Jul 8, 2009

The 5 Greatest Investors of the Century and Their Core Investment Philosophies

In looking at some of the greatest investors of our time, it's interesting to see the patterns and belief systems that govern the way in which these great ones invest.

Each of the following 5 investors is worth studying if one wishes to better understand the methods of the greatest investors of our time. Cramming the complexity of their thinking and decision-making into a few sentences that summarizes their investment approach is surly an injustice.

But here it goes:

1. Warren Buffet - Find and invest in monopolies with brand names, superior products, intellectual property, huge fixed costs with economies of scale, or government grants.

2. Benjamin Graham - Buy companies for less than their intrinsic value. Start with the balance sheet and buy for less than book value.

3. John Burr Williams - Discount the cashflow of the business to the present value. Start with the income statement and buy for less than what it will likely earn in the future.

4. John Maynard Keynes - Focus. Know and understand the businesses you're investing in, and stay within your circle of confidence. Avoid diversification.

5. Phil Fisher - Invest in solid management with an enviable track record. Look for managers you like, trust, and respect.

So now the question is, which ones are you most like?

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