So you’re looking to get rich! Who isn’t?
A private cruise across the Amalfi coast, court side seats at the next Lakers game or a big house with acres of land….We hear you!
Here at WSS, we believe that one of the best ways to grow your money is to INVEST it! You work hard for your money, why shouldn’t your money work hard for you. However, people here the word ‘INVEST’ and they panic. It’s often thought of as something difficult and complicated where magical formulas and crazy calculations come together to create the ultimate investing strategy that few understand.
Investing for the first time doesn’t have to be rocket science.
The best investors in the world use simple common sense approaches that have been making them money for years. Each has a simple systematic approach that they’ve stuck too over the years (except Peter Lynch; Lynch changes his style with the times). In fact, their philosophies and investment styles may surprise new investors.
These names are synonymous with success and are heralded by many as the…
World’s Top 12 Investors:
1. John Tempelton
Taking the premise of buy low and sell high to the extreme, John Templeton, one of the most famous investors took risks on companies others would have shied away from.
In 1939, John borrowed money and boldly invested in 100 companies, most of which were on the brink of bankruptcy. However, He exercised some caution by never spending more than one hundred dollars per share. His bold moves paid off and he ended up selling all but four of the companies for a substantial profit. He followed this investment strategy throughout his career, often picking stocks that were widely ignored by other brokers and turning small investments into millions of dollars.This Strategy helped Templeton become an extremely successful investor. He was a savvy networker, using his contacts on Wall Street to gain valuable investment data, which he later would use to analyze his own portfolio.
In the 60s, Templeton moved to the Bahamas where he became a naturalized British Citizen and in light of his financial and philanthropic endeavours, Queen Elizabeth II knighted him. Who knew investing could lead to knighthood….sign us up! He died in 2008, but Sir John Templeton’s legacy lives on through his philanthropy and his foundation, which awards millions of dollars each year in scholarships and grants.
To learn more about how John Templeton's lived his life, check out his book Templeton Plan: 21 Steps to Personal Finance And Real Happiness.
Invest like John Templeton:
- Buy low and sell high
- Pay attention to the companies that others investors ignore
- Be bold
2. Philip Fisher
Often taking the approach of buy and hold, Philip Fisher was known throughout the industry as the Father of Growth Investments. In 1955 he strategically purchased shares of Motorola stock, which he saw to be a high potential growth company. Fisher still owned shares when he died in 2004…..talk about commitment.
He theorized that in order to be a successful investor, it was best to not over diversify but rather know a few companies and know them well. Fisher was a witty networker, using his contacts to gain as much information about a company as possible, validating his investment moves.
Fisher penned several book on his investment strategies including the first investment book, Common Stocks and Uncommon Profits, to ever to make the New York Times Best Seller’s List. Much of his work is still studied today by investment professionals, including his 15 points to look for in common stocks.
Invest like Philip Fisher:
- Invest in companies that have the potential to grow
- Invest for the long term
- Information is key
- Less is more
3. Warren Buffett:
The name Warren Buffett is one of the most well known names in finance. His name always appears on the top of lists touting the world’s richest and most philanthropic, solidifying his place as one of the top investors in the world.
To his investment colleagues he is known as the “Oracle” or “Sage” of Omaha and has long been thought of as one of the most successful investors in history. Despite his $39 billion fortune, he is known for his frugal lifestyle, which transcends into his business practices. His philosophy is simple and stems around two rules:
- Don’t lose money
- Don’t forget rule number one
Buffet maintains his role at the helm of Berkshire Hathaway, the holdings company, which he turned from a floundering textile company into the successful conglomerate it is today. He has pledged to donate 99% of his fortune to charity either during his life or upon his death.
Invest like Warren Buffet:
- Simply put, don't lose money!
