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World's
Greatest Investors
These
are some of the greatest investors in the world.
These are investors that have helped shaped the world
of investing analysis.
Warren
Buffet
Famous
Quotes
1.
"The first rule is not to lose. The second rule
is not to forget the first rule."
2.
"If past history was all there was to the game,
the richest people would be librarians."
3. "Risk comes from not knowing what
you're doing."
4.
"Look at market fluctuations as your friend
rather than your enemy; profit from folly rather than
participate in it."
Backround
Warren Buffet is know as "The Oracle of
Omaha". Warren Buffet was born in Omaha,
Nebraska in 1930. Warren Buffet is one of the
very few billionaires who has amassed wealth solely
through investing in stocks. Buffet's Berkshire
Hathaway investment company has seen outstanding
returns over the years. A $10,000 investment in
Berkshire Hathaway in 1965 would be worth 50 million
dollars today. This has made Buffet the second
richest man in the world at a net worth of over $36
billion dollars.
Investment
Style
Buffet's
number one goal for investing is to
NEVER LOSE ANY MONEY regardless of market
conditions. He believes in buying stocks trading
near their tangible asset value. He also avoids
companies that have excess debt. Buffet then
looks at the companies track record for ROE and tries
to predict where the company is going to be 10yrs from
now.
Peter
Lynch
Famous
Quotes
1. "Everyone has the brainpower to
follow the stock market. If you made it through
fifth-grade math, you can do it."
2.
"Go for a business that any idiot can run -
because sooner or later, any idiot probably is going
to run it."
Backround
Peter Lynch is the most famous mutual fund manager.
Peter Lynch was born in 1944 and started managing the
Fidelity Magellan Fund in 1978. When he started,
the fund had assets of 20 million dollars. When
he retired in 1990, the Fidelity Fund had assts of 14
billion. Today the fund has assets of over 50
billion dollars.
Investment
Style
Peter
Lynch's strategy was to adjust to whatever investment
style worked at the time. He took a lot of risks
over the years yet never had a losing year. The
fund had a amazing average return of 29%.
Lynch believed in investing in what you know and to
always be fully invested.
Lynch
generally looked for three qualities in a good
company: profitability, price, and a good
business model.
Check
the key numbers.
1. If you are excited by a particular product or
service, ensure that it accounts for a sufficient
percentage of total company sales and that it makes a
significant contribution to profits.
2. Favor companies with a strong cash position
3. Favor companies with a forward PE ratio well below
their forecasted EPS growth rate
4. Avoid companies with high debt-to-equity ratios.
5. Avoid slow growers and cyclical stocks.
Benjamin
Graham
Famous
Quotes
1. "To achieve satisfactory
investment results is easier than most people realize;
to achieve superior results is harder than it
looks."
2.
"The one principal that applies to nearly all
these so-called "technical approaches" is
that one should buy because a stock or the market has
gone up and one should sell because it has declined.
This is the exact opposite of sound business sense
everywhere else, and it is most unlikely that it can
lead to lasting success in Wall Street. In our own
stock-market experience and observation, extending
over 50 years, we have not known a single person who
has consistently or lastingly made money by thus
"following the market." We do not hesitate
to declare that this approach is as fallacious as it
is popular."
Backround
Benjamin Graham is "The Father of Value
Investing". Graham founded many of the
fundamental analysis and value-investing principals
that are used today by fund managers and famous
investors such as Peter Lynch and Warren Buffet.
Investment
Style
Graham
looks for what he calls a "Margin of Safety"
when investing in stocks. This is defined by how
much a stock is trading below its intrinsic value
which is what the business would be worth if it were
sold today. Graham likes large companies with
strong sales since they pose less risk. He also
likes companies that pay out dividends and are in good
financial shape. Graham looked for companies
that are trading below their historical P/E average
and trading below 1.2 times book value. This
investment style is hardcore value investing that has
proved successful over the years.
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