These are all the people who made significant amounts of money by sticking to sound investment philosophies. If you also look at their strategies, they are not very difficult or complex: they stick to the basic finances of a company and seek value. If they believe there is value, they invest and make good profits!
These investors differ widely in the strategies and philosophies they applied to their operations; some devised new and innovative ways to analyze their investments, while others chose stocks almost entirely on instinct. Where these investors do not differ is in their ability to constantly beat the market.
Ben Graham stood out as an investment manager and financial educator. He was the author, among other works, of two classics of investment of incomparable importance. He is also universally recognized as the father of two fundamental investment disciplines: security analysis and value investing. The essence of Graham’s value investment is that any investment should be worth substantially more than what an investor has to pay for it. He believed in fundamental analysis and looked for companies with solid balance sheets, or those with little debt, above-average profit margins and ample cash flow.
Thomas Rowe Price Jr.
Thomas Rowe Price Jr. is considered “the father of growth investment”. He spent his formative years struggling with the Depression, and the lesson he learned was not to run out of stocks but to embrace them. Price viewed financial markets as cyclical. As a “public opponent”, he decided to invest in good long-term companies, which was virtually unknown at this time. His investment philosophy was that investors should focus more on selecting long-term individual securities. Discipline, process, consistency, and fundamental research became the foundation of his successful investment career.
Carl Icahn is a fierce activist investor who uses ownership positions in public companies to force change to increase the value of his shares. Icahn began his corporate foray activities in earnest in the late 1970s and reached the big leagues with his hostile acquisition of TWA in 1985. Icahn is famous for the “Icahn Elevator.” This is the Wall Street catchphrase that describes the upward spike in a company’s stock price that usually occurs when Carl Icahn starts buying the shares of a company he thinks is mismanaged.
John (Jack) Bogle
Bogle founded the Vanguard Group mutual fund company in 1974 and made it one of the largest and most respected fund sponsors in the world. Bogle pioneered the no-load mutual fund and championed investing in low-cost indices for millions of investors. He created and introduced the first index fund, Vanguard 500, in 1976. Jack Bogle’s investment philosophy advocates capturing market returns by investing in broad-based index mutual funds that are characterized as no-load, low-cost, low-turnover and passively managed.
One of the main opponents of the last century, John Templeton is said to have “bought little during the Depression, sold a lot during the Internet boom, and made more than a few good calls.” Templeton created some of the largest and most successful international investment funds in the world. He sold his Templeton funds in 1992 to the Franklin Group. In 1999, Money magazine called him “arguably the world’s best stock picker of the century.” As a naturalized British citizen living in the Bahamas, Templeton was knighted by Queen Elizabeth II for her many accomplishments.
Neff joined Wellington Management Co. in 1964 and remained with the company for over 30 years, managing three of its funds. His preferred investment tactic was to invest in popular industries through indirect paths, and he was considered a value investor as he focused on companies with low P / E ratios and strong dividend yields. He led the Windsor Fund for 31 years (ending in 1995) and returned 13.7%, compared to 10.6% for the S&P 500 during the same time period. This equates to a return of more than 55 times the initial investment made in 1964.
Known as the “Oracle of Omaha,” Warren Buffett is viewed as one of the most successful investors in history. Following the principles established by Benjamin Graham, he has accumulated a multi-million dollar fortune primarily through the purchase of stocks and companies through Berkshire Hathaway. Those who invested $ 10,000 in Berkshire Hathaway in 1965 are today above the $ 50 million mark. Buffett’s investment style of discipline, patience, and value has consistently outperformed the market for decades.
Jesse Livermore had no formal education or experience in stock trading. He was a self-made man who learned from both his winners and his losers. It was these successes and failures that helped cement the business ideas that can still be found throughout the market today. Livermore started trading for himself in his early teens, and by the age of fifteen, he had reportedly produced profits of more than $ 1,000, which was great money in those days. During the following years, he made money by betting against so-called “cube shops”, which did not handle legitimate exchanges: customers were betting against the house by movements in stock prices.
Peter Lynch managed the Fidelity Magellan Fund from 1977 to 1990, during which the fund’s assets grew from $ 20 million to $ 14 billion. More importantly, Lynch reportedly outperformed the benchmark S&P 500 index in 11 of those 13 years, achieving an average annual return of 29%. Often described as a “chameleon,” Peter Lynch adapted to whatever style of investing worked at the time. But when it came to choosing specific actions, Peter Lynch stuck to what he knew and / or could easily understand.
George Soros was a master at translating general economic trends into highly leveraged and murderous plays on bonds and coins. As an investor, Soros was a short-term speculator, making big bets in the directions of the financial markets. In 1973 George Soros founded the hedge fund company of Soros Fund Management, which eventually became the well-known and respected Quantum Fund. For nearly two decades, he ran this aggressive and successful hedge fund, reportedly racking up earnings of over 30% per year and, on two occasions, posting annual earnings of over 100%.
William H. Gross
Considered the “king of bonds,” Bill Gross is the world’s leading bond fund manager. As the founder and managing director of the PIMCO family of bond funds, he and his team have more than $ 600 billion in fixed-income assets under management. In 1996, Gross was the first portfolio manager to be inducted into the Society of Fixed Income Analysts Inc. hall of fame for his contributions to the advancement of portfolio and bond analysis.
The bottom line
As any seasoned investor knows, forging your own path and producing long-term returns that outperform the market is no easy feat. As such, it is easy to see how these investors made a place for themselves in financial history.