Generally speaking, if you come upon an investor who claims that they can beat the market on a consistent basis when it comes to their returns on their investments, you should make sure to scrutinize their statements with extra care and caution because that is extremely improbable. However, it is important to note that this is not necessarily impossible, seeing as how there are a small number of investors out there who have managed to perform such feats. Given their reputations, it should come as no surprise to learn that when they make a move, they are sure to cause a splash as other investors follow suit.
If you are interested in learning more about investing, you should start paying attention to these 5 influential investors.
As a proponent of value investing, Warren Buffett is someone who stresses the importance of buying into outstanding companies that are valued less than what they should be at the moment. As a result, it should come as no surprise to learn that his investment firm has bought a $1 billion stake in Apple in spite of the fact that its stock price has tumbled 30 percent within the last year. After all, Apple’s fundamentals remain strong in spite of its recent stumbles, meaning that his investment firm stands to reap incredible rewards once its stock price recovers.
Although this particular trade did not come from Buffett, who has stated that he is unwilling to invest in tech companies because he doesn’t understand them, it is nonetheless a perfect example of his approach, which has seen other trades such as a $488 million PetroChina investment with a total return of 720 percent and a $108 million Freddie Mac investment with a total return of 1,525 percent. Given these numbers, it is no wonder that Buffett is known as the Oracle of Omaha.
Each time Buffett makes a decision on what he’s going to buy or sell, the entire market knows about it and stocks are affected as such.
Although Jack Bogle might not have the same star power as some of the other names on this list, he is nonetheless an investing legend in his own right. He started out at Wellington Fund, rose to the top through his talent as well as the sheer extent of his commitment, before being fired for approving an unprofitable merger. However, Bogle went on to found the Vanguard Company, which was so successful that it was named by Fortune magazine in 1999 as one of the four most important investment companies of the 20th century.
In part, this is because he created the index mutual fund that could be bought and sold by members of the general public, which was distinguished from other mutual funds by the fact that it minimized management and thus management fees while still retaining outstanding performance in the long run by mimicking the performance of stock indexes. Now as then, Bogle remains an influential figure in funds who stresses the importance of common sense when investing in them, with common examples ranging from the need to assess funds based on their past performances to the need to avoid focusing so much on the past that it blinds the investor to a fund’s potential.
Carl Icahn has a rather ruthless reputation as a corporate raider, meaning investors who buy large numbers of shares in companies and then using the rights attached to those shares to pass measures that will raise stock prices in spite of the companies’ current management. However, there is no doubt that he has also had a long and distinguished career on Wall Street, as seen by his founding of Icahn & Co., which specializes in arbitrage as well as a particular kind of derivatives.
In contrast to Buffett’s team, Icahn started out as a strong advocate of Apple in 2013 but sold his entire stake in 2016, citing concerns about the extent to which it relies on its Chinese consumers. Other examples of Icahn’s famous trades range from how he bought 5.5 million shares in Netflix, causing its stock price to soar, to his struggles with Time Warner’s management, which has since brought the latter to the bargaining table.
Like a lot of the other great investors out there, William H. Gross has an excellent understanding of risks as well as calculating the odds, which might why he is also famous for being a professional blackjack player in Las Vegas. Regardless, Gross’s main claim to fame is being the “King of Bonds,” though it is worth noting that he also trades other financial instruments as part of his fund management.
Although he has since departed Pacific Investment Management, which he co-founded, he is currently the main man at Janus. Bill has a fair number of recent famous trades to his name. For example, he is one of a number of investors who reduced their exposure to Brazil before the current Brazilian political crisis, as well as someone who made an accurate prediction that German Bunds would raise but failed to capitalize on his prediction by making the wrong preparations.
Each time Gross makes a quote, there’s a huge ripple in the bond markets.
George Soros is still remembered in some places as “The Man Who Broke the Bank of England,” which refers to an incident when he made £1 billion by selling pounds sterling, which along with the actions of other investors, forced the United Kingdom to withdraw from the European Exchange Rate Mechanism because of its failure to meet its requirements under its agreement with other participants.
However, his start is just as interesting, seeing as how he is a Jewish survivor of the Nazi occupation of Hungary who immigrated to England after the war, did a number of odd jobs, but eventually managed to land an entry position at a bank after many rejections. His experience in finance has seen similar variance, ranging from arbitrage to securities, though it is this variance that has contributed to his theory of reflexivity, which claims that values in the market are often driven by the personal beliefs of participants rather than fair and accurate assessments of fundamental economic value.
Of course, there are more great investors out there than the five who have been mentioned here. Furthermore, it should be noted that there are also more and more investors making a reputation for themselves on a constant basis, meaning that there will be more and more great investors as time passes. If you are interested in learning more by paying attention to what the great investors are doing, you should not hesitate to focus on those who specialize in the sort of investments that interest you because the field of investing is so broad that even the best investors cannot be considered masters of them all.