The Buffett Effect Is Real for Some Guru Investors

Following the new stock picks of the most recognizable investors is a profitable strategy. When famous investors disclose new positions, the stocks they buy go up. Furthermore, a recent study by researchers at the University of Gdansk and the University of Southern California found that the stocks’ excess risk-adjusted returns did not reverse after the initial 30-day period following the disclosure of the new investments.

Those researchers call this the Buffett effect. The name is a reference to the fact that Warren Buffett’s followers have a history of tracking disclosures of Berkshire Hathaway Inc.’s (BRK.B) portfolio changes. The latest example of this was yesterday’s 41.2% jump in shares of Bending Spoons S.p.A. (BSP) following the news that Berkshire Hathaway has taken a 4% stake in the company via a private placement. (Bending Spoons sold shares directly to Berkshire Hathaway.)

The existence of the Buffett effect was determined after the researchers looked at the portfolios of 24 recognizable investment firms, including hedge funds and holding companies like Berkshire Hathaway, over the period of 2000 to 2025. All were discretionary funds. A discretionary fund is an actively managed fund where the manager makes buy and sell decisions without needing approval from investors for each trade.

Five funds qualified as “high recognition” based on Wikipedia page views and news mentions: Buffett’s Berkshire Hathaway, Carl Icahn’s Ichan Enterprises L.P. (IEP), Michael Burry’s Scion Asset Management, Bill Ackman’s Pershing Square Holdings Ltd. and Nelson Peltz’s Trian Fund Management L.P. Two in the broader recognizable group that didn’t clear the high-recognition threshold were David Tepper’s Appaloosa Management L.P. and David Einhorn’s Greenlight Capital Inc.

Each new position disclosed in Form 13F—a regulatory filing required by the U.S. Securities and Exchange Commission (SEC)—was tracked to determine how the market reacted. Performance was measured not only on the day of the disclosure but also afterward.

(Form 13F must be filed within 45 days of the end of a calendar quarter. It lists all Section 13(f) securities—publicly traded stocks, closed-end funds, convertible debt, etc.—the number of shares owned and the value of those shares at the end of the quarter.)

Here is what the researchers found:

• When any recognized investor disclosed a new position, the stock earned a risk-adjusted return premium of 0.25% over the filing day and the next trading day relative to a control fund. The control funds were discretionary funds that have no significant public recognition.
• When one of the five high-recognition investors made the disclosure, the premium relative to a control fund jumped to 1.42% over the same two-day window—and grew to 3.09% at the 20-day mark.
• For Berkshire Hathaway disclosures alone, the two-day premium reached 1.87%.
• The excess returns didn’t reverse within the 30 trading days measured by the study. “The high-recognition disclosure produces a lasting revaluation of the stock rather than a temporary surge of buying,” observed the researchers.

Not every recognized investor’s disclosures were associated with higher returns. Most notably, Icahn was the only one of the five high-recognition investors whose disclosed new positions didn’t generate risk-adjusted return premiums. Removing Icahn from the sample strengthened the measured high-recognition premium. The researchers don’t speculate on why this might be, but one plausible explanation is that Icahn’s activist investing style—frequently involving public campaigns, proxy fights and large preexisting stakes—may reduce the surprise value of his Form 13F filings.

Five-Day Performance of Recognized Investors’ Stock Picks

Each dot represents one of 24 recognizable investment firms. The more recognized investors (represented by the red dots on the right) generally saw stronger returns on their disclosed stock picks.

Source: “The Buffett Effect,” by Pawel Robert Smolinski and Siddharth Saridevi; SSRN, October 9, 2026.

The quarterly deadline for Form 13F filings creates a lag between when a discretionary fund manager adds a new position and when they disclose it. For example, Berkshire Hathaway’s portfolio changes won’t be released until November, including changes made in July. (Bending Spoons, not Berkshire Hathaway, announced the private placement yesterday.)

Following every disclosed trade also generates turnover and takes time. The strategy used by the researchers requires monitoring for Form 13F filings, acting quickly on new disclosures and holding positions long enough to capture the accumulating premium, which the study measured over the 30 trading days following a disclosure.

Global X Guru ETF (GURU) tracks the top stock holdings from what it describes as some of the largest, most sophisticated hedge funds in the world. This exchange-traded fund (ETF) is lightly traded, with average daily trading volume of approximately 1,000 shares per day. It also has a pricey expense ratio of 0.75%.

Long-term investors can use Form 13F disclosures as a source of ideas, to see where recognized investors who make concentrated bets are allocating. Long-term investors focus on the disclosed companies whose current valuations discount their future potential.

AAII members who want to do their own stock selection can use the AAII Stock Screens. Many of these screens are based on the philosophies of successful guru investors, including Buffett.