The stock market is so hot that I'm struggling to wrap my mind around the numbers. As of this writing, the Nasdaq Composite Index (^IXIC -1.49%) is up 30% in 2024. This is much more than the usual gain. And it might have some investors worried that the Nasdaq index is too hot and due for a pullback in 2025.

There's good reason to tap the brakes on those fears. According to MacroTrends, the Nasdaq Composite Index has gone up by 30% or more in 13 other years since 1972 (the index's first full year). In the year following a 30% or greater gain, the Nasdaq has gone up 11 out of 13 times -- that's a whopping 85% of the time.

In other words, rather than being overheated, history says that the Nasdaq could post additional gains in 2025.

Billionaire investors Warren Buffett and Bill Ackman certainly stand to benefit if that's true. Buffett oversees Berkshire Hathaway whereas Ackman is in charge of Pershing Square, both of which have valuable portfolios of stock investments. And both have multibillion-dollar investments in Nasdaq stocks heading into the new year.

Buffett's most valuable Nasdaq stock position is Apple (AAPL -1.32%). Ackman's is Alphabet (GOOG -1.55%) (GOOGL -1.45%). Since history says that the Nasdaq probably will rise in 2025, should investors align themselves with these successful billionaires and buy shares of Apple and Alphabet?

Not so fast.

What investors need to know about billionaires and historical patterns

As successful as they are, investors still shouldn't expect Buffett or Ackman to always make perfect investment decisions. For example, Ackman's firm sold Netflix stock in 2022 and the shares have more than tripled since then. For its part, Buffett's Berkshire sold Snowflake earlier this year and it's outperformed the S&P 500 since then.

And both billionaire investors have also bought stocks that have lost value in the past.

In short, blindly following the investments of others, even successful billionaires, isn't a sure-fire winning strategy.

Moreover, while it's true that history points to more gains with the Nasdaq in 2025, it's occasionally broken the pattern in the past, which means it could again. In other words, 2024's 30% gain points to more gains in 2025. But it wouldn't be unprecedented if the Nasdaq Composite Index, and key index constituents such as Apple and Alphabet, dropped next year.

What investors should do instead

Billionaires do have an investing problem: They have so much money that moving the needle in terms of returns is difficult. They have to take huge positions, which limits their investing universe to large companies. For this reason, regular investors have more investing options.

For example, in my neck of the woods, Take 5 car washes and oil change shops are all over, putting Driven Brands on my radar. With a market cap of only $2.6 billion, I doubt it will ever land in Buffett's portfolio or Ackman's -- it's too small. But I believe it can outperform the S&P 500 during the next three years or so. Investors should be on the lookout for opportunities such as these instead of only looking for ideas in other people's portfolios.

Consider that Berkshire Hathaway invested in Apple stock in 2016 when it was faster-growing and the stock was cheaper. To be sure, the company is still great -- it has more than 50% market share in the U.S. for the smartphones, which suggests it has a competitive brand moat. But its net sales only rose 2% in its fiscal 2024 (which ended in September) and its growth outlook remains tepid, meaning it might not be the ideal investment opportunity today.

Alphabet stock could be much more appealing. The company is still the dominant player in online search as well as streaming video with its YouTube platform. Its cloud computing business is growing fast and is very profitable with a 17% operating margin. And finally, it has opportunities to be the leader in emerging trends such as autonomous vehicles with Waymo, quantum computing, and more.

The takeaway here is not to buy Alphabet stock, although there is a valid argument for doing so. The broader implication from these observations is investors don't know what's going to happen next year and billionaire investors can be wrong. Therefore, nobody should invest in things that they don't understand as if there isn't any risk at all.

Exploring the investments that Buffett or Ackman make isn't necessarily a bad idea. It just needs to be done responsibly.