RE-POST KTS #20: Insider Whales
Originally published on Blossom on April 30th, 2024
Please find retrospective commentary at the end.
What TIMING? Today we add an ultimate tool to our kit just in TIME for its first use. I love TIMING. Think hammer/screwdriver - because this is one to use quarterly in our double-digit annualized return mission.
For those new/fairly new to this series, I ask that you re-read KTS #11 and KTS #19 before proceeding. We learned that 78% of the trading volume is performed by INSIDERS (Institutional + company insiders as defined by KTS #11). INSIDERS are the market makers - and we as INVESTORS accept we can’t beat ALL INSIDERS, but we can beat MOST INSIDERS and nearly all INVESTORS. We also learn in this series that we listen, read, and TIME markets following early INVESTORS movements. We don’t buy stocks in perpetual declining patterns or sideways for-who-knows-how-long patterns (KTS #10). Hope is not a successful investment strategy despite being the most popular one. When the fundamentals, the technicals, and the INSIDERS activity align, we come in and ride that surf.
So hammer time – let’s go! In KTS #19, we identified a tool to watch INSIDERS (1) & (2), officers/directors. Today, we target the WHALES of INSIDERS, (3) the Institutions, Hedge/Mutual funds, etc.
So how do you monitor their buys/sells – after all, these guys aren’t just buying 50,000 shares. They accumulate positions over weeks in the hundreds of thousands to multi-million shares in a company. Quick fact: they will use ALL investment vehicles available to build a position of their targeted size to do it. That’s options, preferred stock, open market stock, warrants, convertible derivatives, etc. AND THEY WILL DO THEIR BEST TO ACCUMULATE THE SHARES WITHOUT INVESTORS BEING ABLE TO DETECT THEM. Because, if INVESTORS catch on, they will not be able to build the profitable position size. The wolves fight among themselves… and certainly any other species (INVESTORS) to rip every piece of meat off the carcass and chase them away until they're finished. And being nocturnal, they attempt to go completely unnoticed while the INVESTORS are sleeping.
But, by law, these WHALES have to report their holdings (for each stock, the number of shares they own) by 6 weeks after the quarter ends. So 4x a year. So when do you think most all of these whales file the form if they don’t want you to catch on? That’s right - THE VERY LAST DAY THEY HAVE TO IN ORDER TO COMPLY WITH THE LAW! So once March ends (1Q), 6 weeks later puts us at the 2nd Friday of May. 2Q - June 30 + 6 weeks = 2nd Friday of August. 3Q is then Friday of the 2nd week of November. 4Q is the 2nd Friday of February. The weekend right after these come out are major homework weekends, if you really want to outperform the market and realize ridiculous profits.
This SEC form (13-HR/13F) at the SEC EDGAR site is filled with all kinds of nuggets. And I give you this hammer as an investment housing warming gift. Shown above, we are coming up on a big release by all of the funds on May 10th (some actually file on Thursday just to make sure they beat compliance). So you have time to get ready. Ok, so I know what to look for and when to look for it. But which funds should I look at? And how do you do it?
Here’s some pointers:
Find an ACTIVELY MANAGED FUND THAT HAS A HISTORICAL DOUBLE-DIGIT ANNUALIZED RETURN, and start there.
We know mutual funds, ETFs, and hedge funds are dilutive-by-design investment vehicles. If these fund managers are realizing 15% annualized returns, then you know some stocks are the workhorses that are carrying all the weight of the underperformers, such that when all securities in the fund are averaged together, it brings the collective fund performance DOWN to the 15% annualized return in our example above.
So if we just track these successful INSIDER WHALES - and instead of buying their fund - just buy the gross outperforming stocks within their fund that carry all of their underperforming stocks (baggage) and still beat the S&P500, then we will absolutely kill the S&P500. Get it?
You can go find a find right now, and download its last 8 (or even more if so inclined) FORM 13-HRs (2 years, 1 per quarter, right?). And you can see them building positions into stocks before it shows up in the market. Then, when these breakout technically, we pile in with our measly 500 shares.
