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Ivy Schmerken
Ivy Schmerken
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So You Want to be a Billionaire?

Founders of iBillionaire are offering a free mobile app to track the equity holdings of Warren Buffet and hedge titans like David Tepper based pulling data from their SEC filings. But, is this misleading the masses?

Since there is an app for practically everything these days, why not create software that allows the average investor --or even the professional -- to track the portfolios of billionaire investors like Warren Buffett and Carl Icahn?

An app called iBillionaire was launched this past Wednesday on the Apple Store, to help investors track the equity holdings of their favorite billionaires. The software tracks what billionaires like Buffett, John Paulson and Bill Ackman are buying and selling.

In an interview on CNBC this past Wednesday, Raul Moreno, founder of iBillionaire said he came up with the idea while he was looking for what to do with shares of Apple. He went online and found that hedge fund manager David Tepper, founder of Appaloosa Management with over $7 billion in assets under management, held the stock while other billionaires were selling the stock. In addition, Moreno also wanted to track the stocks on his iPhone, so these two factors fueled his innovative app.

In a different interview with CNN Money, Moreno also indicated that users "will be the first to know" when these billionaires make changes to their portfolios.

While the investing app is free to download from the App Store. They will also offer a premium site, $5 for a year, which provides push notifications for all the stocks in the portfolio.

According to an article on CNN Money, the founders Moreno and Alejandro Estrada created iBillionaire on a shoestring budget (just under $100,000). They want to give individual investors a view into the strategies of 10 of the most well known billionaires in the world. The software gets all of its data from the SEC.

From CNN Money:

Using SEC filings, the data are fed automatically into the app, though the iBillionaire team has a data analyst on staff who spot checks. The app also comes with a Google (GOOG) news feed that automatically updates news about the billionaires and the stocks they own.

How it works: Opening iBillionaire brings you to a screen that lists the billionaires by name, net worth and reputation.

Click on any name and you get taken straight to their portfolio holdings. For example, clicking on Buffett brings you to a screen that lists his stock investments by name and ticker, along with how much of his portfolio is dedicated to each holding. You can also easily see what he paid for each holding and how it's fared since he bought it. And you can easily track how his portfolio stacks up against the broader market.

This seems like a terrific tool for learning about the strategies of legendary investors on a mobile device, which means it can grab updated data. But this can be misleading to retail investors.

How accurate and comprehensive is the information that iBillionaire is collecting? These are some hard charging hedge fund managers and it's conceivable that they are adding to and trimming holdings on a daily basis.

While Buffet and Icahn are long-term investors their traders could move in and out of positions daily and their SEC filings do not reflect these short-term moves. The app is accessing 13F filings with the SEC by institutional investment managers that are filed with the SEC by the end of the quarter. According to the SEC, an institutional money manager who uses the U.S. mail in the course of his business, and exercises investment discretion over $100 million or more in Section 13 (f) securities must report its holdings with the SEC.

The holdings that must be reported include equities traded on exchanges, options and warrants. The 13F form has to be filed within 45 days of the end of the quarter.

While Moreno says iBillionaire is accurate, institutional money managers file their 13Fs for the previous quarter, so the retail investor is not looking at an exact replica of the current portfolio.

Despite the inherent delay, Internet sites like insidermonkey.com examine the holdings of top hedge funds and notable investor, which disclose long-equity positions as of the end of the previous quarter. So if you click on this link, insidermoney.com is telling the reader, here are five stocks that Appaloosa Management's David Tepper reported a large holding in. You can also see the top holdings of other billionaire hedge fund luminaries – David Einhorn of Greenlight Capital, Jim Simons of Renaissance Technologies, T. Boone Pickens of Pp and Ken Griffin of Citadel.

CNBC reporters kept pointing out that the holdings are not updated, and so they're not accurate. In response, iBillionaire founder Moreno, defended his methodology. "We take the holding history and we see that they have outperformed the S&P throughout history. We're actually tracking long-term investors."

One CNBC commentator noted that Moreno follows Warren Buffet's portfolio, which is a slower moving. Moreno notes that Buffet has been buying the stock of Wells Fargo for about ten years. But again, CNBC's David Faber jumps in, "But there are some hedge fund managers that move a lot quicker than Mr. Buffet does and they can change their holding from the filing date."

In a premium service, iBillionaire is bringing in push notifications that can provide updates in the billionaire's holdings. It shows the average price and whether the billionaire paid more or less than the average price. Again, Faber noted,, it doesn't mean Buffet paid the average price.

So while iBillionaire is quite educational in bringing the billionaire investor holdings to a mobile device, it seems a bit misleading to suggest that everyone can become a billionaire.

Perhaps I am taking this too seriously. The real purpose of the app is to emulate the billionaires' portfolios and to fuel dreams of becoming a billionaire.

In the future, the company has plans to launch an index and partner with a bank. So don't be surprised if iBillionaire launches a billionaire index of the top stock picks from Buffet, Icahn, Tepper, Grifin, for investors to emulate. Then there will be derivatives on the billionaire index. The sky's the limit!

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio
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