Why You Should Think Twice Before Mimicking the Investments of Billionaires Like Warren Buffett

Would you invest in a stock just because Warren Buffett did? And would you pay to invest in a fund that tracks his publicly accessible portfolio? A growing crop of new exchange-traded funds (ETFs) is betting you will.

VistaShares recently filed to launch funds that track the public filings of elite investors like Buffett, Bill Ackman, Stanley Druckenmiller, and Michael Burry. The idea? Let everyday investors “copy” the billionaires—without needing billions.

But beneath the buzz lies a fundamental question: Is mimicking legendary investors actually a smart strategy, or is it just expensive fanfare?

The Billionaire Copycat Promise

The pitch is simple: What if you could own the same stocks as the world’s most famous investors? VistaShares’ new ETFs, based on 13F filings, aim to do just that. Each fund tracks the top holdings of a specific hedge fund or investor, like Buffett’s Berkshire Hathaway or Ackman’s Pershing Square.

To some retail investors, this may sound like a shortcut to a professional-level strategy. But experts are skeptical.

“These ETFs are a gimmick,” said Noah Damsky, founder of Marina Wealth Advisors. “They scrape publicly available data and package it into an ETF. It’s not thoughtful; it’s just copying what other investors do.”

Even if a billionaire bought a stock, that doesn’t mean it makes sense for your timeline, risk tolerance, or goals. “Copying others is usually a bad bet,” Damsky said. “If your wealthy neighbor buys a new Ferrari, it doesn’t mean you should.”

What You’re Actually Getting (Spoiler: Not Much)

So why exactly should you be careful? These ETFs are based entirely on public 13F disclosures—forms that large investors file with the U.S. Securities and Exchange Commission (SEC) every quarter. But these only show long equity positions. If a billionaire is hedging their bets with shorts or options—or has already reversed course—you’ll never know.

“It can be impossible to understand intent,” Damsky said. “To base your investments on lagged information can be catastrophic.”

Aside from technical flaws, there’s also a personal disconnect. Investors trying to copy billionaires often overlook the differences in time horizon, conviction, and emotional resilience between them and ultrarich investors.

“The risk tolerance is likely the most significant gap,” said Kevin Feig, founder of Walk You to Wealth. “Ultimately, your portfolio needs to be aligned with your risk tolerance, financial goals, and personal beliefs.” This makes it potentially dangerous to follow someone else without doing thorough research.

You should also be mindful of the fund’s fees and how they compare to more traditional investments. “If you are paying approximately 1% for this ETF, then it needs to outperform by at least 1% to be worth it compared to low- or no-cost index funds,” Feig said.

The Timing Problem No ETF Can Solve

The key issue with attempting to mimic investments based on 13F reports is that they can be filed up to 45 days after the quarter’s end, which can seriously reduce their usefulness.

“You may be entering a position that a billionaire has already exited,” Feig said. This can be particularly bad if you’re not mimicking an investor who focuses on long-term investments and therefore may have been trying to time the market.

The Bottom Line

Want to learn from billionaires? Start with their principles, not their portfolios. Instead of copying trades from outdated filings, understand how great investors think—and apply that discipline to your own strategy.

“Learn how they do things and try to replicate that,” Damsky said. “If you want to be a great basketball player like LeBron James, follow his strict, disciplined approach. Do the same with investing.”