Buying What the Big Winners Buy

HAVE YOU ever heard of a 13D filing? No, it is not something that you would find in a dentist's office or on a clerk's desk. It is one of those obscure government reports that might give you a clue to making some money in the stock market.

For that clue, recall what Damon Runyon used to say: "If you rub up against money long enough, some of it might rub up against you." Some of it might rub off on you if you follow the purchases of the handful of billionaire investors who make audacious bids in the stock market to take over whole companies. Their names are often in the headlines, names like Robert Bass, Marvin Davis and others.

Quite a few smaller investors closely study this smart money group. One who does is Kiril Sokoloff, publisher of the newsletter Street Smart Investing, In a five year survey completed in June 1983, he measured the investment results of 150 of these big capitalists and found that of nearly 300 stocks in which they took major positions, 95% rose in price. Sokoloff maintains the study's conclusions are still valid today.

You can follow the trades of these large investors fairly easily. Many of their deals are a matter of public record because of the size of their purchases. By law, any investor who acquires more than 5% of a company's shares must report that transaction to the Securities and Exchange Commission within ten days on a form called 13D. The SEC publishes a daily summary of these so called 13D filings in the SEC News Digest, which you can study at the SEC's public reference rooms in Chicago, New York and Washington, D.C., as well as at libraries of universities with strong business departments. Or for a fee, you can get this information more conveniently from several computer services and investment newsletters. In addition to Street Smart Investing (Southeast Executive Park, 100 Executive Drive, Brewster, New York 10509), newsletters include SEC Today (665 15th Street, NW, Washington, D.C. 20005; $390 the first year, $375 thereafter); and Special Situation Report and Stock Market Forecast (P.O. Box 167, Rochester, New York 14601; $230 a year).