United Health Group. And when we look at United Health Group, the last price reported was three hundred and eleven dollars. So Buffett bought this much higher than it traded down to it traded down into the low 200s. And so there's a chance that he actually could own more today that will be represented in the next 13 of filing. In fact, I think there's a good chance that they continue to buy as this one continued to plummet. Now, what do I think of this buy the United Health Group stock? Well, I actually shared my thoughts in a video before it became news that Buffett owned the company. Now, in this episode, I go over the case for United Health Group stock and why I believe it was a buy. And this was also right at the price that Warren Buffett last was reported buying it. I want to just highlight just like a 30 second clip of this to show you my thoughts at the time. This dip in and of itself is temporary by nature. I view the stock as meaningfully undervalued today, and I think that investors that buy into it will likely do well over the next couple of years. It's not one that I'm personally attracted to qualitatively. I try to avoid insurance companies in general, but I don't blame any investor jumping into this one now. Now, I'm not going to restate the entire thesis on United Health Group. If you want to look at that episode, I go over in depth. But basically, they underpriced a lot of their policies. They went for huge volume growth and number of members. They tried to win market share. And then all these people that they gained market share from that they sold these underpriced medical coverage to overutilize their coverage based on their estimates, costing United Health Group a bunch of money. So earnings per share guidance has plummeted. The stock is making less money today. But over time, the mistakes that they've made in pricing should roll over. It's a lagging effect. So this could take years. But over time, their earnings should go back up to where they previously were. If the stock price follows, that means that you get a nice, healthy dip and a good return over the next few years. So I find this buy into United Health Group as a very fitting one for Berkshire. They know insurance companies. They like deep value plays. This one seems to fit really well. And overall, I like it. I think it's a great buy for the Berkshire portfolio. And I don't say that for every company that they buy. Remember that Berkshire also bought Ally Financial. I didn't like that one. They bought Paramount. I didn't like that one. There's a few other ones that I've had mixed feelings about, but United Health Group is one that I think will turn out well for them. I think it's going to be a win. Next up, we have Bill Ackman with Pershing Square Capital. We just got their report in. Now, if we look at the changes that Bill Ackman decided to make, there's some very interesting ones here. What you'll see highlighted is that they sold Canadian Pacific and they purchased a lot of Amazon and even more Google. Now, a lot of people said that this was a big change. They reported on this, like it just happened this last quarter. But Bill Ackman is one of the few hedge fund managers that is actually pretty communicative on Twitter. Sometimes he shares his portfolio changes ahead of when it's required. And in fact, he's already shared all of these changes on social media. So they shouldn't have necessarily been a surprise on this 13F. We have here May 24th, 2025, billionaire Bill Ackman bets big on the battered e-commerce giant. Now, that's Amazon there. And he bought that Amazon position at a time where if you look at the price now and we look at the time he bought it, he's up around 15% already. So Bill Ackman's feeling really good about his Amazon purchase already. He's already in the green. It's a great holding so far. And I think he's going to want to hold this one for the long term. Now, when we look at the Amazon edition, I just want to take a better look at this one. I'm a little bit biased here because I love Amazon. I think it's one of the best companies in the world. I've talked about it for years. I've made it a centerpiece of my portfolio. If we look at my portfolio, this is what it looks like. This is the story fund, the smaller of the two portfolios. And this portfolio has reached all time highs and gains. We hit another landmark here. It's up around 20% year to date. When I look at my positions here, we only have six of them. Amazon is around 35% of the entire portfolio in the story fund. It's a $140,000 position, $46,000 of that being gains. So this is one that's already done pretty well. I like my performance in Amazon, but I think there's more to run. I think this one has a lot more to go. A lot of people may look at Amazon and see that it's at $230,000. You know, it's had a lot of momentum over the past couple of months. But I still see this one as just such a massive winner over the next 10 years. In artificial intelligence, in robotics, in online retail, in grocery delivery, in logistics, in cloud hosting, in Project Kuiper with satellite internet. They have so many different growth avenues, so many different levers they can pull, and they're continuing