As an ordinary investor, faced with thousands of stocks in the US stock market, do you also suffer from decision paralysis? Which stocks are worth your time for in-depth research?

When you are clueless, you may want to look at other investors in the market, especially star fund managers (investment masters), to see what they are buying or selling, maybe you can gain some investment inspiration.

For example, if you are a value investor, you should want to know what recent investments Warren Buffett's Berkshire Hathaway has been making. If you are interested in Chinese concept stocks, you might also want to check the holdings of Asia's largest private equity fund Hillhouse Capital.

So, where can you see the changes in the holdings of these top institutions?

The answer is Form 13f.

Definition: The US Securities and Exchange Commission (SEC) stipulates that institutions with assets exceeding $0.1 billion, fund managers are required to submit their holdings reports to the SEC after each quarter.

How to understand: The purpose of establishing Form 13f was to balance the relationship between large investment institutions and small investors, with the aim of increasing US investors' confidence in the financial markets. Today, Form 13f has become a primary way for small investors to peek into the flow of "smart capital," decrypting institutional investment logic and trends.

Here, holdings refer to institutional long positions, meaning what institutions are buying, increasing positions in, or reducing positions in. It does not include short interest, which refers to the positions where institutions short a stock, and those are not visible.

It is worth noting that because Form 13f is a document required by the US Securities and Exchange Commission, the disclosed holdings on Form 13f are only for the US stock market. For example, Hillhouse Capital's investments involve the US, Hong Kong, and A-share markets, but the Form 13f disclosure can only show its holdings in the US stock market and not in the Hong Kong and A-share markets.

Definition: Institutions must submit Form 13f to the SEC within 45 days after each quarter.

How to understand: There are four quarters in a year, in other words, institutions disclose Form 13f four times a year, after the natural year Q1, Q2, Q3, and Q4.

Since the SEC requires submission of the document within 45 days after the quarter, the timing of different institutions submitting Form 13f varies. Some institutions submit on the first day after the end of the quarter, while others wait until the 45th day after the quarter ends. If the deadline falls on a Saturday, Sunday, or holiday, it is extended to the next business day.

For example, the end date of Q1 in 2022 is March 31st, and institutions must submit the Q1 quarterly holdings report by May 15th at the latest. As May 15th is a Sunday, institutions can submit the report by May 16th at the latest.

By analyzing Form 13f reports, investors have the opportunity to observe changes in the style of US stocks and learn the strategies of successful investment masters.

First, Form 13f serves as an indicator of US stock sentiment. Stock investment, in a sense, is a process of voting with money. Therefore, on Form 13f, you can see how the group of people with the most 'voting rights' in the market views this market.

For example, if everyone is reducing their holdings of a certain sector's stocks in a quarter, it may indicate a negative outlook on that industry. If several top institutions are buying a particular stock, it may indicate good company operations with research value.

Secondly, form 13f can help investors learn the investment ideas and strategies of investment masters. In the US stock market, there are many well-known star fund managers, such as Buffett, Munger, David Tepper, Bill Ackman, and others. There are also domestically familiar investors like Hillhouse Capital and Sequoia Capital. They all have their own distinctive investment styles and strategies, as well as industries they excel in and those they are not good at.

By tracking their holdings for a long time, you can observe their investment techniques, thus learning their investment ideas and strategies.

Of course, form 13f is not omnipotent; it also has its drawbacks, with the biggest drawback being the lag and lack of short interest data in the 13f filings.

Firstly, the holding data in form 13f may have a lag. Due to SEC regulations requiring institutions to submit the 13f report 45 days after the end of the quarter, the institution's holdings may be lagging.

For example, if an institution buys a stock on January 1st, this belongs to Q1's holding change. If the institution sells the stock on April 1st, it belongs to Q2's holding change. The institution can publish the Q1 13f report on May 15th. When investors see that the institution bought the stock, they may have actually sold it. Therefore, long-term tracking of institutional holding changes is crucial.

Secondly, form 13f does not require institutions to disclose short interest. Since form 13f only discloses long positions and not short interests, for institutions using hedge strategies, their holding change information may be less relevant. If a hedge fund's strategy is primarily shorting, their fund's short positions may exceed long positions. Therefore, understanding an institution's investment style and strategy is essential when reading 13f reports.

On the SEC's official website, you can find Form 13f. However, official documents are relatively difficult to read, not as intuitive, and not very user-friendly.

Users can check the institutional holdings list on futubull. The specific path is on the 'Market' page, click on the 'Opportunities' section, and find the 'Institutional Tracking' feature.

Summarize.

Due to the extreme transparency of the US stock market, investors can see the changes in the positions of modern investment masters. However, relying solely on the position changes in a Form 13F report is not enough to support an investment decision. Because even star fund managers make mistakes at times.

However, by observing these top institutions and the techniques of investment masters over the long term, you have the opportunity to learn about their investment thinking and their investment strategies. Learning this kind of strategy is far more important than just seeing which stocks they are buying.