Financial News

Rock Stars Of The Investment World

As cryptocurrencies and economic turmoil dominate the headlines, successful investors and fund managers have become more notable, amassing substantial fortunes through skill, judgement and, in some cases, luck.

The ten individuals below are considered the ten best investors ever. While many have different strategies, approaches and philosophies, all have one thing in common: they know how to beat the markets and keep on doing so.

1. Benjamin Graham

Graham is famous for being Warren Buffett’s mentor and teacher. Still, he was already a successful investor, managing his wealth and client funds with a low-risk stock market approach and a novel financial analysis system.

He was also a key influence in creating the Securities Act of 1933, which introduced requirements for public companies to publish independent financial audits.

Graham focused on safety margins and buying well below a conservative business valuation. He wrote The Intelligent Investor summarising his philosophy – one of the most famous investment books ever published.

He passed away in 1976 worth an estimated $3 million (£2.77 million) – a low sum considering his success because he donated the majority of his fortune during his life. Buffett said that Graham was not interested in making money but in developing investment disciplines and sharing his knowledge.

2. John Templeton

Templeton was a pioneer in mutual fund investment, and in 1939 at the end of the Great Depression, he bought stocks at low prices and retained them, making enormous profits in the internet boom.

He bought 100 shares in every stock listed on the New York Stock Exchange for $1 (£0.92) or less, having borrowed $10,000 (£9.221) – all but four were successful, and Templeton sold them four years later for over $40,000 (£36,885).

An investor in the Templeton Growth Fund paying $10,000 (£9,221) in 1954 would have achieved a $2 million (£1.84 million) return by 1992. Templeton created some of the largest and most profitable international funds and sold his fund to the Franklin Group in 1992.

3. Thomas Rowe Price Jr.

Price Jr is often considered the father of growth investment and learned to embrace the potential of the stock markets during the Depression. He first understood the cyclical nature of markets and invested on a long-term basis, an unheard-of approach.

He founded the T Rowe Price investment firm in 1937, with a headquarters in Baltimore, and dealt with mutual funds, account management and retirement plans, with a philosophy of consistency, discipline and due diligence.

Of his many books, The Man, The Company and The Investment Philosophy is

the best known. Price Jr passed away in October 1983, aged 85, and his family decided to retire from the business.

Now called T Rowe Price Associates, the firm went public in 1986 and joined the S&P 500 in 1999.

4. John Neff

Neff managed the Vanguard Windsor Fund for over 30 years and was a low-key investor who called the fund dull, conservative and relatively prosaic – but his results were different.

Between 1964 and 1995, Neff steered the fund to produce an average annual return of 13.7 per cent, beating the 10.6 per cent S&P 500 average.

Neff joined the Wellington Management Co in 1964, becoming a managing partner and working alongside friend and tennis opponent John Bogle.

He passed away in June 2019 after running the endowment fund for the University of Pennsylvania from 1980 until 1998, growing the fund from $200 million (£184 million) to $3 billion (£2.8 billion).

5. Jesse Livermore

Livermore was a self-made millionaire who amassed a $100 million (£92 million) fortune at the height of his career in 1929 – worth about $1.5 billion (£1.38 billion) today. Without any trading experience or formal education, Livermore learned as he went and paved the way for future investors.

Born in 1877, Livermore wrote a book in 1940 called How to Trade in Stocks, which covers the trading ideas he accumulated through trial and error.

He first started trading as a teenager and made over $1,000 (£922) in profit, which is the equivalent of over $35,000 (£32,300) in our current economy and started betting against illegitimate gambling shops.

6. Peter Lynch

Lynch is described as a chameleon who adapts to different markets and investment styles, invariably coming out wealthier for trying. He managed the Fidelity Magellan Fund from 1977 to 1990. During that time, he grew fund assets from $18 million (£16.6 million) to $14 billion (£12.9 billion).

In 11 of the 13 years managing the fund, Lynch beat the S&P 500 Index, with an annual average return of 29 per cent.

