3 Successful Investors and What We Can Learn From Them
3 Successful Investors and What We Can Learn From Them
by Scott C. Beck
History teaches us well, and success stories lay down a guide of sorts that future individuals can follow and build upon. Any serious investor knows that much can be gleaned from resources and insights. Expertise can come from research, experience, or by studying the careers of those who have exemplified themselves in the field.
Even our very own Jeffrey Weber has learned much from Robert Lichello's investment tips, which were instrumental in crafting the Automatic Investment Management approach to guarantee returns for investors. The original AIM approach has served as a foundation for the new version, which includes a Bear strategy to help investors navigate through economic downturns.
Fortunately, books aren't the only option for learning more about investing — learning by example works, too. Take some valuable investment insights by looking into the lives of three of the most remarkable investors of our time.
George Soros
George Soros is a sensational example for many reasons. Having donated 64% of his original fortune to non-profit organizations in support of Open Society efforts, he has given the most of any Forbes 400 billionaire. Even with that philanthropy, he is still worth 10 billion USD because of his acumen in investment, hedge fund management, and currency speculation.
In a guide to trading forex by FXCM, a major point of interest brought up for budding investors is leverage - profiting from changes in currency pairs by using borrowed funds to increase one's trading position (with a good ratio). This is the element that encompasses Soros' strategy, and eventually led to him becoming "the man who broke the Bank of England."
In 1992, as the British pound saw rising interest rates and a competing currency market in Germany's marks, Soros borrowed a massive amount of marks and converted them to the pound. When the pound eventually came tumbling down as he had expected, Soros was able to pay back his lenders at a lower rate, earning 2 billion USD.
If there's anything to learn from Soros, it's that one can capitalize on market analytics well and diligently following through on your game plan. If you can pay mind to economic trends and learn which tides you can bend to your favor, the higher risk can come with a bigger payoff.
Warren Buffet
His name alone sparks inspiration in the world of finance, becoming the fourth-wealthiest individual in the world because of his expertise in business and investment. He is often regarded for the famous quote, "Price is what you pay. Value is what you get." It's a good saying to remember when considering stocks and taking their potential into account. He puts it akin to buying socks. If you can get the same value for a lower price, then you've got yourself the best deal. That seems to be one of his core guidelines when value investing.
It should be noted that a recent article on value investing by The Economist suggests that it is becoming a tougher tactic to stand by. That's because intangible assets are becoming harder to analyze. That said, it has clearly served Buffet well, and has even led to him being dubbed as the Oracle of Omaha. It would seem that the best way to profit from this strategy is really to hone in on the research aspect of things. Making mindful decisions, no matter how big or small these strides may be, can cut through the vagueness that encircles much of today's markets.
Bill Gross
Considered the King of Bonds, William H. Gross is the leading bond fund manager in the world. As the founder of PIMCO Total Return Fund, the largest in the world, and the first portfolio manager to enter the Fixed-Income Analyst Society Inc. hall of fame, Gross is a beacon of bond and portfolio management success.
Gross is not afraid of unique options, and has long ensured that his investment portfolio is as diverse as it can get. Although he's known for his bonds and assets in debt markets, much of his money is in stamps. Collecting them as a hobby, he eventually sold off much of it for over $10 million at an auction in 2018. In fact, the most valuable single lot from this stamp collection was a printing error of the 1869 Pictorial Inverted Center, which brought in as much as $750,000. Though that may be a shadow of the $1.7 trillion his former fund dominates, it's a remarkable show of the validity of varied allocation in investments.
Though each of these inspiring investors have had big wins, we can also learn from their major losses as well. Once one maximizes the wealth of information available, it becomes even easier to forge another successful path in investment.
DISCLAIMER
Jeffrey Weber is not an investment adviser and gives only his personal view and opinion, never making any investment advice or recommendation to buy or sell specific securities. Investors in financial assets must do so at their own responsibility and with due caution as they involve a significant degree of risk. Before investing in financial assets, investors should do their own research and consult a professional investment adviser.