If you are new to investing or want to get better at it then there is a wealth of information available out there but if you want a shortcut, I believe there are 4 investing gurus you need to be following.
Investing gurus and recommended reading
WARREN BUFFETT
Probably the most successful investor ever and so much so that he is currently the third richest person in the world with a reported net worth of $84 billion.
Now well into his 80s Warren Buffett is Chairman and CEO of Berkshire Hathaway, a holding company that purchases and invests in some of the most famous companies in the world including American Express, Coca-Cola and Heinz. To buy just one share in Berkshire Hathaway will cost you around $300,000.
Buffett’s approach to investing is simple. He looks for long term value in a company and buys at a price he feels is right based on the long term value. When he buys a company he plans to hold it forever. He practices excellent textbook investing behaviour by never getting caught up in the emotion of investing. He isn’t worried when markets tumble and never chases the next new thing.
He is also a fascinating man in that he lives a very modest lifestyle in the same 5 bedroom house he bought in 1958 and plans to give away at least half his wealth to charity when he dies.
Quote: “I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.”
Recommended reading: The Essays of Warren Buffett
CHARLIE MUNGER
Vice Chairman of Berkshire Hathaway and very much Warren Buffett’s investing partner but Charlie Munger deserves recognition in his own right. Whilst Buffett has a lifetime of superb investment decisions, Munger focuses very much on the behavioural side of investing. He has researched and contributed to a number of studies around behavioural biases that affect our decision making especially when it comes to investing.
His own net worth is estimated to be around $1.5 billion and Bill Gates describes him as “the broadest thinker I have ever encountered”.
Quote: “In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time – none, zero. You’d be amazed at how much Warren reads – and at how much I read. My children laugh at me. They think I’m a book with a coupe of legs sticking out.”
Recommended reading: Seeking Wisdom: From Darwin to Munger – Peter Bevelin
TIM HALE
Based in the UK, Tim has previously worked in city for some of the largest investment companies in the world. During his time working in the investment world Tim has seen and researched all the classic mistakes that investors make.
This led him to set up an investment consultancy firm that works with UK financial planning firms to build proper diversified risk-focused portfolios for their clients.
His research led him to write a book on smart investing techniques which I think personally is a classic.
Quote: “The only sensible solution as an investor is to try and build a robust investment portfolio that delivers you with the long-term rewards of capitalism…… and has the capacity to weather whatever storms the markets suffer both over the short and long term.”
Recommended reading: Smarter Investing
JOHN BOGLE
Founder of the Vanguard Group, one of the largest investment companies in the world. When he created Vanguard in 1974 Bogle wanted to do something different. He created the first index fund that was available to investors. He believed that rather than paying managers higher costs to actively manage investment funds to try and beat the market, he offered funds that tracked a market (index). This resulted in lower costs for investors whilst still achieving the long term return of the stock market.
Bogle believes that it is very difficult for active fund managers to consistently beat the market on a long term basis once you factor in their higher costs. This has led Vanguard to be one the most respected investment companies in the world.
Warren Buffett has said that “Jack Bogle has done more for the average investor than any man in the country (US)” due to lower fees and solid returns from Vanguard.
Quote: “Don’t look for the needle in the haystack. Just buy the haystack.”
Recommended reading: The Little Book of Common Sense Investing
Risk warning:
Stock market linked investments and any income from them, can fall as well as rise and is not guaranteed. Any figures quoted are for illustrative purposes and should not be taken as a forecast or guarantee. Past performance should not be seen as an indication of future returns and clients may get back less than they have invested.
