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Famous Investors

 

These are some of the greatest investors in the world.  These are the investors that have helped shaped the world of stock investing.

 

►Warren Buffet

Backround
Warren Buffet is often referred to as "The Oracle of Omaha".  Warren Buffet is one of a very few billionaires who has amassed wealth solely through investing in stocks.  Buffet's Berkshire Hathaway investment company, headquartered in Omaha, Nebraska, has seen exceptional returns over the decades.  A $10,000 investment in Berkshire Hathaway in 1965 would have grown to 50 million dollars today.  This has made Buffet the second richest man in the world with a net worth of over $36 billion.

   

Investment Style 
Buffet's number one investment goal is to never lose money regardless of market conditions.  Buffet 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 forecast where the company is going to be 10yrs from the present.     

 

Warren Buffet Link

 

 

 

►Peter Lynch

Backround
Peter Lynch is probably the most famous mutual fund manager on Wall Street.  Born in 1944, Peter Lynch started managing the Fidelity Magellan Fund in 1978.  When he started, the fund had assets of 20 million dollars.  When he retired in 1990, Magellan Fund had assets of 14 billion. 

   

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 an amazing average return of 29%.   Lynch believed in investing in what you know and to always be fully invested. Lynch normally looked for three qualities in what he considered to be 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.

 

Peter Lynch Link

 

 


Benjamin Graham

 

Backround
Benjamin Graham is often called "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, who worked for him in his early years.  

 

Investment Style 
Graham, who died in 1976, looked 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 looks for companies that pay out dividends and are in good financial condition. Graham looked for companies that are trading below their historical P/E average and trading below 1.2 times book value.  His investment style is pure value investing and has proved successful over the years.

 

Benjamin Graham Links:

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