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Learn from this investor’s $100m mistake

In 2010, a Grammy-winning artist passed on investing $200K in an emerging real estate disruptor. That stake could be worth $100+ million today.

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Six Billionaire Stock Picks That Could Outpace the Market

When the smartest money on Wall Street moves, savvy investors take notice. The latest 13F filings from legendary fund managers reveal compelling opportunities that could deliver exceptional returns in an uncertain market environment.

Every quarter, the investment world's attention turns to 13F filings - mandatory disclosures that reveal what billionaire fund managers are buying and selling. These documents offer a rare glimpse into the strategies of Warren Buffett, Bill Ackman, Michael Burry, Howard Marks, and Mohnish Pabrai - investors whose track records have made them household names in financial circles.

The latest filings for Q2 2025 reveal six standout picks that represent a diverse mix of sectors and investment philosophies. From Buffett's methodical value approach to Burry's contrarian bets, these stocks showcase different paths to potential outperformance.

Warren Buffett's Housing Play: Lennar Corporation (LEN)

The Oracle of Omaha has placed a significant bet on America's housing recovery through Lennar Corporation, one of the nation's largest homebuilders. This investment exemplifies Buffett's preference for businesses with enduring fundamentals and essential products.marketbeat+1

The Investment Thesis

Lennar operates in high-growth markets across the Sunbelt states, integrating the entire value chain from land acquisition to construction. This full-stack control provides margin protection and pricing flexibility - exactly the kind of operational advantage Buffett seeks in his investments.finance.yahoo

The company's positioning benefits from America's chronic housing shortage, particularly in entry-level and mid-tier segments. With new household formation continuing and existing inventory remaining constrained, Lennar stands to benefit from structural supply-demand imbalances.finance.yahoo

Financial Strength

Recent financial results demonstrate both resilience and adaptability. For Q2 2025, Lennar reported:

• Revenue: $8.4 billion, with a 2% increase in home deliveries to 20,131 homeswebull+1

• Net earnings: $477 million or $1.81 per share, though down from $3.45 per share in Q2 2024webull

• New orders: Increased 6% to 22,601 homesfinance.yahoo

• Gross margin: Maintained at 17.8% despite market pressuresfinance.yahoo

What makes Lennar particularly attractive is its ultra-conservative balance sheet. The company maintains net cash position with $5.4 billion in total liquidity, giving it flexibility to weather economic downturns while competitors struggle with leverage.finance.yahoo

Valuation Appeal

Trading at just 10.7 times trailing earnings and 7.4 times EV/EBITDA, Lennar offers compelling value metrics for a company generating consistent free cash flow. The stock has declined 12.4% since the start of 2024, creating an entry point that aligns with Buffett's patient, long-term approach.finance.yahoo

Bill Ackman's Tech Giant: Amazon (AMZN)

Pershing Square's addition of 5.82 million Amazon shares represents a calculated bet on the e-commerce giant's profitability inflection. This marks a significant evolution in Ackman's typically concentrated portfolio strategy.ainvest+1

The Transformation Story

Amazon's recent financial performance showcases the operational leverage that likely attracted Ackman's attention. The company has undergone a dramatic shift from growth-at-all-costs to disciplined profitability:

• Free cash flow swing: From burning $17 billion in 2022 to generating $32.88 billion in 2024money.usnews

• AWS leadership: The cloud division generated $30.87 billion in Q2 2025 revenue, maintaining its market-leading positionmoney.usnews

• AI positioning: Strategic investments in infrastructure and Anthropic partnership position AWS for continued growthtikr

Valuation and Growth Balance

While Amazon trades at 35.2 times trailing earnings, its growth metrics justify the premium. The company has demonstrated:

• Revenue CAGR: 21.5% over the past decade

• Forward EPS growth: Expected to grow 17.0% over the next two yearsvaluesider

• Diversified moats: Prime membership, AWS dominance, and logistics network create multiple competitive advantages

Amazon's ability to generate over $115 billion in annual operating cash flow while maintaining growth investments across AI, advertising, and logistics makes it a compelling long-term holding for patient investors.

