Get rich by thinking like the smartest guys in the room November 24, 2015 Archives | Unsubscribe Here's How to Spy on the Market's Biggest Movers and Shakers... Get rich by thinking like the smartest guys in the room Riding coattails for double-digit gains Plus: A terrible make-or-break indicator Greg Guenthner coming to you from Baltimore, MD... Having a rough year? Quit whining, you pansy. At least you're not Bill Ackman… The legendary activist investor's Pershing Square Holdings portfolio has lost roughly 25% this year. Big Boy Bill has made some bad bets recently, most notably Valeant Pharmaceuticals—which has dropped from more than $240 per share to less than $100 in a matter of weeks. It's always fun to mock the big fish when they're losing. But guys like Bill Ackman didn't become billionaires by accident. These hedge fund sharks are, for the most part, ruthless geniuses. Most of the time, they win. And they win big… Wouldn't you like to ride their coattails to victory? Of course you would. You'd be a damned fool not to. So today we're taking a look at some of the most popular stocks among the smartest guys in the room. And riding their coattails will allow you to rack up some impressive gains… These hedge fund hotels, as they're commonly known, are all recognizable large-cap stocks. But a few of the names will probably surprise you. Let's dive in… First, let's talk about the rejects. These are the stocks that hedge funds are predominantly selling. Topping this list, according to FactSet, are AT&T and Apple shares. Funds dumped $3.2 billion worth of AT&T during the third quarter, FactSet reports. "The top 50 funds also removed large chunks of Apple from the aggregate portfolio," FactSet says. "The iPhone maker saw aggregate sales amounting to $1.2 billion in Q3. Discovery Capital Management, Citadel Advisors, D.E. Shaw Group, Millennium Management, EgertonCapital, and Coatue Management all contributed to the decline, as each sold more than $100 million worth of stock in Q3." In fairness to both AT&T and Apple, neither of these stocks are spiraling lower. But both have failed to get anywhere close to their summer highs during the market's recent recovery. I'm sure all those funds dumping shares during the third quarter had something to do with it… But enough with these scorned ex-girlfriends of the hedge fund world. What are the pros buying? For starters, they're plunging headfirst back into healthcare stocks. FactSet notes that the top 50 hedge funds bought a whopping $16.3 billion worth of stock in the health care sector during the third quarter. That's a lot of pharma stocks that took hits during the market's slide earlier this year. That includes names like Teva Pharmaceutical and Allergan. Note that both of these names are performing better than the recently dumped AT&T and Apple positions year-to-date. There's still plenty of work to be done. But big money buying the third quarter dip is helping these stocks regain their footing as we draw closer to the end of the year. Sincerely, Greg Guenthner  [Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner] "Easiest Way to Make $1,000 Extra per Month" "It will basically show you how you could make hundreds of dollars each Tuesday morning, simply by pushing a few buttons in your brokerage account". But you have to hurry, because this page will be taken down Tuesday at midnight. To see this amazing (and simple!) moneymaking method, click here before this page disappears. Rude Numbers When to Buy... When to Sell 62% of all stocks trading on major U.S. exchanges are currently below their respective 200-day moving averages... $42.36 buys a barrel of crude today. Oil is sneaking higher this morning. It's up about 1.5% to start the trading day... $2.26 is the price of natural gas right now. Natty is giving back all of yesterday's gains. It's down more than 3% in early trading... $1,073 is where you'll find gold futures this morning. The yellow metal is perking up today. It's up about $6 so far... 2,073 marks the spot for S&P futures just before the morning bell. Stocks are set to open in the red today... Rude Trends When to Buy... When to Sell "While this may be a great investment, I don't trust anything with a forward P/E ratio such as this stock has," a reader says. Since you didn't tell me what stock you're talking about, let's focus on forward P/E. Mainly, what the heck are you doing using it as the go-to indicator for your investments? I have nothing against fundamental analysis. But choosing a company's estimated forward earnings as your make or break indicator can't be a good idea. At least go with some actual data instead of a guess that could (and will) change when you least expect it. Amazon sports a forward P/E of about 120 right now. The stock is up 118% year-to-date. Still a bad investment? I didn't think so… Ignore At Your Own Peril Today's Must Read Links Governments Around the World Are Already Preparing for This Collapse Does the Fed Want to Black List this Currency? >> Fits in Your Pocket, Deadly as a Gun, Allowed on a Plane... Add rude@agorafinancial.com to your address book: Whitelist us Additional Articles & Commentary: Daily Reckoning Website Join the conversation! Follow us on social media: The Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Agora Financial delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from The Rude Awakening, click here. 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