Below are famous investors and their strategies which they employed or still use to amass their fortunes.
Warren Buffet and Charles Munger look to invest in companies with a history of financial success. They do this by looking for:
- Growth in sales and earnings
- High return on equity
- Low gearing (33 per cent or loss)
- Rising book value
- Strong and growing profit margins
John Neff a well known value investor would invest into companies that were due for a re-rating in the medium term. He did this by looking for companies with a low P/E ratio.
One of Value Investor Benjamin Graham’s rules for choosing stocks is to have a share price less than two thirds of its book value (NTA) per share. For the full list of rules follow link below.
Before buying stocks, growth investor Philip Fisher preferred to get into contact and ask set questions with suppliers, customers, company employees, industry experts and company management.
Well-known British investor Jim Slater looked for companies with a price earnings growth factor (PEG) of 1 or less. He also liked to see management with notable shareholding in the company, as they would look after their vested interests.
Australian Charles Viertel searched for companies with strong dividend yields which provided cash flow to expand his portfolio. He placed emphasis on three fundamentals NTA backing, P/E ratio and track history.
Investor Peter Lynch favoured companies that have a low PEG ratio, high profit margin, a strong cash position and low geared.
John Bogle, the creator of index funds, famous quote is ‘What’s the point of looking for the needle in the haystack? Why not own the haystack?’
Overseas investor John Templeton would keep away from investing into countries plagued by inflation or socialist policies and approved of those with high long-term growth rates.
10 Famous Investors and their Strategies Conclusion
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