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Following the Leaders: What Did Big Money Managers Buy Last Quarter?

Following the Leaders_ What Did Big Money Managers Buy Last Quarter_

Following seasoned money managers like Michael Burry might have upsides and downsides, but there are definitely some cases where following the experts might teach you a lesson or two.

Money managers with over $100 million dollars in assets under management (AUM) are made to report what stocks they buy or sell within the quarter they do so. That info can be seen on a granular basis through sites like Fintel, which pulls data from the Securities and Exchange Commission’s EDGAR database.

At the end of every quarter, though, one site puts together a heat map of the pickups made by some of the more reputable and notable names in the hedge fund and money management world. It’s called the 13F Heat Map by WhaleWisdom.

The heat map looks at stocks which are getting the most attention from promising fund managers and activists like Blackstone, Bill Ackman’s Pershing Square Capital, and Saudi Arabia’s Public Investment Fund. At the end of every quarter, the WhaleWisdom site then tallies up the stocks that saw the most interest.

In Q2 2022, which ended on June 30, 2022, the top stocks had a remarkably similar theme. NVIDIA, QUALCOMM, UnitedHealth Group, S&P Global Inc., and Alphabet were the top five stocks. Beyond the top five were other names such as Adobe, Shopify, Netflix, Apple, Tesla, Amazon, Visa, Mastercard, and others.

Related: Investors Have Mostly Been Unphased By Weak Earnings reports In Q2 2022.

What’s the theme here?

Every one of these names is a large-cap, blue chip stock. Many of these names score among the weightiest in the U.S. stock market – they command considerable presence in the S&P 500 and Nasdaq-100.

The purchases by large institutions align with the purchases reported at broker-dealers by scrappy retail investors, which largely turned away from small and mid-cap companies during Q2 2022. They turned into the comfort of international companies and super large-cap companies.

While we’re not necessarily for or against trading individual stocks at Front, it’s important to understand the way that the market is looking at things. Just because large institutions bought a stock doesn’t mean it’s necessarily going to go up – remember, institutions are just run by people, who are privy to making some of the same mistakes that individual traders make.

However, the market’s temperature for big tech and large-cap companies says a lot about investor comfort (and the state of things.) The concentration of these purchases says that comfort is not so great outside of the market’s leaders…

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