Michael Burry's Contrarian Bet: Lululemon (LULU)

The "Big Short" investor's new position in Lululemon represents a classic contrarian play on a high-quality brand trading at distressed valuations. Burry acquired 50,000 shares worth $11.9 million, making it a top holding in his concentrated portfolio.valuesider+1

The Value Opportunity

Lululemon's stock has been decimated, falling 50% in 2025 amid concerns about North American growth and competitive pressures. This dramatic selloff has created what appears to be a significant value opportunity:ainvest

• Valuation: Trading at just 15 times trailing earnings, well below historical averagesvaluesider

• Financial strength: Maintains 59.3% gross margins and 16.8% net marginsvaluesider

• Balance sheet: Net cash position of $48 million provides financial flexibility

Quality Metrics

Despite the stock's struggles, Lululemon's underlying business quality remains intact:

• Return on Equity: 38.1% over five years

• Return on Assets: 22.3%

• Revenue growth: From $4.4 billion in 2021 to $10.6 billion in 2025valuesider

The company's brand loyalty and pricing power in premium activewear suggest the current weakness may be temporary, creating the type of asymmetric opportunity Burry typically exploits.

Howard Marks' Defensive Play: Barrick Gold (GOLD)

Oaktree Capital's position in Barrick Gold reflects Howard Marks' focus on defensive value during uncertain times. As one of the world's largest gold producers, Barrick offers both inflation protection and operational leverage.gainify+1

Strong Operational Performance

Barrick's recent results demonstrate improving operational efficiency:

• Q1 2025 results: Net earnings per share up 59% year-over-year to $0.27finance.yahoo

• Cash generation: Operating cash flow of $1.2 billion, up 59%finance.yahoo

• Production: Gold production at top end of guidance with improving costsfinance.yahoo

Strategic Positioning

The company benefits from several tailwinds:

• Rising gold prices: Average realized price of $2,898 per ounce in Q1, up 40% year-over-yearfinance.yahoo

• Portfolio optimization: Focus on Tier One assets with expansion projects underwayvaluesider

• Shareholder returns: Maintaining $0.10 quarterly dividend while repurchasing sharesfinance.yahoo

Valuation Discount

Trading at 14.9 times earnings and 7.0 times EV/EBITDA, Barrick offers exposure to gold at reasonable valuations. The company's projection of 30% production growth by 2030 provides a clear pathway for value creation.valuesider

Mohnish Pabrai's Energy Turnaround: Valaris (VAL)

Dalal Street's 31.96% increase in Valaris shares represents a bold bet on the offshore drilling recovery. This investment exemplifies Pabrai's strategy of buying distressed cyclical businesses at inflection points.stockcircle+1

Operational Recovery

Valaris has demonstrated impressive turnaround momentum:

• Revenue growth: Up 33% year-over-year to $2.36 billion in 2024

• EBITDA surge: More than doubled from $254.4 million to $577.1 millionhedgefollow

• Q2 2025 performance: Total revenues of $615 million with 96% revenue efficiencytikr

Market Position

The company's strategic advantages include:

• Fleet quality: 12 of 13 drillships are seventh-generation units, commanding 25% higher day rateshedgefollow

• Contract backlog: Over $4.7 billion in total backlog provides revenue visibilitytikr

• Market timing: Positioned for deepwater project sanctioning growth in 2026-2027hedgefollow

Financial Improvement

Valaris has strengthened its balance sheet while maintaining growth investments:

• Debt management: Net debt at manageable $799 millionhedgefollow

• Cash generation: $120 million in operating cash flow for Q2 2025tikr

• Guidance raise: Adjusted EBITDA guidance increased to $565-605 million for 2025hedgefollow

The Consensus Pick: UnitedHealth Group (UNH)

Both Warren Buffett and Michael Burry hold significant positions in UnitedHealth, despite their vastly different investment styles. This convergence suggests compelling value in America's largest healthcare company.valuesider+1

Defensive Growth Profile

UnitedHealth combines the stability of essential services with consistent growth:

• Revenue scale: $400.28 billion in annual revenue with 11.3% compound annual growth rate over five yearsdataroma

