Investing in the stock market has great potential to grow your savings.
We believe it can be very interesting to take an in-depth look at some of the best investors in our modern time. These are legendary investors who were able to make significant amounts of money by following their investment strategies and philosophies. Most of those strategies aren’t difficult or complex, in fact, they stick to the basic financial rules and search for the real value of other companies. They invest if they believe there is value, and they make profits from it!
We all want to know how the top investors got to where they are now and hope we can learn and imitate their strategies to pave our way to financial freedom. Maybe some of us will never reach that high level of success but that doesn’t mean it should stop us to inspire by the world’s top investors.
- Age 90, CEO of Berkshire Hataway
- Assets under management: $700 billion
“If you aren’t thinking about owning a stock for 10 years, don’t even think about owning it for 10 minutes.”
Warren Buffet is a name you probably heard before and he is easily recognized as the modern world’s most successful investor. His investment advice is simple: Look for high-quality companies with a strong management team and a ‘large moat’ for a low price.
Prior to his foundation of Berkshire Hataway company, his previous job was earning him $12,000 per year. He managed to save around $174,000 before investing in Berkshire Hataway, turning that initial amount into more than $80 billion today.
Buffet’s investment philosophy is simple. He buys companies for a low price, improving their management and realizing profits at the stock price, also known as value investing. Many criticized him for avoiding tech companies and other industries, but he invests only in companies that he understands and always sticks to his plans.
Check out his biography: The Snowball: Warren Buffett and the Business of Life
- Age 77, Cofounder of PIMCO
- Assets under management: $1.75 trillion
“Do you really like a particular stock? Put 10% or so of your portfolio on it. Make the idea count … Good investment ideas should not be diversified away into meaningless oblivion.”
Bill Gross is another legendary investor on our list. He is considered by many the “king of bonds”.
He is the co-founder and leading manager of PIMCO and he is worth $2.5 billion. His philosophy is keeping a diversified portfolio of stocks with a long-term outlook is essential while he believes that emotional trading is one of the biggest enemies of an investor and it could easily derail your investment strategy.
- Age: 77, Managed Fidelity Investments
- Assets Under Management (AUM): $2.4 trillion
“Your investor’s edge is not something you get from Wall Street experts. It’s something you already have. You can outperform the experts if you use your edge by investing in companies or industries you already understand.”
Lynch is well known for his time as a fund manager at Fidelity Investments where he managed to grow his assets under management from $20 million to $14 billion, beating the S&P for 11 years out of 13 with an average annual return of 29%. He is now worth more than $352 million and he is best knows for his ability to quickly change and adapt his investment strategy and style depending on the market conditions. Same as Warren Buffett and Bill Gross, Lynch has the same basic principles. He is focusing on long-term investments and only invests in companies he understands.
- Age: 68, former Chief Investing Officer of Legg Mason Capital Management
- Assets Under Management (AUM): $752.3 billion
“Value investing means really asking what are the best values, and not assuming that because something looks expensive that it is, or assuming that because a stock is down in price and trades at low multiples that it is a bargain”
Back in 1999, Bill Miller was named the “Fund Manager of the Decade” by Morningstar.com.
For more than 15 years in a row, between 1991 and 2006, his company, Legg Mason Value Trust, beat the S&P500’s yearly returns by far allowing him to grow his assets under management from $750 million to more than $20 billion until 2006. He tends to be a value investor but firmly believes that any stock can have the potential to be a value stock if it can be bought at a discount.
- Age 90, CEO of Quantum Fund
He is known as the man who “broke the Bank of England” because he risked on a single trade more than $10 billion by shorting the British Pound. His trade was a winner and he managed to make over $1 billion in a single day and more than $2 billion in total. His investment company, Quantum Fund, was generating an average annual return of more than 30% when he was the lead manager.
Unlike the other legendary investors on our list, Soros is known for not having a clearly defined strategy but more of a speculative strategy.
“I don’t want a lot of good investments; I want a few outstanding ones.”
His career spanned over the course of more than 70 years and he was widely successful. He was known for looking for high-quality growth stocks and long-term investing. By doing extended and well-documented research, he chose his stocks carefully based on growth orientation, high-profit margins, sales growth, and excellent products or services. Instead of over diversifying into multiple stocks. He believes that you should not over diversify but rather pick a few well-researched stocks to invest in.
“In takeovers, the metaphor is war. The secret is reserves. You must have reserves stretched way out ahead. You have to know that you could buy the company and not be stretched.”
Age: 85, Founder of Icahn Enterprises
Assets Under Management (AUM): $33.3 billion
Carl Icahn, the founder of Icahn Enterprises, is a private equity investor that is known as a cold capitalist and shareholder activist. The strategy he applied over the course of his 30 years career greatly differs from the other investors on our list and it’s very hard to compete with. He buys large amounts of a company’s stock in order to obtain voting rights and then uses his position to make decisions that will have a high impact on the company’s stock prices. Despite his huge success, that is not a strategy that can be easily applied by other investors.