Who were the biggest investors in history? What have they done to claim the title of the best investors of all time? What can we learn from their skills, their ideas, and their past?
Throughout history, many successful investors tried to beat the market with a unique perspective and investment philosophy. They have all sought to increase their capital returns through their interpretation of the markets. Some have even invented new and innovative ways to analyze their investments, while others have achieved their success almost entirely by instinct.
If you want to make money on the stock market, you must learn how to invest. The best way to learn about a particular topic is to follow the steps of the best, who have already proven that their investment strategies work (and very well, because they have generated billions) in a very sustainable way.
The best investors limit stock market losses and maximize profits. Let’s take a look at how they do it.
Here’s a list of the best investors of all time:
Graham is an excellent financial educator and investment manager. He is also known as the mentor and teacher of Warren Buffet. He is considered the father of value investing and security analysis, which has earned him the title of the most influential figure of the 20th century. Thanks to his investment strategies based on the financial analysis of companies to invest in the stock market, he managed to earn a lot of money for himself and his family as well as for his clients.
Graham believed that in fundamental analysis and looked for companies with strong balance sheets as well as those with above-average margins, little debt, and ample cash flow. In addition, the main idea about his value investing is that the total worth of any investment should be significantly more than what an investor has to pay for it.
Templeton created the modern investment funds we know today and did so in a very interesting way. He bought shares of the 40 companies that were trading below $1 on the NYSE at that time with a total investment of $10,400. In the next four years, most of these companies went bankrupt, but John Templeton managed to sell the remaining portion of his investment for $40,000. In 1992, he sold his Templeton funds to the Franklin Group.
John Templeton discovered the power of diversification to earn more from his investments. He was named the greatest stock picker of the century by the Money Magazine in 1999 and was knighted by Queen Elizabeth II as a reward for his amazing accomplishments.
Thomas Rowe Price, Jr.
Thomas Rowe Price Jr. is known as “the father of growth investing.” Known for the funds that are named after him, Price has made himself one of the world’s leading fund managers. Originally an investor in economic growth, Price moved to a more value-driven strategy and began to invest heavily in commodities and energy. He instructs investors to focus on industry leaders, companies with excellent management, and strong research and development. Fundamental research, process, discipline, and consistency became the basics of his prosperous investing career.
In 1964, John Neff joined the Wellington Management Co. where he was the portfolio manager of the company for more than 30 years. Neff was a value investor and adopted a simple investment strategy that consists of focusing on companies with low P/E ratio and strong dividend. He always preferred investing in well-known industries through indirect paths. Also, during the 31 years he ran the Windsor Fund, Neff earned a return of 13.7% against the 10.6% for the S&P 500 over the same period.
Livermore didn’t have formal education or experience in stock trading. He self-made himself by learning from his winners and losers. For many years, he learned through his success and failures, which helped him with enhancing his trading skills and eventually creating excellent trading ideas that still exist in the market today.
During his early teens, he started trading for himself, and by the age of fifteen, he succeeded in gaining profits of more than $1,000, which was a large sum at that time. Then, during the next several years, he generated high revenues through betting against “bucket shops,” which were the companies that offered investors the opportunity to trade shares without owning them.
Peter Lynch‘s fame comes from his experience in managing the Fidelity Magellan Fund between 1977 and 1990. Under his control, the company went from having $20 million of assets to over $14 billion. A capital magnet that during his 13 years at the helm of the investment fund managed to beat the S&P 500 by 11%, with an annual return close to 30%.
Even more, Peter Lynch is often referred as a “chameleon” since he used to adapt to whatever investment style worked at that time. But still, he followed a cautious investment strategy where he used to pick specific stocks which he knew and could understand.
Better known as the man who overthrew the Bank of England in 1992, Soros made most of his fortune by gambling down $10 billion against the English bank, giving him a profit of $1 billion in just one night. As an investor, he was a short-term speculator. He used to make big bets on the financial markets’ directions.
In 1973, Soros founded the hedge fund company of Soros Fund Management that ultimately evolved into Quantum Fund.
With an investment style based on macroeconomic trends, he has generated very profitable gains; above 15% per year for 35 years. He even succeeded in making profits of more than 100% on two occasions. George Soros continues to operate actively in the stock markets, and his contributions are always highly valued by investors.
Warren Buffett, currently the fifth richest man in the world, approached the stock market at the age of 16 in the mid-40s. Warren Buffet’s biography reveals that it was in 1956 when serious things began. He moved to his hometown of Omaha, Nebraska, and gradually bought the shares of the Berkshire Hathaway Group.
He initially started with a textile company, then he eventually acquired an insurance company, then another, then another.
Investing like Warren Buffet means only focusing on undervalued or under-listed companies with particular expertise. He focuses on niche companies, which might not be very profitable, and gives them the means to get to the top. The investment style is very simple: buying companies at low prices, improving them through management, and aiming to make long-term improvements in stock prices.
Today, the value of a single Berkshire Hathaway share is over $120,000. When the S&P 500 index lost 33%, Berkshire Hathaway’s stock only lost 13%. Between 1965 and 2007, Warren Buffet’s stock market portfolio grew by an average of 21.1% per year. One of the best tips we can take from Buffet is to think like a potential owner and stay firmly attached to the companies you invest in.
John (Jack) Bogle
John Bogle is the founder of The Vanguard Group mutual fund company, one of the world’s largest fund sponsors. He has succeeded in investing in the stock market in a simple way without any complicated strategies. Bogle excelled in the no-load mutual fund and defended low-cost index investing for millions of investors. In 1976, he created the Vanguard 500, the first index fund of the history.
Jack Bogle adopted a unique investing philosophy which consists of capturing market returns through broad-based index mutual fund, which are defined as low-cost, no-load, passively managed, and low-turnover.
Carl Icahn is primarily known as a ruthless “corporate raider” for leading a hostile takeover bid on the TWA airline in 1985, but others see him as a leader in corporate activism (“shareholder activism”). Some people consider Icahn as a value investor since he usually invests in undervalued companies. However, he only invests in undervalued companies if he perceives that they are underpriced due to mismanagement. His strategy is commonly known as the “Icahn Lift.”
William H. Gross (Bill Gross)
Commonly known as the “king of bonds,” Gross is one of the most leading bond fund managers in the world. He is the co-founder of the investment management company PIMCO, which is currently tone of the largest mutual funds worldwide.
In 1996, Bill Gross was the first portfolio manager to induct into the Fixed-Income Analyst Society Incorporation hall of fame thanks to his helpful contributions to the development of portfolio analysis and bond.
If you are interested in investing in the stock market in a profitable and sustainable way in the long term, it is recommended that you learn more about the different investment strategies mentioned above (value investing, dividends, currency market, long term, etc.) before you start investing, since certain approaches will be more adapted to your investment profile than others.