Warren Buffett is regarded by most as being one of the greatest investors of our time. His buy-and-hold style has allowed him to purchase hundreds of companies that he felt were fundamentally undervalued. Buffett’s ability to identify great companies at the right time has helped him to become one of the richest individuals in the world, with a net worth of over $100 billion.
Even though Buffett has beaten the for nearly 50 years during his career, there are some critics that raise the question as to whether or not he has lost his mojo. Since the recession in 2009, Buffett has gone through several years where he failed to outperform the S&P 500.
Here are five other investors, besides Warren Buffett, who are also considered to be the best of the best in the industry.
Key Takeaways
- George Soros is the founder and chair of Soros Fund Management, LLC, a private investment management firm. He is considered a short-term speculator, making highly leveraged bets on the direction of the financial markets.
- Carl Icahn is a contrarian investor whose philosophy is to buy something when no one wants it.
- John Bogle was the founder of the Vanguard Group, the creator of index investing, and the father of passive investing.
- Benjamin Graham is considered the father of value investing. He was mentor to Warren Buffet.
- Peter Lynch is the former manager of the Magellan Fund at Fidelity. He's known for his "buy what you know" investment phrase and for creating the PEG ratio.
George Soros
Hedge fund manager George Soros is a completely different kind of investor compared to Warren Buffett. Soros doesn’t have a defined investing strategy; instead, he makes investments that come from gut decisions. He is most well known for his $10 billion bet against the British Pound in 1992.That bold move made Soros over $1 billion and forced the Bank of England to purchase one billion British pounds and raise interest rates by 2%.
Carl Icahn
Carl Icahn is one of the greatest investors of the past 25 years; however, at times his performance can be overshadowed by his corporate antics. Icahn, also known as a “Corporate Raider,” regularly gets involved with companies that he feels lack leadership. Love him or hate him, his involvement usually leads to a company’s turnaround, giving Icahn a 31% annual rate of return from 1968 until 2011. In comparison, Warren Buffett had an annual rate of return of just 20%. Icahn's rate has also beaten Buffett's over the last 20 years.
John "Jack" Bogle
Jack Bogle is the founder and retired CEO of The Vanguard Group. Bogle started Vanguard over 40 years ago, and today it is the largest fund company, even ahead of BlackRock Inc. (BLK), with over $6.2 trillion under management.
Bogle has an extremely simple investment style. He believes in putting money into low-cost index funds that have low commissions and very little turnover of assets. That alone is a big reason why so many people trust him and his company with their money.
Benjamin Graham
Benjamin Graham is the author of one of the most popular books on investing, “The Intelligent Investor.” Graham is known as the “father of value investing,” which is probably why he became Warren Buffett’s mentor. Graham was never a huge risk-taker when he made investment choices; he used solid financial analysis to pick great companies.
In 1951, Buffett took a class at Columbia University that was taught by Graham. He said there were three important things that Graham taught him:
- A stock is the right to own a little piece of a company. The value of the stocks you own is only as valuable as the company as a whole.
- You need to use a margin of safety when investing. It’s important to buy into a company when the market price of the stock is below the company’s intrinsic value.
- Mr. Market is your servant, not your master. It’s important not to get wrapped up in everything that is going on with the markets. Instead, focus on your own research into a company.
Peter Lynch
Peter Lynch is most well known for managing the Fidelity Magellan Fund from 1977 to 1990. During this span, the fund returned an average of 29% per year to its shareholders. It beat the S&P 500 in 11 of those 13 years.
Lynch is known to be able to adapt his investment style to whatever was working during certain market conditions, so it makes sense that people started calling him the “chameleon.”Even though he might have lived by an ever-changing style, he always applied a set of eight different principles to the companies in which he invested.
What's the Difference Between Warren Buffet and Benjamin Graham When It Comes to Value Investing
Although both legendary investors utilize a value investing approach and share the same principles, they rely on a different execution. Graham's investing strategy focuses on low-multiple, small-cap stocks, whereas Buffett prefers larger-cap stocks without necessarily low multiples.
What's the Difference Between George Soros and Warren Buffett's Investing Style?
Both George Soros and Warren Buffett are considered to be the most successful investors in history, but their investing strategy is very different. Buffett relies on a value investing strategy, seeking out companies that exhibit strong fundamentals. Soros is more of a speculative investor, who depends on short-term market movements and highly leveraged trades.
What's Elon Musk Investing Strategy?
Elon Musk has described himself as "cash poor" since most of his wealth is tied up in his businesses. He doesn't have a large, diversified portfolio of stocks of companies where he is not directly involved. Musk's investments fall into two broad categories: companies he started or now controls, and cryptocurrencies.
The Bottom Line
Great investors don’t come around every day. Those that can manage to bring double-digit returns to their investors over decades are an even smaller crowd. These five investors have proven themselves to be some of the greatest investors of the past few generations.