Lunch has an estimated net worth of $352 million (£325 million), and these days, he works part-time as a vice chairman for the investment advice arm of Fidelity Investments, mentoring younger analysts.

7. George Soros

Soros became famous as the investor who broke the Bank of England, risking $10 billion (£9.2 billion) in September 1992 when he shorted GBP – and made over $1 billion (£0.92 billion) in one working day with the trade returning a net gain of just under $2 billion (£1.84 billion).

He founded Soros Fund Management, a hedge fund company in 1973, which later became the Quantum Fund. Soros ran his fund with a typically aggressive approach, achieving annual returns over 30 per cent and twice posting a yearly return above 100 per cent.

Soros picks stocks based on gut instinct – his net worth of $6.7 billion (£6.18 billion) indicates that his instincts remain reliable.

8. Warren Buffett

Buffett is one of the best-known investors, called the Oracle of Omaha, referring to his home city.

He began as a junior investor, earning $12,000 (£11,066) a year, and began investing in partnerships, buying out Berkshire Hathaway, a textile manufacturing company at the time.

The investor bought shares for $10,000 (£9,221) in 1965, today worth over $165 million (£152 million), transforming the firm into a diversified holding company. Even though Buffett routinely avoids tech companies, he has amassed a personal fortune of $92.9 billion (£85.7 billion) by sticking to what he knows.

9. John (Jack) Bogle

John Bogle made his wealth by attempting to match overall market returns. His idea was that a low-cost index, as a passive mutual fund, would be the best way to replicate benchmark performance by taking a buy-and-hold approach.

He founded the Vanguard Group in 1975, a mutual fund company, and opened the flagship Vanguard 500 index fund in 1976.

Today, Vanguard has around ten funds and over $2 trillion (£1.84 trillion) in assets. Bogle passed away in 2019, but not before publishing a book called Common Sense on Mutual Funds, setting out his investment philosophy.

10. Carl Icahn

Icahn is the founder of Icahn Enterprises and remains the controlling shareholder. He began investing in the 1970s, selecting shares in public companies.

A hostile takeover of Trans World Airlines in 1985 propelled Icahn into the limelight, and he coined the ‘Icahn Lift’, a trend that Wall Street described as the impact on stock prices when Icahn started buying shares.

Known as both a shareholder activist and a ruthless corporate investor, Icahn prefers businesses he believes are badly run, buying enough shares to vote himself onto the board, and achieving extraordinary success using this strategy for the past 30 years.

Rock Stars Of The Investment World FAQ

What do the best investors have in common?

One of the principles of investing is that market downturns happen, and even the most experienced investor might have a bad year – but dealing with challenging climates and emerging unscathed requires discipline and resilience.

What is Warren Buffett’s golden rule of investment?

Buffett likes to talk about the ’20-slot’ rule when delivering lectures and says he could improve your financial position by providing you with a ticket that contains 20 slots, each representing one of a limited number of investments you get to make in your lifetime.

The idea is that if you can only ever make 20 investments, you will research opportunities thoroughly, hold off making a rash move, and be more selective about where you invest your money.

What is the best investment ever made?

Although opinions might vary, Jeff Bezos and his family made some of the largest returns recorded when they invested in Amazon as a startup. His parents invested just over $245,000 (£225,000) in 1995, with a value of roughly $30 billion (£27.6 billion) today.

What is the biggest return Warren Buffett has achieved?

Buffett’s most successful investments have been in Bank of America shares, and his highest gain was a $15 billion (£13.8 billion) profit. He also purchased Coca-Cola shares in 1988, which have grown in value by 1,350 per cent.

Who is the most successful stock picker?

Bill Ackman is often regarded as the best stock picker in history and manages the Pershing Square Capital Management hedge fund. His track record includes impressive returns, with a 17.1 per cent annualised return from 2003 to 2021.

Below is a list of related articles you may find of interest.

Leave a Comment