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Hedge Fund Education Center

How to Best Use Insider Monkey To Increase Your Returns

by Meena Krishnamsetty

Insider Monkey’s investment approach is pretty simple. We don’t have the research budgets of hedge funds nor the kind of privileged information that insiders get. However, we achieve better returns by imitating the best stock picks of best hedge fund managers and insiders.

Academic research has shown that imitating certain stock picks of corporate insiders managed to outperform index funds by about 7 percentage points per year (see more details here). You can track insider transactions in real-time or get free email alerts by creating an account on our site. Insider trading data and email alerts are all free on Insider Monkey. You can go to ticker pages of each company that you’d like to receive email alerts and subscribe. If you enter your email address below, you can get free email alerts when an insider buys/sells Apple shares, or whenever a hedge fund files a 13G or 13D regarding Apple, or whenever we publish an article about Apple.

Follow Apple Inc. (NASDAQ:AAPL)

Imitating insider transactions historically is a good strategy but our research has shown that imitating hedge funds’ certain transactions has been more profitable.

For example hedge funds’ top 15 small-cap ideas that are heavily shorted by other hedge funds underperformed the market by more than 27 percentage points annually between 2015 and 2017.

In May 2014 we launched our best performing hedge funds strategy. This strategy’s stock picks returned 78.4% since the inception of our strategy and beat the SPY by 18 percentage points. Please keep in mind that large-cap indices outperformed small-cap indices as well as our original small-cap strategy during this period. You need to subscribe to our premium quarterly newsletter to find out the latest stock picks of this strategy.

You don’t need to become a premium subscriber to take advantage of hedge funds’ stock picks though. Our research team is led by Dr. Ian Dogan who is an expert on insider trading and quantitative investing. We publish samples of his research on our site too. For example, in 2013 (in the 4th issue of our monthly newsletter) we analyzed the performance of Seth Klarman’s historical 13F filings. Our research has shown that the best way to imitate Seth Klarman is by buying his micro cap stock picks (market caps less than $1 billion). These stocks outperformed the market by 160 basis points per month between 1999 and 2016. Please note that we also shared the list of these stocks in real time between 2014 and 2016 and these stocks outperformed the market by more than 100 percentage points. Subscribe below to our free daily newsletter to get email notifications whenever Dr. Dogan publishes an article.

You can also follow the billionaires and other successful hedge fund managers by signing up for our free email alerts service that sends email notifications whenever we publish a report or an article about their purchases and sales. For example you can subscribe to Seth Klarman and Baupost related alerts below:

Follow Seth Klarman's Baupost Group

If you watch business channels or read financial newspapers or websites, you’d notice that everyone predominantly talks about large-cap stocks. Our research has shown that it is very difficult to outperform the market by a meaningful margin if you are investing in large-cap stocks. This means you won’t be able to make any money or increase your returns by reading articles about large-cap stocks like Apple, Microsoft, Citigroup, Google, etc. We analyzed billionaire hedge fund managers’ historical stock picks. These people manage hundreds of billions of dollars and take anywhere from 30% to 80% of the returns that they generate as fees (read the details here). They have every incentive to pick the best large-cap stocks and they can spend millions of dollars researching these stocks, yet the 30 most popular large-cap stocks among hedge funds actually underperformed the S&P 500 Total Return Index by an average of 6 basis points per month between 1999 and 2016 (less than 1 percentage point per year). If these billionaire hedge fund managers’ large-cap picks can’t beat the market by a meaningful margin, you probably can’t beat the market by investing in large-cap stocks.

The good news is that hedge funds’ and insiders’ small-cap picks historically outperformed the market by a very large margin. Insider Monkey is the best website to track these funds’ and insiders’ move and we aim to provide as many free services as possible.

If you have the time to do your own research then sign up for email alerts and check out our insider trading screener. Don’t forget the fact that small-cap stocks is probably the best place to look for great investment ideas. Check back our site frequently because we are adding more free services every month.

Who are we?

Insider Monkey is one of the fastest growing financial research websites on the web, read by 1.5 million people every month.

Our research is headed by Ian Dogan who is a former fund manager, holding a Ph.D. in the field. We partnered with Marketwatch and created the Marketwatch/Insider Monkey Billionaire Hedge Fund Index.

Our content has appeared on:

The Wall Street Journal Marketwatch The Motley Fool Seeking Alpha The Street NASDAQ
Testimonials
  • I've been an Insider Monkey subscriber for a couple years now and the flagship strategy is one of the best strategies in my portfolio. Because the strategy is small cap you will see some major short term swings, but if you can follow the strategy and rebalance only once every quarter you will see some really strong results once you hit the 12 month time frame and beyond.
    David L.
  • I initially became aware of Insider Monkey when Meena was interviewed on Business News Network (BNN) in Canada. The idea of mimicking the best ideas from the best fund managers was appealing (as I have met many smart managers on Bay Street in Toronto). While I have only had the newsletter for one year, the Insider Monkey allocation has been the best performer in my equity portfolio. I look forward to continued outperformance in the future.
    G. Chin
    Toronto, Canada
  • I first came across Insider Monkey (IM) nine quarters ago (1/2013) and since then have enjoyed exceptional returns. Last year (3/2014) I traveled to NYC to meet the founder because I was thinking about doubling down on their strategy. I left favourably impressed and proceeded. It was a smart move. At the beginning of this year I decided to double down again. There are no guarantees but preliminary results are promising.

    Why do I recommend IM?
    1. It's easy: 15 picks every 90 days. Most picks are repeated at least once, some more than eight times.
    2. It's flexible: if a pick goes bad you only hold it for 90 days.
    3. Time saving: the IM team vets hundreds of HF SEC reports every 90 days and produces a list of 15 SC picks from the best stock pickers in the world. A world-class research department for less than a dollar a day.
    4. It works. Need I say more?

    One admonishment: have faith in the model, hold all 15 picks for ninety days.
    Tommy
  • I want to thank you and the team for the great results this past year. Many of my friends and colleagues use profesional financial advisors and annually pay 1% to 1.5% of their portfolio value for mediocre results. Insider Monkey's performance is outstanding for a mere fraction of the cost. I am an analyst for a utility and have always wanted to invest in high growth small cap stocks, but I have never had the time, expertise or access to the information needed to effectively research them, and was never comfortable with casual stock recommendations from magazines, blogs, and television. I had never subscribed to a premium publication but was immediately impressed with the Insider Monkey team’s analysis and the proven results of the 15 Stock Small Cap Strategy.

    Keep up the great work. Thus far, the Insider Monkey team’s approach has enhanced my investment portfolio and I look forward to future issues and following the team’s investment strategy throughout the foreseeable future.
    Jim T.
    New York