Alten Könige: The old kings of Investing

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Philip Fisher

 

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Philip Fisher is the father of investing in growth stocks. He started his own investment firm, Fisher & Company, in 1931, and managed it until his retirement in 1999 at the age of 91. Fisher achieved excellent returns for himself and his clients during his 70 year career.

Fisher focused on investing for the long term. He famously bought Motorola stock in 1955, and held it until his death in 2004. He created a fifteen point list of characteristics to look for in a common stock and were focused on two categories: management’s characteristics and the characteristics of the business. Important qualities for management included integrity, conservative accounting, accessibility and good long-term outlook, openness to change, excellent financial controls, and good personnel policies. Important business characteristics would include a growth orientation, high profit margins, high return on capital, a commitment to research and development, superior sales organization, leading industry position and proprietary products or services.

Benjamin Graham

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Benjamin Graham is most widely know for being a teacher and mentor to Warren Buffett. It is important to note, however, that he attained this role because of his work “father of value investing”. He made a lot of money for himself and his clients without taking huge risks in the stock market. He was able to do this because he solely used financial analysis to successfully invest in stocks. He was also instrumental in many elements of the Securities Act of 1933, which required public companies to disclose independently audited financial statements. Graham also stressed having a margin of safety in one’s investments – which meant buying well below a conservative valuation of a business.

George Soros

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George Soros is most commonly known as the man who “broke the Bank of England”. In September 1992, he risked $10 billion on a single trade when he shorted the British Pound. He was right, and in a single day made over $1 billion. It is estimated that the total trade netted almost $2 billion. He is also famous for running his Quantum Fund, which generated an average annual return of more than 30% while he was the lead manager.

Soros focuses on identifying broad macro-economic trends into highly leveraged plays in bonds and commodities. Soros is the odd-man out in the Top 10 Greatest Investors, has he doesn’t have a clearly defined strategy, more of a speculative strategy that came from his gut.

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