4. Benjamin Graham
Recognized by his peers and those within the investing industry as the father of security analysis and value investing, Benjamin Graham’s ‘common-sense’ approach was much more than mere common sense. His primary philosophy stemmed around the principle that investments should only be made if they are worth substantially more than they cost. Coining the phrase, “margin of safety,” Graham sought out companies that had little debt, above-average profit margins and substantial cash flow. He was cognizant of the market’s volatility and was able to use that knowledge in order to turn a profit. He new that fluctuations in the market are inevitable and can be advantageous by buying when there is a bargain to be had (i.e a strong company, performed weak in the market) and selling when the holdings are overvalued. Graham often used the analogy Mr. Market, an imaginary partner to every investor, to illustrate the movement in the market.
Graham died in 1976 but is still heralded by many as a leader in modern investing. He authored two of the most famous investment books of all times, Security Analysis and The Intelligent Investor.
Invest like Benjamin Graham:
- Only buy when there is a certainty that the company is worth more than its cost
- Sell when the company is overvalued
- Know that the market is constantly fluctuating
5. Peter Lynch
When it comes to successful business investors, Peter Lynch is second to none. Over the course of 13 years, Lynch managed the Fidelity Magellan fund whose assets grew from $20 million to $14 billion. Like a chameleon, his investment strategy adapts to suit the nature of the asset.
Lynch, the quintessential workaholic, had a philosophy that if followed, could enable new investors to out-perform Wall Street. DO YOUR DUE DILIGENCE! After extensive and thorough research, Lynch would only invest in stocks he understood. As an investor, he was knowledgeable about the market and its volatility. He avoided long shots, was quick to learn from his own mistakes, and he was always able to explain the reasons behind a purchase.
Lynch is heralded as one of the biggest success stories on Wall Street. Today, he is serving as the vice chairman for Fidelity Management & Research Company and is working with a variety of philanthropic endeavors.
- Don't be afraid to change things up, but always be able to explain why
- Knowledge is power
6. George Soros
George Soros is an investing heavyweight, rising to fame in the early 90’s on the back of his bet against the Bank of England. The hedge fund maverick made one billion dollars in a single month by betting against the British pound at a time when the Bank of England artificially propped up the currency. If that doesn’t make him one the best investor in the world then we’re not sure what qualifies.
Soros is old school, and embraces the unpredictable nature of investing in markets. A gambler at heart, he specializes in taking highly leveraged bets, or making investments using borrowed cash, to capitalize on macroeconomic trends. He’s a big believer in doing the research, then following his gut instinct.
Invest like George Soros:
- Study the markets and central bank policy
- Do your research and try to capitalize on macro trends
- You can invest in currencies not just companies
- Follow your gut
7. Jack Bogle
When you get a chance, make sure to write Jack Bogle a thank you letter because he’s been a true champion for the average joe investor. Bogle is the man who pioneered low-cost index investing for millions of people just like you, by founding the Vanguard Group in 1974, which created the first index fund – the Vanguard 500.
Bogle was one of the first to forgo the individual stock-picking strategy in favor of a broadly diversified portfolio made up of index funds, held over a long time period. Bogle’s legacy and contribution to finance cements his reputation as one of the world’s top investors.
Invest like Jack Bogle:
- Keep costs low
- Stay in it for the long haul
- Do not try to time the market
- There’s strength in numbers
8. Carl Icahn
Carl Icahn is likely the greatest activist investor, and one of the most famous investors of our time. He likes to get his hands dirty and is a specialist in buying up companies he thinks are poorly managed, before turning them around for a quick profit.
His strategy involves getting on the board of companies he invests in, then he cleans house. He’ll either get the company making money again or break it up and sell off the profitable parts.
He’s such a successful business investor that mere rumors of his involvement is enough to get other investment managers buying up shares of said company, raising the stock price. This phenomenon is known as the Icahn Lift.
Invest like Carl Icahn:
- Buy up stakes in poorly managed companies and manage them yourself
- Take feelings out of investing
9. Bill Ackman
Bill Ackman is often compared with Carl Icahn because they are both activist investors. Out of the top business investors, Ackman isn’t afraid to voice to his opinions. He correctly predicted the 2008 recession and is famous for his high profile bet against Herbalife – going so far as to call them out for operating a pyramid scheme.
