10 Best Investors to Follow | Greatest Stock Picking Record

10 Best Investors to Follow | Greatest Stock Picking Record

Best Investors Quotes Gallery

 

Investing into the stock market attracts the greatest minds, legendary characters and those hoping to strike it rich! The goal of investing, in words of Warren Buffett is “To lay out cash now with plan to get more back in the future” but this is no easy task.

There are many styles of investing from Value Investing to Growth stock investing & even Macro Economic trading. All methods are utilised with the goal of “beating the market”…which is not easy. 

The Stock Market is an auction based system similar to Horse racing a “Pari-mutuel” system. Basically this means you can’t just invest into the “best horse (best company)” because as this information becomes known by the public, the odd’s change.

Thus generally the majority of famous investors look for a “mispricing” in the Stock Market. This is where the Stock Market has got it wrong or potentially overreacted, the volatility can equal an opportunity. 

Thus in this post i’m going to reveal the 10 Best Investors to follow, who have BEAT the MARKET! 

Which Investors are the best?

INVESTING LEGENDS GREATEST INVESTORS RETURNS STOCK MARKET JIM SIMONS OUTLIER

INVESTING LEGENDS GREATEST INVESTORS RETURNS STOCK MARKET JIM SIMONS OUTLIER. Jim Simons (renaissance technologies) Vs Warren Buffett (Berkshire Hathaway) Credit: www.motivation2invest.com/Jim-Simons

Which Investors are the best? From the scatterplot above which plots Outperformance over the market index (S&P 500) on the X Axis and Number Years on the Y Axis.

We can see clearly that Jim Simons of Renaissance Technologies is the greatest investor of all time and a true outlier. His Fund has averaged over 60% annual returns (above the Index) for over 20 years!

Warren Buffett is also one of the best investors to follow due to the amount of time he has sustained great investment returns. Buffett has achieved great returns for nearly 60 years which are approximately 12% above the market index.  

1. Warren Buffett 

Warren Buffett…the man, the myth, the legend is one of the best investors of all time & a wealthy billionaire.

He is the epitome of a classic Value investor. Valuing Companies not stocks, with an extremely disciplined approach to his trades. His strategy focuses on risk minimisation & long term investing gains.

Track Record:

This has paid of substantially with an annualised compounded portfolio return of approximately 20% since 1964, for his investing conglomerate Berkshire Hathaway.

Overall returns from 1964 to 2021 = 2,855% (approximately).

Fun Fact: If you invested $1000 in 1964 into Berkshire, that would be worth an incredible $28,855. Close to a 29X Return!

The Great thing about following Warren Buffett is he tends to do a few focused, low risk and long term investments as opposed to trading daily. 

 

Warren Buffett Quotes Gallery

 

2. Jim Simons

Jim Simons is a Billionaire Hedge Fund Manager & Legendary Mathematician. Simons is the greatest “Quant investor” in the world.  He uses quantitative analysis & computer models with complex algorithms to spot inefficiencies in the stock market & trade daily. 

Jim Simons is the MOST SUCCESSFUL INVESTOR of all time, with an average annual return of 71.4% before fee’s. This is an incredible return.

Renaissance Technologies winning strategies have been notoriously secret which has led to the nickname “the worlds most secretive hedge fund”, this truly is the smartest money in the market. 

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

Can I invest into Renaissance Technologies?  

Not exactly, Jim Simons secretive hedge fund is NOT ACCEPTING any new money and is mostly owned by employees such as leading Nobel prize winning scientists.

However, by being a Member of a platform like Invest with Legends you can view the past investments of Renaissance technologies, to access Simons full portfolio & quarterly trades.

Jim Simons Quotes Gallery

 

3. Ray Dalio

Ray Dalio is the Billionaire founder of the worlds largest hedge fund, Bridgewater associates. 

Dalio got his first taste of investing during the “nifty fifties” this was a major bull market and everyone was talking about stocks. 

He overhead many conversations while caddying at a golf club & thus saved up his wages before investing.

He bought his first stock, North East Airlines which immediately increased in price. After which Dalio was hooked on investing & fell in love with the opportunities.

all weather portfolio ray dalio 3D

all weather portfolio ray dalio 3D. Credit: www.motivation2invest.com/Ray-Dalio

Ray Dalio’s investing Strategy has a big focus on Investing internationally and diversification across stocks, industries, asset classes etc.

Investing Strategy:  Diversified, Value Investor, Emerging Markets, alternative assets, Long Term, International, Economics. 

 

Ray Dalio Quotes Gallery

4. George Soros

George Soros is one of the Best Investors & traders in the world. He has a strategy of making bold Macro economic predictions & currency trades. Soros is most famous for making $1 Billion in a single day when his bet against the British pound paid off!

George Soros Quotes Motivation 2 invest (3). Credit: www.Motivation2invest.com/George-Soros-Quotes

George Soros Quotes Motivation 2 invest (3). Credit: www.Motivation2invest.com/George-Soros-Quotes

This was nicknamed the “greatest Trade of all time” and he executed this with his former business partner & Trading Legend Stanley Druckenmiller. 

Investing Strategy:  Forex, Contrarian, Economics, Trader, Top Down

 

George Soros Quotes Gallery

5. Carl Ichan

Carl Icahn is a legendary activist investor who’s brash & outspoken Strategy of investing has made him a billionaire, with an estimated net worth of $16.7 Billion. 

As an activist investor Ichan analyses poorly run companies where he believes a change in management strategy will improve the company & increase shareholder value.  

To accomplish this Carl Icahn buys up a vast amount of shares in a company at opportune moments in order to gain voting rights for shareholders. This can even result in a hostile takeover if not approved by the board of directors or stubborn management who may fear for their jobs. 

Carl Ichan Quotes motivation 2 invest. Credit: www.Motivation2invest.com/Carl-Ichan-Quotes

Carl Ichan Quotes motivation 2 invest. Credit: www.Motivation2invest.com/Carl-Ichan-Quotes

Ironically many shareholders welcome Carl Ichan’s presence as an investor as they know he will hold management accountable for their decisions. 

Fun Fact: Carl Icahn is known for his public fights with another Legendary Activist Investor Bill Ackman. This occurred during the Herbal Life investment, where both activists took opposing positions & argued very personally on public TV!  

Investing Strategy:  Activist Investor, Contrarian, Value Investor

 

Carl Ichan Quotes Gallery

6. Charlie Munger

Charlie Munger is the Billionaire Investing legend and great friend of Warren Buffett, Buffett openly admits to learning a lot from Charlie Munger. Munger has great witt, humour but is also an exceptional value investor. 

Munger is credited to have helped Warren Buffett invest into “Wonderful companies at fair prices”, rather than just deep value investments. 

Buffett had traditionally done cigar butt strategy investing, where he looked to buy companies trading below net asset value, with “one last puff” in them. 

Charlie-Munger-Quote-4-MOTIVATION-2-INVEST-1.png

Charlie-Munger-Quote-4-MOTIVATION-2-INVEST-1.png. Credit: www.motivation2invest.com

 

Charlie Munger Quotes Gallery

7. Cathie Wood

Cathie Wood is the founder & chief investment officer at Ark invest. This is an investment firm which specialises in investing into disruptive innovation. 

With a series of active ETF’s focusing on Genomics, Robotics and even space exploration. 

She is widely regarded as the biggest Tesla bull and was known for publicly stating what seemed to be outlandish price targets for Tesla of $4000+ , back when Tesla stock was trading at just a couple of hundred dollars. 

Cathie Wood Quotes Ark Invest Tesla Credit: www.Motivation2invest.com/Cathie-Wood

Cathie Wood Quotes Ark Invest Tesla Credit: www.Motivation2invest.com/Cathie-Wood

Cathie Wood of Ark Invest is a Growth stock investor who invests into companies which offer elements of disruptive innovation. She is not afraid of making bold bet’s against the consensus (Tesla 2019) and thus can be called a contrarian.

Cathie Wood believes Wrights Law (cost declines as a function of production) is a major predictor of future technology success from decreasing costs for EV Batteries to gene sequencing becoming more affordable. 

Investing Strategy:  Growth Stocks , Technology,  Medium Term, Daily Trades, Small Cap, Medium Cap.

 

Cathie Wood Quotes Gallery

8. Michael “Big Short” Burry

Michael Burry “Big Short” is a legendary contrarian investor, he is most famous for predicting the housing bubble of 2007 and subsequent financial crisis of 2008. 

Burry’s Hedge Fund opened a “Big Short” position against the US Housing market, betting that it would fall. This contrarian bet paid off for his investors & was popularised in the Oscar winning movie “the Big Short” where Michael Burry was played by Christian Bale. 

More recently Burry has opened major short positions against stocks like Tesla and Cathie Woods Ark Invest. See Michael Burry | What stocks has he been shorting?

Fun Fact: Michael Burry is a qualified medical doctor and also has a glass eye! For more see: 8 Unbelievable Facts about Big Short Michael Burry?

Investing Strategy:  Contrarian,  Short Seller, Value Investor , Medium Risk.

 

Michael Burry Quotes Gallery

9. Mohnish Pabrai

Mohnish Pabrai is a legendary deep value investor. His strategy focuses on medium risk , high return bets. 

Pabrai is one of the few Legendary investors who invests into volatile small cap stocks which offer greater potential for returns. 

These include “10 Bagger stocks” , these are stocks which can earn 10 times your money! 

Pabrai is also a contrarian investor who likes to “fish where others aren’t fishing” and bet against the crowd. 

He does this by investing into emerging markets and areas which seem to be of higher risk such as India and Turkey. 

Mohnish Pabrai Quotes Motivation 2 invest . Credit: www.Motivation2invest.com/Mohnish-Pabrai

Mohnish Pabrai Quotes Motivation 2 invest . Credit: www.Motivation2invest.com/Mohnish-Pabrai

In his book, Pabrai calls his investing Strategy the “dhandho” which is derived from Sanskrit word Dhana which means “endeavors that create wealth”.

In Mohnish Pabrai’s own words he looks for “no brainer opportunities for high investment returns.” 

Fun Fact: Mohnish is widely influenced by the investment strategy of Warren Buffett and Charlie Munger, whom he is now good friends with after winning an auction for charity meal with Buffett many years ago. 

Investing Strategy:  Value Investor, Contrarian, Small Cap, Large Cap, Emerging Markets, International. 

 

Mohnish Pabrai Quotes Gallery

10. Bill Ackman

Bill Ackman is a legendary activist investor & billionaire, he is known for making big bets against the consensus & being right (most of the time, data later on)

His strategy was originally influenced by Warren Buffett & he considers himself value investor at heart. However, it’s clear his strategy is much bolder & more fitting to an activist investor with a specialism in credit.

Bill Ackman is known for his dogged persistence, when he believes he is right which can result in major win’s, but also some very public losses.

BEST BILL ACKMAN QUOTE MOTIVATION 2 INVEST Quotes (54)

BEST BILL ACKMAN TRADES Credit: www.Motivation2invest.com/Bill-Ackman-Trades

Between 2004 and 2021, Bill Ackman beat the market with Pershing square producing an annual return of 17.1% vs the S&P 9.8% (2004 to 20201).

However, as noted on the below performance document between 2012 and 2021 the fund has slightly underperformed the S&P 500 Index producing a 13.6% compounded return vs 15.3% for the S&P 500.

BILL ACKMAN PUBLIC TRADE RETURNS BREAKDOWN, (Win/Losses). Credit: www.Motivation2invest.com/Bill-Ackman-Trades

BILL ACKMAN PUBLIC TRADE RETURNS BREAKDOWN, (Win/Losses). Credit: www.Motivation2invest.com/Bill-Ackman-Trades

Bill Ackmans Public Trade Returns on above chart:

  • More Win’s than losses (6 out of 10 public bets)
  • Losses are Smaller than Wins
  • Net Returns are positive +$4.75 Billion minusing losses from failed public trades.

Bill Ackman has recently announced a new inflation trade, as he thinks interest rates will rise. 

 

Bill Ackman Quotes Gallery

Top 5 Metaverse Stocks to buy? | Deep Analysis

Top 5 Metaverse Stocks to buy? | Deep Analysis

Metaverse Image Gallery |Meta & Microsoft

The Metaverse is set to be the next major technology platform. This would basically be an immersive virtual world where people can live, work and play…basically a real life version of the Matrix, but hopefully without Agents trying to take you out!

The Metaverse is not necessarily a new technology in itself but it will be a combination of many cutting technologies which will intercept in the Metaverse.

These technologies include:

  • Virtual Reality (VR) 
  • Augmented Reality (AR)
  • Artificial Intelligence (AR)
  • Big Data
  • 5G technology
  • High performance computing (HPC)
  • Visualisation
  • Blockchain technology.
  • and many more!

Inside the Metaverse you will be able to meet friends, visit an NFT (Non Fungible Token) Art Museum, Buy a virtual coffee using cryptocurrency and socialise or even have a business meeting.  Thus in this post i’m going to reveal the top 5 stocks to play the Metaverse future.

Personal Background: I completed my University thesis on Augmented Reality and the Metaverse way back in 2014! 

FACEBOOK METAVERSE STOCK FACEBOOK CONNECT CONFERENCE

FACEBOOK METAVERSE STOCKS FACEBOOK CONNECT CONFERENCE. Work Reimagined. Screenshot of Facebook connect by. https://www.motivation2invest.com/metaverse-stocks/

1. META (Facebook) (MVRS)

Facebook made global headlines when they announced in October to be changing their name to “Meta” which is short for the “Metaverse”. CEO Zuckerberg stated:

“Today we are seen as a social media company, but in our DNA we are a company that builds technology to connect people and the metaverse is the next frontier just like social networking was when we go started”

Zuckerberg then proceeded to show a video clip which showed him convert to an avatar and interact with friends inside what would be the “metaverse” of the future.

Meta owns Oculus the leader in Virtual Reality Goggles which they acquired in 2014, devices such as these can also be used today with platforms such as Facebook Horizons a Virtual world where you can walk around as an Avatar, this is really the seed of what would be a full blown metaverse.

The challenge for Meta now will be to gradually reduce the size and cost of the Oculus VR Headsets in order to reach more people. Zuckerberg stated:

We continually lower the cost of our Oculus Headsets & sell below cost, bringing the price down from $399 to $299 was a strategic move to encourage people to embrace VR

FACEBOOK METAVERSE MARK ZUCKERBERG CHANGING INTO HIS AVATAR

FACEBOOK METAVERSE MARK ZUCKERBERG CHANGING INTO HIS AVATAR. Screenshot of Facebook connect by. https://www.motivation2invest.com/metaverse-stocks/

In an Interview with CNET Zuckerberg stated the Oculus Quest’s greatest strength against competition was it’s convenient wire-free design and lower cost. 

However, Zuckerberg also plans to upgrade the Virtual reality with the Quest Pro. This will include face & eye tracking and will be sensitive enough to make allowances for those with beards etc.

The idea of Quest Pro is to create the ultimate sense of “presence”. This will be at the top end price point as Zuckerberg stated “there’s some ability for it to be a little more expensive.” Meta’s overall goal is to leverage the reach of their social media platforms to increase engagement in Virtual Reality and ultimately the “Metaverse”. 

Virtual Reality Headsets still make up a small niche market with just 5.5 million headsets sold last year.

FACEBOOK METAVERSE STOCK FACEBOOK CONNECT CONFERENCE

FACEBOOK METAVERSE STOCK FACEBOOK CONNECT CONFERENCE, . Screenshot of Microsoft Mesh (Ignite conference) by. https://www.motivation2invest.com/metaverse-stocks/

What about Facebook??

Changing Facebook’s company name to Metaverse was a very bold move by Zuckerberg, as “Meta” still makes over 97% of their revenue from advertising on the social media apps (Facebook & Instagram). 

Many critics also believed Zuckerberg was distancing the company from the Whistle-blower report, where an insider released internal studies by Facebook showing

Instagram, negatively affects young users’ mental health. According to one Facebook study leaked by Haugen:

  • 13.5% of U.K. teen girls said Instagram worsens suicidal thoughts.
  • 17% of teen girls say their eating disorders got worse after Instagram use.