to grow revenue at a brisk pace. I just really like where Amazon is today. And Amazon is going to be a theme throughout these super investors. We're highlighting it here that Bill Ackman is one of the first ones to have bought it last quarter, but he's not the only one. It's one of the most popular buy amongst super investors over the past quarter. And I think that makes sense. Amazon, again, has so many good things going for it. One of those things that they just recently announced is grocery. Grocery delivery was one of the weaknesses of Amazon. It was a huge advantage of Walmart. They have all their grocery stores everywhere. People can get on the Walmart Plus app and order groceries. When they're on the Walmart Plus app, they're going to order more stuff from the online store, making it compete directly with Amazon. But now, reportedly, Amazon's going to try to take back market share in grocery. Here's Mark Mahaney, an analyst that I really like, talking about the grocery delivery. Well, it's a low price, low margin sector to begin with. Amazon's been trying to make inroads into groceries for quite some time. Guess what? They actually have made inroads. Last year, they did about 100 billion in groceries and household essentials. What you buy in kind of the middle of the grocery store, in the middle of the supermarket. What they've done here is they've given themselves a chance to turbocharge that growth. And it's come because of this same day delivery service that a lot of households in this country and outside of the U.S. have really come to appreciate the ability to buy something and get it delivered same day. And now they've got this really interesting cross-sell opportunity. So you just bought a book or a garden hose. You're going to have it delivered this evening while you're checking out. Do you want to throw in some bananas? Do you want to throw in some fruit? Do you want to throw in some fish or meat for the night and for the meal that evening? And I just think it's that they sort of tip the scale a little bit here. And by the way, you don't have to pay excess delivery fees. By the way, there's not tipping as there's the case with an Instacart. And I think this this could actually be a really kind of an interesting Trojan horse for Amazon to take that hundred billion, go to two to three hundred billion. They only have five percent of this market. They should be a lot bigger. This may be what gets them there. Amazon's already in a great position to convert a lot of their existing customers into their grocery delivery business. And they're expanding the amount of cities that they're offering this to by nearly double. It's like 2000 cities by the end of this year. So they're rapidly growing how fast they're doing this. So that's just one more reason out of many reasons. So many reasons I could go over of why I like this company. And I think it's overall a great addition to the Bill Ackman portfolio. And when we look at the rest of his portfolio, this is where it stands. At the top of the portfolio, we have Uber and Brookfield. Both of these companies making up roughly 20 percent positions. So they're massive positions. I like both of them. I both think they're very high quality, free cash flow generative companies. I've been bullish on Uber for some time now. Brookfield Corp I also think is great. The ones that I think are questionable as restaurant brands international and Hertz, those lower the overall quality of the portfolio. I think you'd probably do better just putting that money into his bigger positions. Now, overall, if we were to take all of Bill Ackman's positions and have their weighting and look at their year to date performance, the overall aggregate performance of his portfolio is around plus 13 percent. So great performance so far. A super investor doing really well. Another one that I really love looking at, which is one of my favorite super investors, comes from Valley Forge Capital Management, which is Dev Cantassaria. He's great. And he started this hedge fund about a decade ago or a little bit over a decade ago. And he grew up from just a couple hundred thousand dollars, like three hundred thousand dollars to four and a half billion dollars. He has very similar investing thoughts and philosophy to me. So I love learning from his his interviews and his portfolio. But I don't match everything that he does. For example, he sold out of Amazon and that's a company I'm super bullish on. He said that he was very concerned about Google. That's a company that I'm not as concerned about. So we have some differences for sure. He's not someone that's going to invest in Costco or Netflix, but we also have a lot of similarities and we have a love for these very high quality companies. Now, Dev Cantassaria has not had as fortunate a performance this year. He went into the year owning an enormous amount of FICO, having this be 31 percent of the portfolio. It was even a greater percentage before last quarter because it's dropped substantially. If you were to take the same weightings of these companies, the same positions and look at the year to date performance, he's down around 4 percent, 3 percent this year. Now, it's not an