Who are some of the best investors in the world and in history and what made them successful?
In this article, we'll discuss their investment strategies, key traits they exhibited while making investments, the advice they offered to fellow investors, and highlight their most famous or well-known investments. Let's dive in with a look at George Soros.
George Soros is often considered one of the most accomplished investors in history. He initially began his career in finance in London but later moved to the USA where he worked at F.M. Mayer as an arbitrator and subsequently as a financial analyst at Wertheim & Co.
George Soros' investment strategy
George Soros is known for his expertise in bonds and currencies. He made a name for himself by analysing economic trends in countries and leveraging them to profit from high-level debt investments.
He's famously associated with ‘Black Wednesday,' when he shorted the British pound, leading to the Bank of England's bankruptcy. Soros's Quantum fund has achieved some of the highest profits in history on multiple occasions.
Warren Buffett is another renowned investor who started with just $100 in 1954 and grew his wealth significantly over time through investments, primarily with Berkshire Hathaway.
Warren Buffett's investment strategy
Buffett believes in the predictability and stability of large companies, emphasising high profitability and cash flow. His advice to investors is to think like future owners and thoroughly understand the businesses they invest in. Buffett's preferred strategy is long-term investments, and one of his most famous investments was in Coca-Cola. He is also known for investing in the media, insurance, and consumer goods sectors.
Best books by Warren Buffett
Despite being one of the most quoted investors in finance books, Warren Buffett has not written any book, although he has inspired many authors, who have analysed his investment strategies in books like “The Essays of Warren Buffett”.
Benjamin Graham was an influential economist and great investor. He was a teacher and mentor of Warren Buffet.
Benjamin Graham's investment strategy
Benjamin Graham is considered the pioneer of value investing, a strategy focusing on analysing a company's financial status to determine its intrinsic value. Graham recommends buying stocks below their Price-to-Earnings (PER) and book value, as these represent lower-risk investments.
Best books by Benjamin Graham
If we have to choose among his many published books, we would go with “The Intelligent Investor”, considered by many as the investor's bible; the book explores how to avoid strategy mistakes and how to develop a long-term plan to buy stocks, following Graham's own steps.
Peter Lynch, recognised as one of the world's top fund managers, managed the Fidelity Magellan fund and achieved impressive annual returns for 13 years, outperforming indices and other funds.
Peter Lynch's investment strategy
Lynch advises investors to invest in what they know and emphasises conducting thorough research on companies before investing. His investment style focuses on growth and recovery, with his best-known investment being King World Productions.
Best books by Peter Lynch
One of his most famous books, undoubtedly, is “One Up on Wall Street” in which he describes his investment strategies and gives advice to investors. According to the author himself, it is easier for individual investors to beat the market than fund managers.
Philip Arthur Fisher
Philip Arthur Fisher, founder of Fisher & Co in 1931, specialised in growing technology companies and large companies at fair prices.
Philip A. Fisher's investment strategy
Philip A. Fisher is often referred to as the father of growth investing, a strategy centred on investing in companies with significant growth potential for the long term. Fisher looked for companies with high profit margins, strong returns on capital, and commitment to research and development. His best investment was in Motorola in 1955, which used to manufacture radios back then.
John Templeton, a pioneering global investor, used fundamental analysis to achieve substantial returns. His main strategy involved buying cheap and selling high – which generated consistent returns during World War II. In 1954, he created the Templeton fund, whose strategy was focused on globalisation and diversification.
John Templeton's investment strategy
John Templeton's most notable investment was in Japan during the 1960s, and he also made significant global market investments in Russia and China. He was recognised as the “best stock picker of the 20th century worldwide” by Money magazine.
Carl Icahn, born in 1936, is a well-known advocate and practitioner of corporate activism. One of his most notable and controversial actions was a hostile takeover attempt on the airline TWA. He is widely acknowledged as one of the most successful proponents of value investing.
Carl Icahn's investment strategy
What sets Carl Icahn apart from other investors is his commitment to investing in undervalued companies, particularly those whose stock prices have suffered due to poor management. This approach has proven attractive and lucrative for him. Icahn's wealth is so substantial that he is included in Forbes' list of the world's wealthiest individuals, with a net worth exceeding $18 billion.
Icahn's strategy goes beyond seeking good returns; he actively engages with the companies he invests in. He often joins their boards of directors, working to effect changes in leadership and management. His goal is to install individuals who can lead these companies to greater success—a practice not commonly followed by all investors.
While Joel Greenblatt may not be as widely recognised as some other investors, his track record speaks for itself. Born in 1957, he has achieved remarkable profitability as an investor. Some even argue that there are few investors in history who have consistently delivered returns on their portfolios as Greenblatt has over a 16-year period with an impressive average return of 30.8% through his Gotham Funds.
Joel Greenblatt's investment strategy
For a deeper understanding of Joel Greenblatt's investment approach, one can turn to his book, “The Little Book That Beats the Market.” In this book, Greenblatt outlines the methodology investors should employ when venturing into the stock market. He explains a formula that hinges on two key factors for outperforming the market and attaining favorable returns:
- EV/EBIT (Enterprise Value to Earnings Before Interest and Taxes)
- ROIC (Return on Invested Capital)
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In conclusion, the world of investing has been shaped by a diverse array of remarkable individuals, each with their unique strategies and philosophies. From George Soros to Warren Buffett, these investors have left a mark on the investment world. Their stories and strategies continue to inspire and educate investors, making them enduring figures in the history of finance.
Who is considered the best investor of all time?
While opinions vary, Warren Buffett is often regarded as one of the greatest investors in history. His consistent success and long-term approach have earned him this reputation.
What is the key principle of Benjamin Graham's value investing strategy?
Benjamin Graham's value investing principle centres on buying stocks of companies when they are undervalued compared to their intrinsic value. This approach emphasises a thorough analysis of financials and seeking stocks trading below their perceived worth.
How did George Soros become famous as an investor?
George Soros gained fame through his ability to speculate on currencies and bonds based on his analysis of macroeconomic trends. His shorting of the British pound on ‘Black Wednesday,' which led to the Bank of England's bankruptcy, is one of his most renowned investments.