The Masters of Investing

Important information at bottom of this page

Warren Buffett

Regarded as one of the greatest investors of all time with an estimated self-made net worth of around US$62 billion. He wrote many reports during the last 50 years during his time at Buffett partnerships and Berkshire Hathaway. These reports are invaluable for serious investors as it contains a wealth of information on Buffett’s approach to investing and business in general. Buffett’s investment approach is to look at shares as part-ownership in businesses. He ignores economic forecasting (which is futile) and dismisses the dogma that share price charts serves any useful purpose in making investment decisions.

Benjamin Graham

Author of The Intelligent Investor, the most widely acclaimed book on value investing since it was published in 1949. Warren Buffett describes it as by far the best book on investing ever written. Graham stresses that a share is not just a ticker symbol or piece of paper – it is an ownership interest in an actual business, with an underlying value which is not always the same as as its share price. Investment is most intelligent when it is most businesslike. We should imagine share quotations as coming from a fellow named Mr. Market who you can do business with on a daily basis. Mr. Market names a price at which he will buy our interest in a business or sell us his. Mr. Market’s quotations are sometimes very high and sometimes ridiculously low. We can choose to ignore Mr. Market until he comes up with attractive offers upon which we can choose to act on.

Philip Fisher

Best known as the author of Common Stocks and Uncommon Profits, a book on investing that has remained in print ever since it was first published in 1958. Investment research company Morningstar has called Philip Fisher one of the great investors of all time (2). Fisher looks at the quality of a business rather than just looking for undervalued shares in mediocre companies. Fisher’s approach is to buy companies that have disciplined plans for achieving superior long-term profit growth and that have inherent qualities making it difficult for competitors to share in that growth. He then focus on buying these companies when they are out of favour.

Kenneth Fisher

Son of Philip Fisher. He worked for his father in the early 1970s until he started his own company, Fisher Investments in 1979. In his book Super Stocks, Fisher looks at the practical aspects of identifying companies which are out of favour and uses the Price/Sales ratio in identifying possible undervalued businesses. He looks at how we can identify sustainable profit margins so that we don’t pay too much for a company during booming times. Like his father, he also looks at qualitative factors – to identify a super company which have a sustainable competitive advantage over its competition. In his most recent book, Fisher argues that we should try to get to know something others don’t – reading brokerage reports ,investment journals and annual reports is probably not good enough as the information in these reports are widely known. He also warns us that correlation does not imply causation and that we tend to jump to conclusions too fast.

Peter Lynch

Manager of the Fidelity Magellan Fund from 1977 to 1990. Lynch achieved an average annual return of 29% per year, the best performing fund in the world during this time. He is also the author of the book One Up On Wall Street in which he outlines his investment approach: Invest in small, underfollowed, easy-to-understand, easy-to-run businesses with little competition. Lynch stays away from fancy trading mechanisms such as options, futures and shorts. He doesn’t care about predicting or timing the direction of the share market. Lynch also dismisses reading charts as Buffett do. He simply looks for businesses he like and try to buy its shares at a good price.