Amazing, huh? Didn’t I tell you this Knowledge Transfer Series gives you some amazing meat? You will learn all kinds of insight about stocks, markets, and cycles here – we are just getting started. You will learn why the market behaves like it does around these releases too.
I have been successfully using this method for over 25 years with amazing results. We are humans and we have brains - so let’s use them against the humans that don’t use them (Conventionalist indexers).
As INVESTORS that share the vast ocean waters with these INSIDERS, we are either plankton or barnacles to these whales - choose barnacle and ride along.
Retrospective commentary - October 17th 2026
This is another great re-read. The first paragraph is golden and very, very relevant right now. Read it a 2nd TIME to make sure it is ingrained in the membrane:
“For those new/fairly new to this series, I ask that you re-read KTS #11 and KTS #19 before proceeding. We learned that 78% of the trading volume is performed by INSIDERS (Institutional + company insiders as defined by KTS #11). INSIDERS are the market makers - and we as INVESTORS accept we can’t beat ALL INSIDERS, but we can beat MOST INSIDERS and nearly all INVESTORS. We also learn in this series that we listen, read, and TIME markets following early INVESTORS movements. We don’t buy stocks in perpetual declining patterns or sideways for-who-knows-how-long patterns (KTS #10). Hope is not a successful investment strategy despite being the most popular one. When the fundamentals, the technicals, and the INSIDERS activity align, we come in and ride that surf.”
We recently published our study of over 10 13Fs for the second quarter. Released on August 17th, it gave us AMAZING insight into which ocean currents the whales are currently following.
Here’s an excerpt from our analysis, published as KTS #113:
“ [...] But who do you align with? The whales. 🐋🐳
Because they move the markets. And the only thing you really care about is price movements over TIME. Did you get that? I’ll say it again. The only thing you really care about is price movements over TIME. Simple as that. So attaching yourself like a barnacle to a whale is how to generate outsized returns over TIME…..because the WHALES (institutions) have pools of capital to deploy into equities. They move markets.
So why do we do it? 🤔
Two reasons:
(1) A phenomenal place to identify potential stock candidates to invest in for outsized returns. 🤑
AND
(2) A tool to forecast where the market is headed. 😃
Those seem like good reasons to do it, right? 🤣😂 Now you know why Beskar hasn’t missed a single opportunity to observe these whale events over the last 31 years! 🤑🤑🤑
[...]
Today, we get to go directly to the insight. 🫡 Why? Because this is a critical TIME in the real estate/banking crisis cycle. The age of chaos and volatility is here and whales can help guide us through the choppy waters.
[...]
Whales are constantly making moves. Albeit slow moves. Whales are huge beasts – they don’t turn 180 degrees like a predator shark in the water. No, the whales take a long TIME to change in such a direction.
[...]
So realize that whales typically scale INTO positions. And then the scale OUT OF positions. And this process typically takes many, many quarters …….even years to complete. A slow turning mammal indeed.
[...]
The important thing to understand is that we can watch the whales in their environment by tracking them. And we get clues throughout the year.
The great news for you? As a Beskar Capital member? We do the number crunching…..and the analysis for you! 😎🏖️🌴🏄♀️🌊🏄♂️🌊🏄🌊🐚🐳🐋
It is a massive undertaking as there are several nuances in processing and visualizing these datasets from all of the whales we follow. And the whales play tricks on you. They purposely change equity listing spellings to throw off any key field database joins or relates.
In other words, they don’t want you to follow them!!! 😂🤣
And most we don’t want to follow most of them anyway. 🤔🤓🧠
What? After all of that explanation. We don’t want to follow most whales?
That’s right.
You see. The secret to Beskar’s approach is to hone in on the whales that have ……….”
That’s all for Blossom/X 🤣 If you want to see which whales Beskar Capital follows and what insights Beskar Capital gleaned from them, a membership is probably your best option…. So what are you waiting for?
Natural selection is alive and well.
I always give you my best! 🏆
This is the Way! 🏄🌊
