The 13F report (13 Filings or SEC Form 13F) is mandated by the SEC for investment institutions managing over $100 million, including mutual funds, hedge funds, pension funds, trust institutions, insurance companies, etc., to disclose their stock positions every quarter.
The 13F report primarily reveals the stock holdings of major investment institutions, allowing investors to keep track of the movements of these large investors, making it a focal point of interest for many investors.
To access the latest stock holdings of major U.S. stock investors and obtain information on the market, one must review the 13F report.
13F publication time: Within 45 days after the end of each quarter.
13F disclosure information: The latest stock holdings of institutions managing over $100 million.
13F publication websites: The official SEC website, but there are other more user-friendly websites for inquiries, such as Dataroma, Nasdaq, etc.
1. Where Can Access the 13F Report?
The 13F report can be viewed on the SEC's official website. However, the SEC's website publishes reports in chronological order, which is not very user-friendly for reading. Moreover, simply viewing the report itself is not very meaningful; it needs to be compared with past data to understand changes in holdings and other aspects.
There are several free websites on the market that organize 13F reports. These sites allow users to see the top 10 holdings of these large institutions, the purchase prices, and changes in holdings over the past six months. They also offer a search function, making them more convenient to use.
For beginners, it is recommended to use free websites like Dataroma and Nasdaq.
For more professional and seasoned investors who want to conduct in-depth research on large institutional investments, websites such as Insider Monkey, Whalewisdom, and Gurufocus can be used.
1. Key Points to Observe When Reading the 13F Report
Key Point 1: Observe which stocks are being purchased by large institutions.
The Dataroma website compiles the holdings changes of 65 large institutions (superinvestors), allowing us to see what types of stocks these large institutions are buying.
Taking 2022 Q3 as an example, the most purchased stocks by large institutions were: META, MSFT, AMZN, GOOGL, CRM, V, BKNG, PYPL, and DIS. These are mostly large-cap stocks, primarily in technology, travel, and payment-related sectors.
Key Point 2: Adjustments in Holdings of Key Institutions.
Some large institutions, due to their substantial funds and significant market impact, are the focus of attention.
For example, Warren Buffett's Berkshire Hathaway is closely watched for every move it makes.
On the Dataroma website, one can find the latest quarterly changes in holdings of large institutions, including purchases, sales, and changes in the number of shares held and their proportion in the investment portfolio.
Taking Berkshire Hathaway as an example, the adjustments in holdings in 2022 Q3 are:
Increased Holdings: OXY, PARA, RH, CE, CVX
New Purchases: TSM, LPX, JEF
Reduced Holdings: KR, GM, ATVI, BK, USB
Completely Sold Out: STOR
3. Is the 13F Report Worth Referencing?
Large institutions in the United States have substantial funds and are mostly long-term investors, not short-term traders, making their holdings worthy of reference.
3.1 Investors must be aware that the reports we see are lagging indicators.
According to the 13F filing requirements, institutions must submit their reports within 45 days after the end of a quarter. Most institutions tend to delay submission until the last moment. Therefore, if an institution buys shares on July 1st, we might only be able to see this information by November 15th, leading to a lag of 4-5 months before we can learn about the changes in these large institutions' holdings.
Think about it, if you were a fund manager, would you want others to know about your holdings changes? Of course not. With this in mind, fund managers are more likely to adjust their holdings at the beginning of the quarter and submit their 13F report on the last day, meaning others would only learn about these adjustments 4-5 months later.
The issue with following these institutions in buying and selling stocks is the significant time lag. The stocks that were supposed to rise might have already peaked.
3.2 If an institution makes a wrong assessment about a particular stock and later decides to sell it, we cannot see this change immediately.
Historically, there have been many instances where large investors have misjudged and sold stocks at a loss. For example, Warren Buffett bought 1 million shares of Delta Air Lines in February 2020, at the onset of the COVID-19 pandemic. Many people followed suit, but he quickly sold all his airline stocks in April 2020, stating that the nature of the industry had changed, which left many investors stunned.
3.3 The 13F report only discloses the stock positions of these large institutions; it does not reveal their short positions, futures, options, or other holdings.
In reality, many large institutions have significant positions in derivatives that are not visible to the general public. This allows these institutions to have some leeway in concealing their financial positions from others.
4. Key Points Summary
The 13F report, mandated by the SEC, requires investment institutions managing over $100 million to disclose their stock holdings each quarter, with the report being published within 45 days after the end of the quarter.
The 13F report allows investors to understand the dynamics and stock adjustments of U.S. stock market institutions.
The 13F reports published on the SEC website are not easy to read and do not compare with previous data. Beginners are advised to use websites like Dataroma and Nasdaq for easier access and analysis.
When reviewing the report, focus on which stocks these large institutions are buying and observe their latest adjustments in holdings.
The 13F report can be a reference for long-term investments, but it's important to be aware that the information is lagging. Blindly following large investors might lead to buying at relatively high points.