Thu, Aug 17, 2023|Whitney Tilson

'Good artists copy, great artists steal'; Second-quarter 13-Fs of Warren Buffett, Michael Burry, and 59 others; 67 investor letters; Drone pictures from Lake Sunapee, New Hampshire

1) Apple (AAPL) founder Steve Jobs once said:

Picasso had a saying – he said, "good artists copy, great artists steal." And we have always been shameless about stealing great ideas.

It strikes me as obvious that investors would be well served to adopt the same approach, but in fact just the opposite is often the case.

Though few will admit it, I've observed that many of my fellow investors, especially professionals, suffer from a "not invented here" syndrome. I think it's mostly rooted intellectual arrogance. If another money manager already bought a stock, especially at a lower price, then their tender egos won't allow them to buy it because that would be a tacit admission that the other guy is smarter than they are.

For example, how many investors never bought Coca-Cola (KO) or Apple because these are well-known Warren Buffett investments?

Despite often being accused of having an over-active ego, I've never fallen into this trap. In fact, I go to an extreme in the other direction, constantly seeking great ideas by talking to or following the smartest investors in the world.

I read dozens of investors' letters (I especially recommend Howard Marks'), follow a handful that have blogs (e.g., Harris "Kuppy" Kupperman, Chris DeMuth, Eric Rosen, Andrew Walker), attend numerous conferences like Guy Spier's VALUEx Klosters (and co-host my own, the Value Investing Seminar Italy), am on the e-mail lists of friends like Doug Kass of Seabreeze Partners, and every quarter review the 13-F filings of many managers.

With this in mind, let's take a look at the latest moves by some smart investors...

2) The smartest of them all is Warren Buffett who, along with Todd Combs and Ted Weschler, manages Berkshire Hathaway's (BRK-B) enormous stock portfolio, valued at $352 billion based on yesterday's closing prices (CNBC has a real-time tracker here).

On Monday, the company filed its second-quarter 13-F, which didn't have any bombshells. Here's a summary:

The firm sold off more than two-thirds of its position, or about $3 billion in shares, in Activision Blizzard.

Berkshire entered new positions in three firms, all of which specialize in home construction. The largest of these was a $726-million new investment in D.R. Horton.

Buffett made big trims to Chevron, Globe Life, GM, and Celanese, while boosting its stakes in Occidental Petroleum and Capital One.

Berkshire exited three positions entirely: Vitesse Energy, McKesson, and Marsh & McLennan.

In fact, Buffett has called the energy market "one of the greatest generational opportunities of our lifetime, not to be missed." And he has put his money where his mouth is – putting $34 billion into the sector.

Here at Empire, we're also bullish on energy... We even created our Energy Supercycle Investor newsletter to capitalize on the opportunity – assembling a 10-stock portfolio of companies we think are poised to rise 100% to 1,000% in the next few years as this story plays out.

In a brand-new presentation, I share all the details – watch it right here.

3) A website called FinMasters has collected the second-quarter letters of 67 funds and posted them here.

4) This Reuters article covers what my friend Mike Burry is up to, based on the 13-F for his firm, Scion Asset Management: Burry, famous for Big Short, bought bearish options against S&P, Nasdaq 100. Excerpt:

Michael Burry, the money manager made famous in the book and film The Big Short, held bearish options against the broad S&P 500 and Nasdaq 100 Index at the end of the second quarter, according to securities fillings released on Monday.

Burry's Scion Asset Management bought put options with a notional value of $739 million against the popular Invesco QQQ Trust ETF (QQQ.O) during the quarter, and separate put options with a notional value of $886 million against the SPDR S&P 500 ETF (SPY)...

The filing also showed that the fund liquidated its stakes in Chinese e-commerce company JD.com (9618.HK) and Alibaba Group Holdings (9988.HK), as well as regional banks including PacWest (PACW) and Western Alliance Bancorp (WAL) that it had bet on in the first quarter.

The firm noted it had sold its 150,000 shares of First Republic Bank (FRCB.PK) as well, but did not indicate whether that came before the company's May 1 collapse.

Among its long positions, the fund more than doubled its stake in online luxury goods market RealReal Inc (REAL), which is up nearly 100% for the year to date, and added new stakes in iHeartMedia (IHRT), HanesBrands (HBI), and Warner Bros. Discovery (WBD), among others, the filing showed.

Shares of iHeartMedia and HanesBrands are each down 16% or more for the year to date, while shares of Warner Brothers Discovery are up nearly 43%.

The firm also added 10,000 shares of the iShares MSCI Japan ETF, which is up 13.5% for the year to date.

5) Lastly, my friend Scott Tashman of Outset Global Trading sent me a summary of the second-quarter 13-Fs for 61 of the largest, best-known money managers. I've included the list at the end of this e-mail, but below are the ones I follow most closely (and know personally):

Seth Klarman: