In one sentence: A rerun of 138 (Nov 2017): Danielle tries to use EDGAR to find what great investors own, finds it nearly useless for a timeline, and the two compare compiled sources. Read the original for the full notes; only what's new or sharpened is below.
Key ideas
- Why it was re-aired. Danielle's intro ties it to the AI episodes: how do we do better research? [00:00]
- Index funds are fine if you won't learn to invest, and a poor way to get rich. Phil says broad diversification across things you don't understand is "abdicating" the investment decision. [03:00–09:00]
- A late-bull-market warning (2017). Prices drift away from long-term cash flow, everyone has a tip, Bitcoin is the hot topic. Be patient, humble, and wait for things to go on sale in your own circle. [10:13–13:00]
- EDGAR is the source, not the tool. A 13F lists holdings but not who is buying, adding, or selling from one quarter to the next. You need a timeline, so use a compiled site. [14:09–20:00]
- Why big investors' filings tell a lagging story. They can't buy all at once without spiking volume and the price, so they build positions over months (Phil's example: Buffett's roughly 42 million Apple shares bought in small clips). A 13F can lag by about four months. [21:00–25:00]
- Compiled sources. Phil names his own site's 46 gurus, Dataroma (free), GuruFocus (paid), and others. Cross-check two or three before acting, and know whether the investor is a Rule #1 type or buys a bit of everything. [25:00–28:00]
- 13D/G within days. Owners of more than 5% must report quickly (Phil says 48 hours), so a big holder selling is visible faster than in a 13F. [28:02]
- Looking over a master's shoulder helps, but copying isn't the lesson. He cites a study in which buying Buffett's disclosed purchases beat the market over decades (he recalls about 20% a year; unverified). The next step is asking whether you understand the business. [29:03–30:00]
How it maps to RuleOne
- The screen's event watch and a future Radar agent can track 13F and 13D/G filings. Treat them as a source of ideas only, delayed by months, as in 001.
- Stock pages link out to EDGAR for the primary documents.
Buffett, Munger and Graham links
- Buffett's own quiet accumulation shows up only through filings, which is why they lag. For "invest only in what you understand", see his 1996 letter on the circle of competence.
Words to know
- 13F: quarterly holdings report from large managers, due about 45 days after quarter end.
- 13D/13G: filings required when someone owns more than 5% of a company.
- Volume: shares traded per day. Spikes can reveal a large buyer.
Try this
Pick one investor you respect, look at their latest holdings on Dataroma, then open one position's page from All stocks and note whether you could explain the business in two sentences.
Check yourself
- Why can't EDGAR alone show you what a guru is doing?
Answer
A 13F is a snapshot. It doesn't show whether a position is new, added to or trimmed, so you need a timeline from a compiled source. - Why do big investors take months to build positions?
Answer
Buying too fast spikes volume and pushes the price up against them.
Short quotes
"You got to know who you're looking at." (Phil, ~26:00, auto-transcribed)