When we take a look at the stock market, we see that there are hundreds, if not thousands of both public and private stock market investors that have been successful. Their success comes in all different shapes and forms, all of which have different guidelines, rule sets, and philosophies. For the average person who wants to start investing in the stock market, all of these guidelines and rule sets can be overwhelming, but that doesn’t mean that you can’t earn a nice tidy profit. With proper discipline, patience, and education, one can study those who have made millions of dollars and find success by understanding how the “greats” move within the stock market. With this said, let’s take a look at the top 5 stock market investors and what made them successful.

  1. Warren Buffett: is considered one of the greatest investors of all time and is almost always at the top of the list for the most well-known investors in the stock market world. He has had decade-long success in both running businesses and buying companies that will continue to consistently grow. Buffett had a stockbroker for a father and found early success in purchasing a textile mill known as Berkshire Hathaway which he has turned into one of the worlds biggest multinational conglomerates. A $10,000 investment in Buffett’s Berkshire Hathaway in 1964 would be worth more than $240 million today. Buffett’s usual strategy is to find undervalued companies, buy them outright and allow them to keep running as usual with no managerial input from him. The key here though for him, is to only look at companies that have a high predictability rank, which essentially means that the company will still consistently grow despite being undervalued. The secret here is to always find stocks that are undervalued, and don’t put yourself or the company into debt to obtain them. His net worth as of 2018 is $81.9 billion USD.
  2. George Soros: worked as an analyst in New York until he started his own company in 1973 called Soros Fund Management. It is now known as the Quantum Fund and is renowned because of the unprecedented returns it brings in, with an average of 30% per year. Although Soros was considered a speculative investor, making huge bets on macroeconomic trends, it netted him huge profits. Despite the fact that he was a short-term trader, there is something critical to be learned from his psychology and philosophy. He understood that the markets were a chaotic mess of the actions and thoughts of all investors, both professional and non-professional, and this could enable anyone to make money by understanding how the noise made by the masses, was turned into action. To invest like him you need to study the markets, capitalize on macro trends, follow your gut, and invest in both currencies and companies. His 2018 net worth is $8 billion USD.
  3. Carl Icahn: although not always painted in a positive light, Carl Icahn, is a value investor that “cleans house” in companies that are poorly managed. His strategy involves buying up enough shares to get himself voted onto the Board of Directors and then makes management changes to get the company making a profit. If the company cannot make a profit, he sells off the shares that are profitable and moves on. This strategy, although not true value investing, has worked for him for the past thirty years or so. To invest like him, buy stakes in poorly managed companies and manage those stakes yourself. His 2018 net worth is $19 billion USD.
  4. Benjamin Graham: is considered the father of security analysis and value investing, he wrote two of the most influential investing books called The Intelligent Investor and Security Analysis and even taught Warren Buffett. Similar to Buffett, Graham believed that companies should always be undervalued during the purchase period but should hold strong business fundamentals. He used a “common sense” philosophy that states investments are only worth purchasing if they are worth substantially more in value than what they cost to buy them and this is known as having a “margin of safety”. Graham often sought out companies that had excellent balance sheets with good cash flow and little to no debt. His secret was to always sell when the holdings were being overvalued in the market.
  5. Peter Lynch: is on the list because it gives individuals hope who do not have a background in any financial education. Lynch studied history, psychology, and philosophy in Boston before moving on to study business. He is most well known for his annual average return of 29% and his time as manager at Fidelity Magellan, where he took a $20 million fund and turned it into a $14 billion fund in thirteen years. His secret was a relentless work ethic that revolved around using fundamentals to find good businesses to invest in and remembering to stay flexible. Like many other successful investors, Peter Lynch didn’t use just one strategy but used what worked at the time. His net worth in 2018 is estimated to be over $400 million USD.

The above five are not the only ones who are well-known in the investment world, with other heavy hitters being John Jack Bogle (Vanguard Group), John Templeton (Templeton Growth Fund), Philip Fisher (Fisher & Company), Peter Thiel (PayPal & Palantir), Bill Gross (Pacific Investment Management Company), and Walter Schloss (value investor). Regardless of which method speaks to you or where you want to start, in order to emulate the best, you have to understand where they came from, so the key here is understanding the knowledge behind the investment philosophy of choice.

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