5 Famous Investors And Their Portfolio Diversification

Diversification covers up ignorance.” – Bill Ackman

“If you can identify six wonderful businesses, that is all the diversification you need. And you will make a lot of money.” – Warren Buffett

Some investors are big proponents of wide diversification, others hold very concentrated portfolios. In this post, we look into the portfolios of five well-known investors and how concentrated their portfolios are. The information of holdings comes from SEC filings, looks at long equity positions in the portfolios these investors manage, and are in most cases as of 31 December 2017.

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See 2017 Hedge Fund Letters.

Bill Ackman

Hedge fund manager, founder and CEO of Pershing Square Capital Management.

Carl Icahn

Businessman and investor, controlling shareholder of Icahn Enterprises.

Daniel Loeb

Hedge fund manager, founder, and CEO of Third Point.

David Einhorn

Hedge fund manager, founder, and president of Greenlight Capital.

Warren Buffett

Legendary value investor, chairman, and CEO of Berkshire Hathaway.

Buffett Has the Largest Number of Holdings

Portfolio Diversification

Buffett has the largest number of holdings in his portfolio, but he also has the largest portfolio in terms of AUM by far. Ackman only has 7 long equity positions in his portfolio.

Icahn Is Heavily Concentrated in His Icahn Enterprises LP

Portfolio Diversification

The top holding for each investor is:

  • Icahn: Icahn Enterprises (IEP US)
  • Ackman: Restaurant Brands International (QSR US)
  • Einhorn: General Motors (GM US)
  • Loeb: Baxter International (BAX US)
  • Buffett: Apple (AAPL US)

The Top 5 Holdings Almost Make Up 90% of Ackman’s Portfolio

Portfolio Diversification

Only Loeb has less than 50% in the top 5 stock holdings. As Ackman only holds 7 long equity positions, his top 5 holdings naturally account for a large part.

Fewer Than 10 Stocks Make Up 90% of Icahn’s and Ackman’s Portfolios

Portfolio Diversification

Loeb has spread out his capital the most, his top 10 holdings account for 61%. The other four investors are more concentrated, their top 10 holdings account for 77-100% of their total long equity portfolio.

Article by Become A Better Investor



About the Author

Dr. Andrew Stotz, CFA
Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company providing institutional investors with ready-to- invest portfolios in Asia that aim to beat the benchmark through superior stock selection. The company also provides buy- and sell-side clients with financial models to value any company in the world and World Class Benchmarking to determine what companies are financially world class. Previously, as Head of Research at CLSA, Andrew was voted No. 1 Analyst in Thailand in the Asiamoney Brokers Polls for 2008 and 2009. He was also voted No. 1 Analyst in Thailand in the 2009 Institutional Investor magazine All-Asia Research Team Report. Andrew earned his PhD in finance at the University of Science and Technology of China in Anhui province, with a focus on answering questions raised by fund managers and analysts during his career about picking stocks and managing portfolios. In addition, Andrew has been a lecturer in finance for 22 years at various universities in Thailand. Since 2013, he has been the president of the CFA Society of Thailand. He is also the author of How to Start Building Your Wealth Investing in the Stock Market.