Do billionaires of a feather flock together? Not necessarily. Warren Buffett and David Tepper serve as good examples.
Both men rank among the wealthiest people in the world, with Buffett's net worth around $146 billion and Tepper's net worth topping $21 billion. Both are long-term investors who sometimes take contrarian positions.
But these two billionaires aren't attracted to the same stocks very often. Buffett's Berkshire Hathaway portfolio includes 41 holdings. Tepper's Appaloosa Management hedge fund has 37 holdings. However, Buffett and Tepper own only one stock in common.
Before I reveal which lone stock is in both Berkshire Hathaway's and Appaloosa Management's portfolios, I must acknowledge something that isn't readily apparent. Technically, Buffett and Tepper own three of the same stocks. However, two of those stocks come with an asterisk beside their names.
To explain the situation, let's review some corporate history. In 1995, General Re acquired New England Asset Management (NEAM). Around three years later, Berkshire Hathaway acquired General Re. Why is this important? Because NEAM still has its own investment portfolio that's separate from Berkshire's.
NEAM's holdings include Microsoft and Qualcomm. Both tech stocks are also in Tepper's Appaloosa portfolio. Buffett doesn't manage NEAM's investments but indirectly owns shares of Microsoft and Qualcomm.
While these two stocks warrant an asterisk beside their names, another stock deserves two asterisks. NEAM owns Google parent Alphabet's Class A shares. Tepper doesn't own the Class A shares but does own Alphabet's Class C shares, which trade under a different ticker. In this case, Buffett, indirectly, and Tepper, directly, are invested in the same company, although not the same stock.
What's the one stock that's a common denominator in Buffett's and Tepper's holdings that doesn't require a special explanation? Amazon (NASDAQ: AMZN).
Berkshire Hathaway first bought Amazon stock in the first quarter of 2019. Buffett subsequently revealed that the decision to buy Amazon was made by one of his two investment managers. However, Buffett has liked Amazon and its founder Jeff Bezos for years.
He no doubt approved of the purchase. The legendary investor has even expressed regret in the past for not buying Amazon stock sooner.
Interestingly, Tepper also initiated a new position in Amazon in the first quarter of 2019. Unlike Buffett, he has never been hesitant about buying high-flying growth stocks.