Rule #1 Finance Blog

With Investor Phil Town

The Best Investors in the World and What You Can Learn From Them

People often say they could never be successful investors…

  • But Phil, I’m not smart enough!
  • But Phil, I don’t have a background in math or finance!
  • But Phil, I could never do better than the market!

I want you to know that it is possible.

How do I know that?

Because EVERY successful investor got there the same way… by doing the work. No one is born the perfect investor – not even Warren Buffett!

I’m going to share some facts about a few of my favorite investors. Hopefully, it will inspire you to take the next step on your investing journey.

Now, why did I pick these investors…

… because they all follow Rule #1 Investing practices.

Warren Buffett, Charlie Munger, Benjamin Graham, David Einhorn, Mohnish Pabrai, and I all apply Rule #1 practices such as:

  • Doing thorough investing research on companies
  • Focusing on the industries they are already knowledgeable and passionate about
  • Investing with certainty
  • Investing in individual stocks rather than indexes

Rule #1 Investing focuses on knowing how to shop around and find something great for an even better price, and these investors do it the best!

Over the years these investors have offered us timeless investment advice and quotes. Here are 6 quotes and tips to teach you how to invest like the best investors in the world:

World Famous Warren Buffett Practices Patience

“The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.” – Warren Buffett

Warren Buffett is known as one of the most successful investors of all time. He runs Berkshire Hathaway, which owns more than 60 companies.

He emphasizes the importance of being patient and rational when investing. These traits will get you further than your intellect in the investing world.

Charlie Munger Thinks Long-term When He Invests

“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” – Charlie Munger

In the time of Charlie Munger’s reign as the Vice-Chairman of Berkshire Hathaway, Inc., the company has returned roughly 2,000,000% on its initial value.

He believes in investing in the long-term, rather than the short-term. Investing for the long-term means staying rational and not making emotional investing decisions.

Benjamin Graham Sells When People Are Greedy

“The intelligent investor is a realist who sells to optimists and buys from pessimists.” – Benjamin Graham

Graham is known as “the father of value investing” and was Warren Buffett’s mentor.

As a true value investor, Graham focuses on practicing patience in the stock market when others are greedy – and being greedy when others are fearful. He sells when the market is high and people are being greedy and buying, and buys when the market is low and people are scared and selling.

David Einhorn Enjoys Finding “Mispriced” Investments

“We take the traditional value investor’s process and just flip it around a little bit. The traditional value investor asks ‘Is this cheap?’ and then ‘Why is it cheap?’ We start by identifying a reason something might be mispriced, and then if we find a reason why something is likely mispriced, we determine whether it’s cheap.” – David Einhorn

David Einhorn is one of Wall Street’s most closely watched investors and heads hedge fund Greenlight Capital, which has $7 billion in assets and has posted a 15.4% net return since inception in May 1996.

He invests with certainty in businesses that are of great value but mispriced. He waits to find businesses that are on sale from Mr. Market.

Mohnish Pabrai Makes “Low-Risk, High-Reward” Bets

“Take advantage of Wall Street’s handicap by seeking out low-risk, high-uncertainty bets.” – Mohnish Pabrai

Outperforming the S&P 500 by 1103% from its inception through 2013, Mohnish quickly became one of the most recognized value investors in the world.

In true Rule #1 fashion, he focuses on businesses that are low-risk, high-reward.

Phil Town Wants His Investments to be Personal

“If we buy the business as a business and not as a stock speculation, then it becomes personal. I want it to be personal.” – Phil Town

Within five years, Phil Town had built a borrowed $1,000 into $1.45 million. His fortunes improved radically, and rapidly, from then on, and he now speaks to thousands annually about Rule #1 Investing.

He notes that investing should be personal. Invest in what you know, love, and care about, and feel confident in your investing choices.

All of these wonderful investors play by Rule #1 Investing’s ultimate rule: Don’t Lose Money.

I hope reading about these investors and their success stories inspires you to create your own financial success story.

best-investors-guide

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Phil Town is an investment advisor, hedge fund manager, 3x NY Times Best-Selling Author, ex-Grand Canyon river guide, and former Lieutenant in the US Army Special Forces. He and his wife, Melissa, share a passion for horses, polo, and eventing. Phil’s goal is to help you learn how to invest and achieve financial independence.