To Follow Where the Big Money Is Going, Simply Buy the Big Money Players

One simple investment strategy is to follow a successful investor’s coattails. Many will follow billionaire investors such as Warren Buffett or Carl Icahn as they enter into a new stock position. A few will even own the stocks that are owned or managed by the investors.

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  • Another way is to look at asset management companies. They may not have a well-known billionaire running the helm, but they tend to grow their assets over time — with big profit margins along the way.

    One of the biggest players is Blackstone (BX). The asset manager is valued at over $100 billion, and manages assets over $1 trillion. And while the company’s real estate holdings came under fire last year, the company’s exposure to growth areas such as apartments and warehouses has played out well.

    With so much exposure to financial assets, it’s no surprise shares are down 26 percent over the past year. Earnings and revenues turned negative. But the cycle will change, and Blackstone will likely ride bargains to new highs.

    Action to take: Investors may like shares here for the long haul, and up to $90 per share. The stock yields 6.1 percent at present. While the company hasn’t grown the dividend recently, it’s a sizeable return that pays well while waiting for a recovery.

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  • For traders, the June $90 calls, last going for about $6.30, offer traders mid-double-digit returns on a rebound in the first half of the year.

     

    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.