official number. That's just an estimate based on the weightings. But overall, it doesn't look good. The market's gone up substantially this year. He's down this year. That's something that does happen even with great investors. Now, the notable thing about this is if we look at the trades, let's go ahead and take a look at all the activity that he does during a time period where his portfolio is going down. This is what he did. He did one trade, which is trimming his Intuit position, the best performing one in his portfolio by 0.59 percent. Now, we can only guess of why he's trimming Intuit because he's only spoken very positively about this company in the past. But if I were to be forced to guess and try to jump into his thoughts, the reason why he's trimmed Intuit in the past three quarters consistently, I believe is because it's just the best performing position. The valuation has gone up a lot. And if he needs to raise any cash for people withdrawing some money or to move around some positions, he might just take it out of Intuit. The other thought process here is that Intuit is really his only software company and he's expressed a little bit of concern about software. So other than trimming his Intuit position by 11 percent, he's kept everything else the exact same. No buying or selling any of his positions. He's even held on to FICO as it's gone through a dramatic drop. Remember that if we look at FICO, this is a company that used to trade above $2,100 per share. You can see that it reached an all-time high earlier this year, $2,200. Now it dropped down numerous times because of lots of developments with their regulatory environment, with scrutiny on the company, with backlash over their pricing metrics, and with the government trying to create a more competitive environment by allowing vantage score. So there is a competitor to FICO, but so far, outside of the government regulation, there's no real evidence that FICO's losing market share. This just opens the environment. It opens the optionality for more competition. So some investors are a bit concerned about that. The sentiment has turned far worse for this company. The fact that he has not sold any FICO shows that he still believes in the company. He's not concerned about it. If he saw that the fundamentals were deteriorating, if he saw that the future looks really bleak for FICO, he would sell the company. He would completely ditch it, take his gains, which he's still in the green on the company, and put it into these other compounding machines. Now you may also ask, well, it's true that he hasn't sold it, but why hasn't he bought more? Joseph, why doesn't he just buy more and more FICO as it goes down 30% plus? That's a good argument, but the problem is he remains almost fully invested all the time. He says that he holds less than 1% cash. He's said this many times in the past. So Dev Cantassaria simply has no extra money to buy FICO unless he's getting new inflows from investors, which probably isn't happening if he has negative year to day performance. He's not going to have any extra money to buy FICO when he's already 99% plus invested unless he sold other positions to buy FICO. And that's not something that he typically does. Right now, he's sticking to a strategy that served him well, which is to simply hold through times of uncertainty. Now, moving on, we get to another super high quality investor that takes a slightly different approach, which is Chris Hone. He manages TCI Investments, which is massive, 50 plus billion dollars. TCI is truly a staggering hedge fund at this point. Now, he's been highlighted before again and again as having some of the best performance of any hedge fund in good years and bad years. And he does that by piling in to the most high quality, indestructible, wide moat, monopolistic companies that you can come up with. When we look at his overall portfolio, you have Railroads, you have Google, you have Moody's, you have Visa, you have Microsoft, you have GE Aerospace, which the more I learn about that company, the more I appreciate how difficult it is to replicate. GE Aerospace, the company that I'd most associate it with in terms of complexity, in terms of technological supremacy, is kind of like an ASML. They create stuff that's so difficult to replicate that most companies don't even want to venture into it. So that's what GE Aerospace is actually doing. Now, to put this in perspective, his portfolio is so good, it's so strong that he considers, he said this himself, that Google is probably his most risky position. Now, I'll mention, if you have a portfolio where Google is your highest risk position, come on, you have a strong portfolio. That's at a point where everything looks pretty good if Google is your highest risk position. Google, the company that owns global treasures like Google Cloud and YouTube and Waymo and has a thriving search business and has AI models and distribution. This company is what he considers his highest risk position. Other than that, these ones are just insanely bulletproof companies. In fact, all he did this last quarter, and this seems a little unfair because of how little he did, and this is what makes him such a good