• Market leadership: Serves 50 million people with expanding market sharedataroma

• Diversification: UnitedHealthcare insurance combined with Optum services creates multiple revenue streamsdataroma

Recent Challenges Create Opportunity

The stock has faced near-term headwinds that may have created the entry point both investors found attractive:

• Q2 2025 results: Earnings of $3.74 per share, down from prior year but within guidancedataroma+1

• Valuation: Trading at 11.7 times trailing earnings, below many healthcare peersdataroma

• Cash generation: $20.7 billion in free cash flow supports dividends and growth investments

Long-term Outlook

Management guidance suggests a path back to growth:

• 2025 outlook: Revenue guidance of $445.5-448.0 billion with earnings recovery expecteddataroma

• 2026 expectations: Return to earnings growth as operational improvements take effectquiverquant

Investment Implications and Risk Considerations

These six stocks represent different approaches to value creation, from Buffett's long-term compounding to Burry's deep value contrarian bets. However, each investment carries specific risks that investors must consider:

Cyclical Exposure: Lennar, Barrick, and Valaris are sensitive to economic cycles, interest rates, and commodity prices. Competition Pressure: Amazon faces intense competition in cloud services from Microsoft and Google, while Lululemon confronts growing athleisure competition. Regulatory Risk: UnitedHealth operates in a heavily regulated industry with ongoing policy uncertainties.

The key insight from these billionaire moves is the importance of patience and conviction. Each of these investors built their reputations by taking positions when others were selling, holding through volatility, and allowing fundamental value to compound over time.

For individual investors, these picks offer a roadmap for navigating uncertain markets through a combination of defensive positioning, value opportunities, and exposure to long-term growth themes. The convergence of these investment legends on quality businesses trading at reasonable prices provides a compelling blueprint for building wealth through market cycles.

As always, investors should conduct their own due diligence and consider their risk tolerance before making investment decisions. However, when some of the world's most successful investors are buying, it's worth paying attention to their reasoning and the opportunities they've identified in today's complex market environment.

Important Disclaimer

This article is for informational and educational purposes only and should not be considered as personalized investment advice, financial guidance, or a recommendation to buy, sell, or hold any securities mentioned.

Investment Risks

All investments carry inherent risks, including the potential for significant loss of principal. Past performance does not guarantee future results. The stocks discussed in this article may experience substantial volatility, and their values can fluctuate significantly based on market conditions, economic factors, and company-specific developments.

No Guarantee of Returns

The analysis of billionaire investor positions is based on publicly available 13F filings, which may not reflect current holdings and do not include complete portfolio information. These filings show positions as of specific dates and may not represent the investors' current views or strategies. There is no guarantee that following or mimicking these investment strategies will result in profitable returns.

Individual Circumstances

Every investor's financial situation, risk tolerance, investment objectives, and time horizon are unique. What may be appropriate for institutional investors with significant resources and diversified portfolios may not be suitable for individual investors. Before making any investment decisions, you should:

• Assess your own financial situation and investment objectives

• Consider your risk tolerance and investment timeline

• Evaluate how any investment fits within your overall portfolio

• Consult with qualified financial professionals if needed

Market Volatility

Financial markets are subject to significant volatility and unpredictable events. Economic conditions, regulatory changes, geopolitical events, and other factors can materially impact investment performance. The companies mentioned face industry-specific risks that could adversely affect their business operations and stock prices.

Due Diligence Required

This article does not constitute a complete analysis of any investment opportunity. Investors should conduct their own thorough research, including reviewing company financial statements, SEC filings, and other relevant materials before making investment decisions.

No Professional Relationship

The author and publisher do not have a professional relationship with readers and are not acting as investment advisors, financial planners, or fiduciaries. This content should not replace professional financial advice tailored to your specific circumstances.

Forward-Looking Statements

This article contains forward-looking statements and projections that are inherently uncertain and subject to change. Actual results may differ materially from those discussed or implied.

By reading this article, you acknowledge that you understand these risks and limitations and that any investment decisions you make are solely your own responsibility.