Following billionaires > following Reddit

Hey, it’s Garrett. 

While traders were piling into bloated AI stocks this summer, I was quietly tracking something else entirely: where billionaires were actually putting their money.

The result? 

A 41% winner on XHB (housing ETF) from $85 to $120 over the past few months. Not flashy. Not trendy. Just following the breadcrumbs that institutional money leaves behind.

Here's exactly how I do it—and why there are still opportunities sitting right in front of you.

The 13F Gold Mine Everyone Ignores

A few months back, I spent an entire week diving deep into 13F filings—quarterly reports that big investors must file showing their stock positions. 

Yeah, I know, sounds about as exciting as watching paint dry. 

But here's what caught my attention: while everyone was obsessing over AI plays, the smart money was quietly loading up on housing stocks.

The filings told a clear story. These aren't real-time—there's a 45-day delay, which most people see as a weakness. 

I see it as signal filtering. By the time institutions file, they're not chasing momentum. They're positioning for what they see coming 6-12 months out.

And what they saw was obvious: rate cuts were inevitable, and housing would be the primary beneficiary.

The System That Found the Trade

My screening process is straightforward but most people won't do the work:

Quality Filter: Companies with strong financials using the F-Score system—a 9-point checklist measuring things like profitability and debt management. I want scores of 7 or higher, meaning the business is genuinely healthy.

Value Filter: Stocks trading below their intrinsic value using Graham Score metrics (inspired by Warren Buffett's mentor). A score of 0.8 or lower means the company is likely undervalued by the market.

Momentum Trigger: Breaking above the 20-day moving average—a trend line that smooths out recent price action. This ensures I'm not buying into a downtrend.

Liquidity Floor: $500M market cap minimum so I can actually get in and out without moving the stock price.

When I ran this screen back in June, housing names kept appearing. That's when I started digging into those 13F filings and found institutions weren't just buying—they were loading up.

What the Smart Money Saw Coming

The institutions weren't just betting on rate cuts. They were positioning for a specific type of economic environment:

Private sector credit markets were already seizing up. Banks didn't want to hold risk anymore—they were originating loans just to pass them off to private equity. 

Very European in nature. When nobody wants to take risk, you get accommodation.

The Fed was clearly behind the curve. By the time cuts came, they'd be playing catch-up to economic reality.

Housing stocks would benefit first and most directly from this accommodation cycle.

The Current Opportunity

Here's where it gets interesting: the system is showing me two housing names that still have room to run.

Taylor Morrison (TMHC): $7 billion company with an F-Score of 8.5 (excellent financial health) and Graham Score at 0.68 (signaling another 10-15% upside potential). Currently trading around $69.

TriPoint Homes (TPH): $3.25 billion company with similar quality metrics, trading at $37 with potential to reach $45.

Both show strong fundamentals: their EV/EBITDA ratios (what you're paying versus actual cash earnings) sit under 8, which signals cheapness in today's market. Price-to-cash flow ratios around 8.25 are reasonable, especially with potential consolidation coming in 2026.

Why This Works When Other Systems Fail

Most traders chase what's moving today. Institutions position for what's moving tomorrow.

The 13F system forces you to think like capital allocators, not day traders. These people aren't trying to flip stocks in a week. They're identifying structural shifts months in advance.

The beauty is the lag time. By the time retail notices institutional positioning, you've already had 2-3 months to position alongside them at better prices.

What to Watch Next Week

CPI comes out Wednesday. 

If we get a weak print, expect that 50 basis point cut probability to jump from 10% to 20-25%. Housing stocks will likely see another leg up.

But remember: institutional money already positioned for this outcome months ago. They're not waiting for the data to confirm what they already know.

The 13F system isn't about timing markets perfectly. It's about identifying where the smart money is positioning and getting there before the crowd notices.

Sometimes the best trades are hiding in plain sight—in SEC filings that most people are too lazy to read.

I’ll be live with you tomorrow at 8:45 AM ET. 

Click here to RSVP. 

Stay Positive,

Garrett Baldwin