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17 Investors in One Word Each

  
  Education
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#1 Warren Buffett: Focus

This is the word Warren Buffett uses to describe himself when asked about the key to his success. He focused moe on making money than most people. A lot more than Ben Graham or Charlie Munger. Focus is also a good word to describe Buffett’s investment style. He only makes big investments on big ideas. And at some times he concentrated his investment on an industry like media & advertising in the 70s or consumer products in the 80s.

 #2 Charlie Munger: Smart

I thought he’s the smartest person I knew after reading Poor Charlie’s Almanack. I like his ideas about a multi-disciplinary approach. And I like the way he waits and bets big when opportunities appear. I agree with him that diversification is to protect against ignorance. People may think he’s arrogant. I think he has earned the right to be arrogant.

 #3 Ben Graham: Lazy

Actually Ben Graham did a lot of things. He wrote a Broadway play. He read French novels. He recited Spanish poets. Investing was just one of his interests. By lazy, I mean he didn’t focus on investing as much as Warren Buffett. He wanted to find a safe system for investing. But that doesn’t mean he’s not good. He’s great. He knows where to apply his system.

 #4 Phil Fisher: Conviction

For all his life, Phil Fisher followed what he believed. He wanted to find companies with the capabilities to constantly find new products/services for growth. And when he believed he found the right company, he never sold.

 #5 Tom Russo: Long-Term

I like his investment style. He learned to buy and hold the stocks that he understood best after listening to Warren Buffett’s talk to his Stanford business school class in 1980. He mainly focuses on food and beverage companies. And he holds for very long time. He bought one of his favorites, Nestle, in 1987. And he still owns it today. (more…)

The Secrets of The World’s Greatest Traders

  
  Education
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Traders and investors have made and lost some of the world’s most significant pools of wealth.  It’s no coincidence that many of the wealthiest individuals in the world today (and through history) have been successful investors.  Names like Warren Buffet, George Soros, John Paulson, David Einhorn, Bill Gross and Sir John Templeton have become synonymous with strategies that have created astonishing success, in many case creating a groundswell of books and analysts who study their lives with a toothcomb to understand “what” the magic formula was…

Even outside these heavyweights of the trading world, hundreds of thousands of individuals around the world attest to have ‘the best‘ strategy to generate consistent positive returns (in fact, Google alone reveals over 10.4 million results when searching for best trading strategies). At a macro-level, the long-standing efficient market hypothesiswould make it notionally impossible for any trading strategy to be effective (as it asserts a level of information efficiency in the market).  The past quarter century however, has seen a gradual move away from the efficient hypothesis to greater considerations of information asymmetry and behavioral biases driving inefficiencies (opportunities) in the market.  So faced with this complexity, how do some traders generate such astonishing success?

To learn more, I spoke with Jack Schwager who is perhaps best known for his “Market Wizards” book series in which he has interviewed a cross section of the most successful traders and investors in the world.  In May 2012 Jack released the latest book in this best-selling series, “Hedge Fund Market Wizards” (a behind-the-scenes look at the world of hedge funds, from fifteen traders who’ve consistently beaten the markets).

Jack Schwager is a recognized industry expert in futures and hedge funds and the author of a number of widely acclaimed financial books. He is currently the co-portfolio manager for the ADM Investor Services Diversified Strategies Fund, a portfolio of futures and FX managed accounts. He is also an advisor to Marketopper, an India-based quantitative trading firm, supervising a major project that will adapt their trading technology to trade a global futures portfolio.  Previously, Mr. Schwager was a partner in the Fortune Group, a London-based hedge fund advisory firm, which specialized in creating customized hedge fund portfolios for institutional clients.  His previous experience includes 22 years as Director of Futures research for some of Wall Street’s leading firms and ten years as the co-principal of a CTA.

Q: Is there a strategy or style which is most effective at generating return?

 [Jack Schwager] The diversity of strategies people use is truly remarkable, I saw people using completely different strategies to the degree that if I had set out to invent 15 different strategies for a fictional work…. I couldn’t have made the strategies more different to the ones I saw in real life!  This illustrates a point I have made in all my works insofar as there really is no ‘holy grail‘ or single style that is most effective.  Those people looking for a single unified strategy are not asking the right question.

It’s a matter of finding an approach that works for the individual.  A person has to know whether they are comfortable with fundamental or technical, long term or short term, certain types of markets, wider risk or less risk… You can go through a whole checklist of things and find it’s different for each individual.

Even when looking at differences between asset classes we see that every market can be traded using different strategies be they fundamental, technical, or a mixture.  If we take equity markets we see that traders can use strategies including fundamental, value, extreme long term, and day.   If you want a microcosm that proves diversity, there it is! (more…)

Be Yourself

  
  Education
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Everyone in this business will tell you how to be and what to do, but the bottom line is that you’ve got to always be yourself – flaws, emotions, stupidity, and all.

There’s a saying that the stock market is an expensive place to figure how who you really are but I completely disagree. Through the many years I’ve been trading, I’ve learned much more about myself and the way I am both good and bad than I think I would have any other way. And, for that I’m so very grateful.

It is with little doubt that my experience in the markets have in turn made me into a much better human being. For example, one who thinks before acting, one that appreciates the importance of looking at situations from different points of view, one that knows that you can do everything right but still be wrong, one that understands the influence that emotion has on decision-making, one that remembers that no matter what mistakes you and I make today – tomorrow we will have another opportunity to do better. I’ve learned a great deal more, but I think you get the point.

Speaking of which, a number of people have asked me recently that if train people to “be more like me” in my mentorship group. The truth is that I try my darndest to never do that. My goal with those who I personally mentor is to help them become who they really are and, by extension, to take full advantage of their own personality and skills whatever they may be and at whatever level they currently are. The primary problem, however, is that many of us really believe the key to success is to be more like others whether it be Warren Buffett, David Einhorn, George Soros, Doug Kass, Jim Chanos, Whitney Tilson, Jim Cramer, or whoever you admire and respect. As you know, one of the fastest growing businesses on the Internet right now is to enable you in new and exciting ways to trade and invest just like others, but in my view, that will only take you so far in your personal journey. In the markets, sooner or later, you have to find your own path!

Each of us have our own skills, strengths, weaknesses and personalities and matching those with a strategy you can use and develop over time is the closest key to your future success that I can help you with.

Bottom line – don’t be like me or anyone else for that matter, but instead just be yourself. Use this time in your life to find ways to take full advantage of your own God-given talents and skills as you develop them. While it is ok and, in fact recommended, that you try to learn as much as you can from others (I know I have), at the same time you must also understand and appreciate that to true key to success is to find your own path just like every trader and investor who you so admire right now has already done.

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