TOP-7 strategies of the most successful investors

Success in investing largely depends not only on constant learning and developing your own investment strategies, but also on borrowing the experience of those who have already reached maximum heights. It is very important to know how some famous investors managed to achieve success and what approaches they used to do it. 

 

We have prepared an article in which we share the stories of the 7 most successful investors in the world, as well as their investment strategies and approaches. 

 

Warren Buffett: “Invest only in what you understand and at the right price”

Warren Buffett is not only one of the most successful investors, but also one of the richest men in the world. In 1965, he bought Berkshire Hathaway and developed it into a big holding company consisting of insurance, energy and industrial companies. It is to the advice of this investor that both his peers and the entire market listen. 

 

Buffett teaches his students how to assess the value of companies, pay attention to earnings, and evaluate stocks after careful examination. Stock valuation is an significant strategy an investor adheres to because in his opinion it is important to buy the business itself, not so much the stock. The investor has followed this strategy since the early 50s, which has helped him successfully invest in major companies such as American Express, Disney, Washington Post, Capital Cities/ABC, Coca-Cola, and Geico. 

 

Buffett's investment strategy is based on patient waiting. If shares which he bought begin to fall in price, the investor does not hurry to sell them at once, but begins to analyze their indicators. As a rule, patient waiting is successful, and the stock rises in value. 

 

Jack Bogle: “Don't look for a needle in a haystack. Just buy the haystack”

In 1975, Jack Bogle founded the Vanguard Group, the best investment fund of its time, which eliminated investor dependence on third-party brokers and charged no sales commissions. The company now manages $7.1 trillion in investor assets. In addition, Jack Bogle created the first Vanguard 500 index fund, whose goal was to strive for the performance of the S&P 500 index. 

 

In 1999, Fortune magazine listed the investor as one of the four investment giants of the 20th century, and his book "Mutual Funds from a Common Sense Perspective. New Imperatives for the Sensible Investor" is recognized as a classic of investment literature.

 

Jack Bogle's strategy and approach to success is to invest passively in indices. This strategy allowed the investor to get the same returns with minimal effort that an active market provides. 

 

Benjamin Graham: “A reasonable investor is a realist who sells to optimists and buys from pessimists”

Benjamin Graham is rightly considered the father of value investing, who used a strategy of investing in undervalued company stocks. 

 

His approach was to buy undervalued assets and maximize profits when they rose in value. Using this strategy, the investor increased his portfolio returns to 20 percent annually. By comparison, the S&P 500 Index was yielding 12.2% at the time.

 

Benjamin Graham was the teacher of such successful investors as Warren Buffett, Irwin Kahn, and Walter J. Schloss. He is also the author of two best-selling books in the field of investments: “Analysis of Securities” and “The Intelligent Investor”. 

 

John Templeton: “If you buy the same securities as everyone else, you get the same results as everyone else”

John Templeton's individual investment strategy was to buy assets that no one else was paying attention to. The investor called it “the point of maximum pessimism”. He argued that one should buy assets when pessimism peaked and sell at the peak of optimism. 

 

The strategy paid off. When World War II broke out in 1939, John Templeton bought shares of every company listed on the New York Stock Exchange at less than $1. As a result, shares of only some companies depreciated, while others made good profits. 

 

After John Templeton founded the Templeton Growth Fund, which is now part of Franklin Templeton with $1.4 trillion in assets.

 

Peter Lynch: “Buy what you know”

Peter Lynch is a famous investor whose success came in the 1980s, when he developed the Fidelity Magellan Fund into one of the largest investment funds with an annual return of 29%. 

 

One of the investor's famous quotes is, “Behind every stock is a company. Find out what it does”. That was his approach. He analyzed the company's performance and bought stocks with historically low yields. In addition, he avoided companies that were growing too fast and did not pay attention to market forecasts. This approach is still in demand and popular with investors today. 

 

In 1990, Peter Lynch left the fund with incredible results because when he came in the fund had $18 million in management and when he left it had $14 billion. In 1989, the investor published the best-selling investment book, "Beat Wall Street. 

 

Charlie Munger: “If people didn't make mistakes so often, we wouldn't be so rich”

Charlie Munger is a disciple of Benjamin Graham, a successful investor and partner of Warren Buffett. To this day, he serves as vice chairman of Berkshire. He also serves as director of Costo and chairman of the Daily Journal Corporation. 

 

Charlie Magner's strategy involves investing in proven companies whose quality of services and products he is personally satisfied with. Charlie's most successful investment was buying Berkshire stock at $16 a share. Now the company's share price is over $300,000 for a Class A asset.

 

In addition to successful investments, Charlie Magner is involved in philanthropy, transferring funds to provide for universities across the country. 

 

Carl Icahn: “There are two fatal mistakes in life and in business: acting hastily and not acting at all”

Carl Icahn is not just a successful investor and modern-day genius, he is a corporate raider. His investment strategy is to buy companies that are in distress and take them to the next level by increasing profitability. The investor buys a minority stake and gains control in running the company. 

 

One of the investor's most successful deals was the purchase of TWA Airlines in 1985. To pay off the loans he took out for this purchase, Carl began selling the company's assets. He then privatized the company and increased his fortune by $0.5 billion. 

 

One of the main rules of success in Carl's investments is that nothing should be taken into your account when investing. Icahn has made many enemies over the years, but investors should not strictly follow his advice in terms of interpersonal relationships. 

 

Another tip: Use your own market research based on facts, not the opinions of others. Other advice can be considered and checked, but it should not be the only reason to invest money.

Brief conclusions

 

Each of the above famous investors has their own unique strategy, which allowed them not only to multiply capital, but also to become a market leader. Therefore, when developing an investment strategy, take into account both personal observations and examples of investments of those who have already gone this way successfully.