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Can You Invest Like a Billionaire with Your iPhone?

Want to invest like a billionaire? There’s an app for that. Sort of.

Starting this week, for $1.99 a month, you can download iBillionaire. The app is meant to let the average investor follow the moves of a line-up of 10 billionaires like Warren Buffett, Carl Icahn and John Paulson. It charts their performance and compares it to the S&P 500. And you can plug in your holdings and the app will compare your portfolio and give advice based on what the billionaires are holding.

Yes, you can get ‘advice’ for $1.99 a month.

iBillionaire co-founder Raul Moreno believes “When you get these 10 people together, there is a lot of insight”. Yes…and no.

Billionaires and hedge fund managers have access, insight, and influence that the average investor does not. But you aren’t going to capture any of that on your phone.

Here’s the thing: the Securities and Exchange Commission requires institutional investors to disclose their holdings every quarter in something called a 13F filing. iBillionaire takes the raw data (which is available to the public) from the filings and puts it to work in the app.

The problem with relying on the 13F filings is that institutional investors are required to disclose their holdings 45 days after the end of the quarter, so by the time the public, and iBillionaire, gets their hands on the information it’s already over a month old. So that ‘insight’ is really more like hindsight.

The other problem is that short positions are not disclosed in the 13F – only long positions are listed. And if a short position exists, managers do not have to mention it, or subtract it from a long position they might have in the very same security. In other words, the filing doesn’t necessarily tell you what a billionaire really thinks of the holdings you see listed.

Obviously, $1.99 per month isn’t going to buy real advice. And playing with an app is not an investment strategy. Investing is not a game. iBillionaire, like Angry Birds, might be fun, but it’s not something bet your money on.


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