The most successful investors have all acquired fortunes as a result of their success, and in many cases, they have assisted millions of others in achieving similar results.
The strategies and philosophies used by these investors varied greatly; some devised new and innovative ways to analyze their investments, while others chose securities almost entirely on instinct. Where these investors agree is in their ability to consistently outperform the market.
Benjamin Graham
Ben Graham was a remarkable investment manager and financial educator.
He wrote two investment classics that are unrivaled in their importance, among other things.
He is also widely regarded as the originator of two fundamental investment disciplines: security analysis and value investing.
The essence of Graham’s value investing is that any investment should be worth significantly more than the amount paid for it by the investor.
He believed in fundamental analysis and sought out companies with strong balance sheets, low debt, above-average profit margins, and plenty of cash flow.
John Templeton
John Templeton, one of the twentieth century’s top contrarians, bought low during the Depression, sold high during the Internet boom, and made more than a few good calls in between. Templeton established some of the largest and most successful international investment funds in the world.
In 1992, he sold his Templeton funds to the Franklin Group. Money magazine dubbed him “arguably the greatest global stock picker of the century” in 1999. Templeton was knighted by Queen Elizabeth II for his many accomplishments as a naturalized British citizen living in the Bahamas.
Thomas Rowe Price Jr.
Thomas Rowe Price Jr. is known as the “Father of Growth Investing.” He spent his formative years struggling with the Depression, and the lesson he learned was to embrace stocks rather than avoid them. Price considered financial markets to be cyclical.
As a dissenter, he began investing in good companies for the long term, which was virtually unheard of at the time. His investment philosophy was that long-term investors needed to focus more on individual stock selection.
His successful investing career was built on discipline, process, consistency, and fundamental research.
John Neff
Neff joined Wellington Management Co. in 1964 and stayed for more than 30 years, managing three of the company’s funds. His preferred investment strategy involved investing in popular industries via indirect routes, and he was regarded as a value investor because he focused on companies with low P/E ratios and high dividend yields. He managed the Windsor Fund for 31 years (ending in 1995) and earned a return of 13.7 percent, compared to 10.6 percent for the S&P 500. This equates to a gain of more than 53 times the original investment in 1964.
Jesse Livermore
Jesse Livermore had no formal education or stock trading experience. He was a self-made man who learned from his winners as well as his losers. It was these successes and failures that helped cement trading ideas that can still be found throughout the market today. Livermore began trading for himself in his early teens, and by the age of sixteen, he had reportedly produced gains of over $1,000, which was big money in those days. Over the next several years, he made money betting against the so-called “bucket shops,” which didn’t handle legitimate trades—customers bet against the house on stock price movements.
Peter Lynch
From 1977 to 1990, Peter Lynch managed the Fidelity Magellan Fund, which grew its assets from $18 million to $14 billion. More importantly, Lynch reportedly outperformed the S&P 500 Index benchmark in 11 of those 13 years, with an annual average return of 29%. Peter Lynch was often referred to as a chameleon because he adapted to whatever investment style was popular at the time.When it came to picking specific stocks, however, Peter Lynch stayed with what he knew and/or could easily understand.
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