investor, is not doing a lot, just making really good judgments, really good decisions, but very few decisions. He slightly trimmed Canadian National Railway and Canadian Pacific, so he's trimming the railroads a little bit, buying more S&P Global and Visa. He reduced Google slightly, 0.32% of the portfolio. He added a little bit to Microsoft, a little bit to Moody's, and reduced his largest position a tiny smidget, 0.03%. Chris Hone is once again just crushing it by doing nothing. His portfolio performance this year on a weighted average is around 24%, so it's crushing the QQQ, crushing the S&P 500. He is making boatloads of money for his investors while doing nothing, while sitting on his hands, looking at his portfolio, deciding that it's great, it doesn't need many changes, so he's going to keep it basically the same. Next up, we have Alterac Partners with Mark Massey. They're up around 13% on the year, so pretty good performance. The portfolio's $5.5 billion, so this is another huge hedge fund. When we look at the overall portfolio, very few holdings, only nine, and one of them is a 0.02% position, which I don't really count as a real holding. That's just like a watcher position. When we look at their portfolio, it has a very similar vibe. We have Google, we have FICO, we have Visa, MasterCard, Moody's, Microsoft, and we have Amazon and Transdime, so that's the largest position. That's the one that's a little bit of an outlier. They've owned that one for some time, but we look at the biggest trades, and there's some interesting trades going on here with the Alterac team. They sold a lot of Google. I think they got a little frightened, to be honest. During this time period, Q2, Google got a little uncertain. We had the people from Apple, Safari testifying that Google searches were going down the drain, the AI was impacting them. Google came out and said, that's not the case. People are just interacting with the devices in a different way. They're using the Google app. They're not using all of it through Safari. Over time, it looked more like the Google management were right. It's growing organically over time. Search continues to grow. This wasn't necessarily the best sell. In fact, Google's gone up a lot over the past couple of months. This wasn't a great sell, but it looks like they got a little bit nervous about Google, which is understandable. What they did was a trade that I actually don't mind. They took it out of Google and put it into Amazon. The nice thing about people that got scared of Google is that Google was undervalued at the same time that Amazon was undervalued, so you could swap from one to the other and still make money on the recovery, and that's what they did. They bought a lot of Amazon, increased the position by 20%, 4.3% of the portfolio. Overall, I like the trades here. I think that Alterac did a good job. I don't necessarily agree with the Google sell, but putting that into Amazon is not such a bad move. Now, next up, we have Michael Burry, the big short investor, which is always an interesting one because he's kind of all over the place. He's always making trades. He's always buying a lot and selling a lot, and this time, it made a lot of headlines because he matched the energy of Warren Buffett and Berkshire team. He bought UnitedHealth Group. If you look at it right here, the top buy is UNH, and this is call option, so a lot of what he does is in options. This is around 18% of the overall portfolio, so we have the Berkshire team and we have Michael Burry both buying UnitedHealth Group, and I see why. Michael Burry is a value investor. He doesn't care about sentiment. He doesn't care about what you or I think about the stock. He cares about the numbers, so when he sees a company that has a huge moat, that has millions of customers go way down in valuation, sometimes that's going to attract them. We have a few other ones here. We have another healthcare company, ticker REGN. We have Lululemon. That's another one that he has a big call option on. We have a Meta. Then we have Estee Lauder. We have JD. We have Alibaba. Then we have some ASML. ASML is not one that I expected to see show up, but there it is, and we have VFC. So he's okay going into any category, any type of company, whether or not it's retail, clothing, healthcare, whether or not it's Chinese retailers. He doesn't care. He buys what he thinks is value, and he changes his portfolio all the time to buy what he believes is the best value at any given time. Now, it's impossible for me to track Michael Burry's performance because he changes around his portfolio so frequently. Next up, we have Terry Smith. He manages $23 billion, of course, with Fundsmith, and he's had some struggles over the past year or so with the dollar going down that's hurt the relative performance of his portfolio. Now, when we look at the trades that he's doing, one of the companies that he continually buys more of, he over doubled his position in this company, is Intuit. Outside of Intuit, he's reduced or either sold a lot of companies. Brown Forman is one that he completely exited. Then he reduced Philip Morris, Meta, Microsoft, and Striker. These are all companies that I think