joka

@Spekulatius, is that an issue with extreme long term investors that intend to hold positions indefinitely, assuming you can still pick the stock up for the same price they bought it for? I am not talking about managers promoting their positions here but rather 13F filings.

@Spekulatius, a few questions. We can discuss the managers to clone all day but I am more interested about the latter. Fundamentally, I agree with you that it is great to analyze a company, grasp it fully and only then make an investment. I am completely onboard on that idea and believe in it wholeheartedly. I think that I am more of a taker of ideas than a full cloner but I am interested in knowing why it is that you think shameless cloning wouldn't work? For example, if you can take the best ideas of the best fund managers and copy that idea to the same or a lower price that they bought it for, what would be the reason this would not work? All I can come up with is conviction and if you do not understand the idea, you may act irrationally. Other than that, what would be the reasons you think this would not generate good returns? My theory, and I think this has been backtested, is that it should generate superior returns as you are literally copying the best to the same price. Fundementally, I am assuming that their ideas will always be better than mine given their experience, resources and so on.

@Paarslaars, the point about the hedges is really interesting and something I have thought about but not really acted on. The kind of investors I clone are usually long-only, buy&hold, concentrated type investors like for example Guy Spier, Seth Klarman, Prem Watsa etc. What kind of hedging would such investors have you think? I usually tend to clone largest holdings and so I am betting on high conviction bets that have been made by several "superinvestors" to try to counter the effect of choosing losers. I am not thinking about it on a portfolio basis (although I try to have some diversification) but mostly I think on a company-by-company basis and the investors I follow are not macro-type investors so I am ok with their approach working less well during certain periods. I try to have an infinite time frame in those cases. You are right though, when it comes to Berkshire, I do own a large chunk of my portfolio in it and as half of that portfolio is Apple for example, I would not clone a purchase in Apple but might clone some position they have a 5% holding in.

That's a good point @elliott and it might be sub-optimal to add my own filter and not just follow a strict cloning process. My research is usually to understand the investors thesis so that I can stay calm in moments of turbulence and I haven't really disagreed with any one investor yet. However, it could be that I choose not to clone a specific company in case I happen to own several similar businesses or something along those lines.

If your grandmothers broker is Buffet and he gives her a quarterly update, I'd say there is no difference Jokes aside though, shameless cloning allows you to choose amongst known investors with a proven track record and loads of material to research these people to clone. There is no crooked incentive on their behalf either and they are invested in the tips you take and aren't just giving tips for the sake of giving tips. I'd say that is significantly different but I take your point that in the end, you are just taking tips from someone.

@Longnose, good to hear! Have he done this for long? BABA is a good case study as many have sold out of that position which made shameless cloners a little shaky but that is where it helps to have more than one investor you clone that idea from and of course have your own conviction as you say. In my case for example, it didn't matter much that Pabrai sold out (which we later found out was a tax loss harvesting play) but the majority of the folks I cloned still kept their position and thus, so did I.

Hey @Gamecock-YT, that is a valid point and the way I think about that is two-fold. First, I do clone but I also clone companies I am able to understand and I try to figure out what the thesis of the investment manager is by reading their shareholder letters, listening to interviews and so on and so forth so I do a fair bit of research myself as well. However, I do have some positions that I can't claim I grasp fully and those are more of a pure clone. In that case, I rely on the fact that the investors I have cloned are super long term (inactive) investors and they make the analysis and buy once they decide they want to own a company for many years. If all of the investors I clone chooses to sell out all of their position, I am ok with doing that with a 3 month delay. I think that managers could sell for many reasons and all don't have to be because they think the investment is a bad one but maybe they found a better idea but if everybody that I cloned sells, that is a sign that they may have found a flaw in the analysis and I would sell the moment I found out which will be delayed. I am thinking that delay wont matter much over the long term if I sold three months prior unless the company goes completely bankrupt. If I were to clone shorter term investors, this would be a big problem however. For example, looking at Michael Burry who can change his entire portfolio within a quarter is not someone I would clone for this exact reason but Charlie Munger who makes a move once every decade is easier to clone and a 3 month delay may matter less in that case. Now imagine having 5 Charlie Munger type investors who would all need to sell out for me to sell. I am assuming that is unlikely in this case.

Hello fellow investors! I have been a passive investor for quite some time until I, around a year ago, adopted the shameless cloner strategy and allocated a portion of my portfolio using this strategy. It is currently a smaller part of my portfolio and I am taking my time to try and figure out what the possible downsides of such a strategy might be before I increase that portion and thus starting this thread to get your inputs. My cloning strategy as of today is that I identify a handful of Buy & Hold Value Investors with a long and solid track record and more importantly are investors I feel comfortable cloning purely based on my assessment of their personalities and to what extent I trust their ability and decency. Of course this is based on public material and one could argue that it is not entirely representative of who they really are but the reasoning here is that the more I trust the manager, the more likely I am to not panic in tough times assuming they keep their positions in whatever company I have cloned. Secondly, I don't clone single ideas but ideas that appear in many of the portfolios of the managers I have chosen to clone and is selling for a similar price to what the lowest price during the quarter they bought was. A great example would be Alphabet, which appears as a top holding for almost all of the investors I clone and many of which have been adding significantly to during last quarter. My logic here is that if multiple investors have went through the analysis and concluded the same thing, it is far more likely to be correct than if only one investors does so. Having multiple investors owning the same stock you clone also helps when one or two investors sell that holding for whatever reason and my rule is that, unless all or a huge majority of the managers I have cloned sells, I wont sell. This again makes it easy with conviction and allowing me to hold the position for a long time as I think conviction is a big challenge when cloning. In conclusion, the main risks I have identified are conviction (which I counter through multiple investors I find trustworthy investing before I clone) & the fact that only US holdings are public which I am ok with today as the US is where I invest most of my money anyways. My question to you guys is, what am I missing?