Ackman has an incredible track record, turning $50 million into $12 billion with Pershing Square Capital. That sort of return places him firmly in the pantheon of the most successful investors of all-time.
Invest like Bill Ackman:
- Invest in solid companies that need a little financial cushion.
- Guide companies to profitability, and then get out
- Speak your mind
10. Peter Thiel
Peter Theil is an alien. Seriously, how else do you explain his amazing success?
Successful investors come in all shapes and forms. Thiel is a bit different from the other men on this list because rather than investing in the market he became an entrepreneur and angle investor. The man co-founded not one, but two multibillion-dollar companies (Paypal and Palantir) and he was the first person to invest in Facebook.
Thiel touches on his investment philosophy in his book Zero to One, where he talks about how a successful business should have some sort of monopoly. He brings up Google as an example, a company that has a monopoly in search.
Invest like Peter Thiel:
- Create or invest in companies that have a strong monopoly in some niche
11. Ray Dalio
Dalio, one of walls streets best investors, is the world’s most successful hedge-fund manager right now – yes, even above Warren Buffett. He’s the world’s 88th richest human and boasts an estimated personal fortune of $15 billion. His company, Bridgewater Associates, is the world’s largest hedge fund and has around $160 billion in assets.
He’s been called Wall Street’s Oddest Duck for his…ummmm…..unique…management style. He runs his company as a strict meritocracy – where employees are encouraged to be up-front at all times and tear down other’s ideas in search of the “truth”. Talk behind a colleague’s back three times at Bridgewater and you’ll soon be short a job. Not kidding.
The company has done extremely well, throwing up an annualized return of 14% since 1991. For comparison, the S&P500 has returned 7.25% in that same time period; if you consider reinvested dividends, the S&P500 generated an annualized return of 9%, which still falls short of the impressive Bridgewater portfolio.
Dalio’s strategy is to take numerous uncorrelated bets in markets all over the world. An uncorrelated bet means that a bet going south in one market isn’t affected by or does not affect a bet in another market. It’s essentially another way of saying that they diversify their portfolio super well. Dalio splits the market into two: growth and inflation; each segment is then divided into two again, depending on whether the variable in question is rising or falling. He then tries to make sure he is equally distributed in all 4 categories. This strategy has helped Dalio become one the top investors in the world!
Invest like Ray Dalio:
- Honesty is the best policy
- Diversify your portfolio to mitigate loss
12. Prince Alwaleed
Prince Alwaleed, the Saudi Arabian prince, is one of the most influential business investors. He is worth more than $20 billion and has investments across a wide range of interests, including banking, entertainment, retail, petrochemicals and transportation. He is the founder and CEO of Kingdom Holding Company, an investment company based in Saudi Arabia. You can say, he’s investment royalty.
Often referred to as the Saudi Warren Buffett, he favors high-growth, high-risk tech companies (unlike Buffett) and has ownership over a large collection of luxury hotels such as the Savoy in London and Plaza in New York.
Legend has it that the Prince turned a $15,000 inheritance in 1979 (worth about $50,000 today) and a house that he mortgaged for $400,000 into a $20 billion+ empire.
The recession was a difficult time, as his company lost 65% of its capital and had to move some of his own money into the investment company. His stake in Citibank suffered the most, falling in value by $6 billion. He’s made a comeback since then and KHC is one of the largest foreign investors in the U.S.
Invest like Prince Alwaleed
- Favor high growth, high risk companies because the greater the risk, the greater the return
There you have it!!!
Tricks of the trade from the world's most famous investors. Follow anyone of these philosophies and you'll be sailing that private yacht in no time.
Just remember, it's up to you to use what method works best for your money and always be smart and diligent when it comes to investing.
Liked reading about the giants of wall street? Take a trip on over to the west coast and learn more about the “Giants of Silicon Valley” in the new WSS course.