5 Key Investment Styles From Top Investors
Studying how to invest is a valuable way to become an investor. However, to become a truly successful investor, you must spend time learning from successful businessmen and women. While studying is valuable, learning by example is invaluable. This article on 5 key investment styles from top investors will give you investing ideas that you can put to work today!
While the best teacher is someone you can talk to in person, it’s still possible to get vicarious mentoring by following the blogs, books, and articles of successful investors. After Sam Walton’s death, Amazon’s founder Jeff Bezos still managed to follow his strategies closely by reading everything he could get his hands on about how Walton built WalMart into a $160 billion retail giant. It’s no coincidence that part of Amazon’s huge success is its focus on customer retention through low pricing.
Let’s take a closer look at successful people around the world who offer you an opportunity for learning how to make proper and successful investments.
Buy a Wonderful Company at a Fair Price
No article on international investment advice is complete without a word from the Oracle of Omaha. Warren Buffett is considered by many as one of the most successful investors to have ever walked the Earth. Apart from the fact that he is among the richest people in the world, his advice is sought by world leaders when it comes to developing economic policies.
“It’s far better to buy a wonderful company at a fair price,” said Warren Buffett, “than a fair company at a wonderful price.”
According to this key investment style advice, you should not expect to buy a quality company at a bargain price because you get what you pay for. If the price is low, chances are the company will not produce results. Conversely, if the price is high, it’s because the company has established a reputation for delivering on its promises to its shareholders.
Be a Long-Term Investor
Prince Alwaleed Bin Talal, a Saudi Arabian investor and the founder of Kingdom Holding Company, proved that he was a long-term investor when his stake in Citigroup in the US and his real estate in India was hit hard by the Great Recession.
“We’re getting hurt,” Prince Alwaleed Bin Talal said, “but I’m a long-term investor.”
Although it looked like a mistake at the time to hold on to his investments from 2007 to 2009, things slowly turned around and his long-term strategy helped him recover from what would have been considerable losses. His key investment style is one that the best investors in history have often used. The thinking behind this idea is that if you hold on long enough, the free market will eventually resolve its troubles and return to financial health. However, this does not mean that he never trades stock on a short or medium basis, but that he invests the bulk of his portfolio for the longer term.
Stocks That Serve the Society
Shailesh Dash, the founder and chief executive officer of Al Masah Capital Limited (AMCL), believes that an investor should serve the society in which the business operates. AMCL develops education and health because he believes that by focusing on education, it helps the younger population and by focusing on health, it helps the older population. Consequently, this type of structured help affects the whole gamut of a society.
In an interview with Abdul Basit in Khaleej Times, he said it’s better if you not only make money out of business, but also serve the society at the same time. He said that this is the target of his company for the Gulf region and in the UAE. This is a key investment style that has served Mr. Dash very well.
Look Beyond Present Market Woes
Carlos Slim from Mexico has hundreds of companies with a quarter of a million employees. He was ranked the richest man in the world from 2010 to 2013. Today, his fortune of 74.6 billion USD (2015), puts him between Bill Gates at $81 billion and Warren Buffett at 73.1 billion. His financial empire is also worth twice as much as Facebook’s founder Mark Zuckerberg, whose fortunes are estimated to be around $34.3 billion.
“I am convinced that all this poverty in Mexico and in Latin America, like it’s happening in China is the opportunity to grow,” said Carlos Slim. “It’s an opportunity for investment.”
This type of key investment style which focuses on forward thinking represents a perspective expressed by the best investors. What’s happening now is not necessarily what will happen in the future. What great investors do is invest in the momentum of a company or an entire economy for a big move while no one else is paying attention.
Key Investment Styles – The Bottom Line – Why Not the Best of All Worlds?
Each of these investors has a completely different approach, but there is no reason why you can’t adopt all these strategies because they don’t actually conflict with each other. Like Warren Buffett, you can find the sweet spot when it comes to price. Like Prince Alwaleed Bin Talal, you can invest the bulk of your portfolio for the long run. Like Shailesh Dash, you can add value to society as you build your business. And, like Carlos Slim, you can find the hidden opportunity that will lead to a colossal gain.
