When I buy a company, private or public, I have a checklist.
Number one: People smarter than me. This was the idea behind the last company I started, Stockpickr.com – I don’t like to do a lot of heavy lifting. I like smarter guys than me to do the earlier heavy lifting. So I look for good successful investors who are also buying the stock.
When it comes to Dendreon (DNDN) that’s easy. According to recent filing there are at least 4 super billionaire investors who are accumulating the stock. What am I going to do if I run into them at a cocktail party? Argue with them? Can you imagine arguing with some of these guys about their stocks?
Ken Griffin, who started Citadel Advisors out of his college dorm room. According to recent filings he owns $15mm worth of DNDN stock. According to a little financial rag called Forbes, Griffin is worth $2 billion. His annual performance since 1998 has been in excess of 20%. He also acquired in the past quarter 4mm shares of SIRI stock.
Stevie Cohen, of SAC Capital, has also averaged over 20% per year since he started his fund in the early 90s. Cohen bought 1mm shares this part quarter of DNDN, bringing his total number of shares to over 7mm. According to Forbes, Cohen is worth over $7bb. Some of SAC’s other big holdings include Apple (AAPL), Genzyme (GENZ), and Human Genome (HGSI).
You can see my recent article, How Stevie Cohen Changed My Life
George Soros, uber hedge fund manager, picked up 2mm shares this past quarter bringing this total holdings to around 4mm shares. Soros is the 14th richest man in the country with a net worth over $14bb. Some of Soros’s other big holdings include C and F.
Soros and Warren Buffett are often considered the two best investors ever. See my related post: 8 Unusual Things I Learned From Warren Buffett.
David Shaw, worth $2.5bb according to Forbes, is the founder of the eponymous hedge fund, DE Shaw, described by Fortune Magazine (who?) as “the most intriguing and mysterious force on Wall Street.” DE Shaw bought up 750,000 shares of DNDN bringing his total holdings to almost 1.3mm shares. He also owns shares in Baidu.com (BIDU) and General Electric (GE).
When you have a lot of money on your hands you have to make the right decisions. I’ve been a believer in DNDN since I was writing at thestreet.com and arguing with Adam F ever since it was below $5. But I haven’t always made the right decisions. Here’s my article What It Feels Like to Be Rich where I end up suffering the consequences.