he still thinks these ones are good companies, but he's probably having to reduce them because of redemptions. My guess is that he's getting redemptions. Some investors are pulling their money out for any given reason. He needs to raise some cash, so he's reducing these holdings across the board. You get more insight or at least more signal from the companies that he's buying. Terry Smith has gone through a recent string of underperformance, but we'll see how 2025 wraps up. I think overall, there's still a chance that he can recover. Now, moving on, we get to another super investor, Pat Dorsey here. Pat Dorsey is an investor that I've been increasingly impressed with his stock choice over the past couple of years. He, like Terry Smith, went through a string of underperformance, I think poor stock picking, and then he improved things. They got a lot better. Leading with Meta. This is a company that he bought when it was way down, and it really helped recover a lot of the losses from previously poorly picked stocks. So Meta has been a massive winner. Now, if we look at his most recent buys, there's also a couple that I really like. For example, we'll organize these by the biggest ones. We have Enovas Corp. This is one that I'm not familiar with, but if we look at Qualtron, we learned that Enovas Corp. is an orthopedic company offering surgical solutions. So it's in the medical field and it's down big. He's buying this company as a value play. It's already down 33% this year. So obviously he has some research on it, and this would be one that I'd have to look into, try to figure out what he sees in the company to see if it's an interesting investing thesis. The other one that he sold, and I think that this is a good sell, is PayPal. PayPal is a decent company. I don't think there's anything too wrong with it. But it's a very generic payment company that has enormous amounts of competitors. Think of all the different ways that you can pay for things. PayPal's kind of in the middle of it. And unlike Visa and MasterCard, it doesn't have that sizable of a network that has those type of margins. So it's not the same category as a Visa or MasterCard. It's a payment solution that's competing with the likes of Toast, with Square, with Clover, with all these different forms of paying. PayPal is always having to invest and compete with them. He sold out of Sprout Social, which I also think is good. And he bought into ASML. He doubled his position into ASML, putting it up to a 10% weighting. So this is now a huge position in his portfolio, the same size of Google or roughly AutoZone, one of these mid-sized positions, and I think it's a great buy. It's a strong company with a wide moat at a five-year low valuation. Another one that he added to his booking holdings, another company in my portfolio. I think that the demise of booking holdings because of AI agents is way overstated. Booking holdings has so much demand and they're highly profitable. They haven't shown any weakness with AI. I like all of the trades that I've seen from Pat Dorsey so far. Now, moving on, we get to Value Act Capital. This is another one that has a fairly concentrated portfolio. The most notable thing about this one is if we look at the activity over the past quarter, we see the common thread here. Another massive addition to Amazon. And they were confident in this decision. They moved 13% of their portfolio into Amazon, so it immediately bumped it up to the top holding by a large margin. They sold off a lot of other companies. They trimmed a lot to make this change. Finally, we get to Tiger Global with Chase Coleman. This is an aggressive tech-focused fund. Chase Coleman has been doing this for a long period of time, and he has one of these portfolios that's heavily weighted towards high-growth tech companies. We have Meta, Microsoft, CLTD, Amazon, Google, Nvidia. Take-Two Interactive, which I think is an interesting one. We have Grand Theft Auto coming out sometime in the future. And on and on. You have a lot of other names that I really like. Spotify, TSM. These are great companies. Reddit is another one that I think is great. So I like the portfolio overall, but what I want to highlight is another thread, another theme that we're seeing here across a lot of growth investors. Amazon is the big one that they added to in Q2. Now, I don't know exactly when they added to it, but they're likely heavily in the green from this addition. We see it reflected in their trading that these investors have a lot of confidence in Amazon over the past three months, making it a bigger position, many of them their largest position, many of them like a 15% position. And I think that they're all going to do really well if they stick with it. Now, some of them may sell out of Amazon. They do a lot of trading. So if it hits a price point of like $240, some of them might take gains. But I still believe that Amazon has a lot of room to run. These other companies, again, in this portfolio, I think are great. Overall, I really like the Tiger Global portfolio. In fact, I think it's better today than it has been in recent years. That's going to be it for this episode. Hope you enjoyed. See you in the next one.