"Golf has Tiger Woods, novelists have Tom Clancy, and the investment community has stars such as Bruce Berkowitz, Bill Nygren, Charlie Dreifus, and Mario Gabelli," states Paul Tracy.
In his The Street Authority Market Advisor he suggests, "These money managers are at the pinnacle of their craft." Here, he takes a look at these "celebrities" and some of their current top stock holdings.
"These money managers have all amassed prodigious gains over the years for their shareholders.
"Over the past few months, these gurus have come out with ringing endorsements for certain stocks. This isn't empty talk -- they are putting their money where their mouth is.
"Thanks to regulatory filings, interviews and shareholder reports, we can look over their shoulders and see where these elite investors are currently finding the most promising opportunities.
"Bruce Berkowitz is the lead manager of the Fairholme Fund, which has delivered a cumulative gain of 150% since inception 9 years ago. By comparison, the S&P 500 has backtracked -28% over the same time frame.
"When asked recently to name the one key metric that he uses to evaluate investments, Berkowitz didn't hesitate to say 'it's all about the amount of cash a company generates that can be passed to owners in relationship to the price.'
"Lately, he has plowed more than 50% of his fund's assets into health-care (particularly big pharma), aerospace and defense.
"His rationale is that there is ultimately nothing more important than the health and well-being of our families, and defense and health-care spending eat up a large percentage of the federal budget.
"His largest portfolio holding is Pfizer (NYSE: PFE), and recent buys include Boeing (NYSE: BA), General Dynamics (NYSE: GD), and Northrop Grumman (NYSE: NOC).
"Bill Nygren is lead portfolio manager of the Oakmark Fund, which has racked up double-digit annualized gains for the past 18 years. Nygren is confident that, over time, undervalued stock prices will always rise to reflect the value of the underlying company.
"In general, he prizes excess cash flows and relies on discounted cash flow (DCF) modeling for valuation -- buying stocks trading below 60% of fair value and then selling once they reach 90%. Nygren runs highly concentrated portfolios, so only his best ideas make the cut.