This is no surprise to many experts in the space which have highlighted similar issues in past studies. 

Thus Facebooks new name change has been likened to an Indian restaurant which gave someone food poisoning  and has now reopened as a Greek Restaurant with a new name. Various Memes became abundant after the name change. My Favourite was “FETA”. Credit to the unknown creator. 

 

 
 
 
 
 
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On a more serious note, the platform social media platforms are designed to be addictive. According to Business insider:

“Americans check their phones 262 times a day on average.”

App developer Peter Mezyk says Facebook and Instagram users can become dependent on apps as one would painkillers.”

and According to the Guardian.

“Social Media Copies Gambling methods to create psychological cravings”

App Blockers and screen time apps are becoming increasingly popular, a quick review of the google play store (yes I have an android) showed App blocks with over 5 million downloads.

Metrics & Financials

Meta has now split into two reporting segments:

  • Family of Apps (FoA), ( Facebook, Instagram, Messenger, WhatsApp)
  • Facebook Reality Labs (FRL), ( augmented and virtual reality, Oculus etc) 

As mentioned prior “Meta” still makes over 97% of their revenue from advertising on the social media apps (Facebook & Instagram). 

FACEBOOK ADVERTISING REVENUES

FACEBOOK ADVERTISING REVENUES. Source: Facebook Investor relations

Sales Growth is up 35% year over year and earnings per share is up 19%.

Meta’s revenue from “other” which i’m assuming includes sales of Oculus headsets is there fastest growing segment up 195% on a percentage basis. 

User growth rate is slowing

Active User growth is still growing at 6% year over year…but the growth rate is started to slow down. From a massive 10.9% (Q3 2020) which was boosted by lockdown and even prior to that  8.56% user growth was still higher. I believe this trend will continue and is also another reason for Facebooks pivot to Meta. 

  • Facebook daily active users (DAUs) – DAUs were 1.93 billion on average for September 2021, an increase of 6% year-over-year.
  • Facebook monthly active users (MAUs) – MAUs were 2.91 billion as of September 30, 2021, an increase of 6% year-over-year.

META FACEBOOK USER GROWTH SLOWING

META FACEBOOK USER GROWTH SLOWING. Source: www.motivation2invest.com/Metaverse-stocks

Statistic: Number of daily active Facebook users worldwide as of 3rd quarter 2021 (in millions) | Statista
Facebook Daily Active users. Source: Statista

Advanced Valuation Model

Diving into my advanced valuation, I completed a conservative valuation of Meta assuming the follow:

  • Revenue Growth Rate decrease from 35% to 25% (2022)
  • Compounded Growth rate (next 2 to 5 years) 20%
  • Pretax operating margin increase to 44% up from 42.36%

The company also has $58 Billion in cash so plenty of dry powder read to invest into the metaverse. 

VALUATION MODEL FACEBOOK META STOCK ASSUMPTIONS

VALUATION MODEL FACEBOOK META STOCK ASSUMPTIONS. Download all valuation models for over 65+ stocks on our stock research platform. 

META STOCK VALUATION ANALYSIS UNDERVALUED

META STOCK VALUATION ANALYSIS UNDERVALUED. Download all valuation models for over 65+ stocks on our stock research platform. 

According my advanced valuation model, I get a fair value for Meta stock (Formerly Facebook stock) of $537 per share, the price is currently just $335 thus the stock is undervalued.

Great Founder & Fast Follow Strategy

GREAT FOUNDER MARK ZUCKERBERG (12% stake) and MANAGEMENT (Sheryl Sandberg) .

Zuckerberg is the founder of Meta, he is a humble visionary and a strategic genius. Zuck follows a very similar strategy to Microsoft in the late 90’s, “Fast Follow”. When a new competitor product starts to gain traction, Meta (formerly Facebook) try’s to acquire or just copies fast. Examples 

  • INSTAGRAM (ACQUISITION)
  • Oculus (Acquisition)
  • Whatsapp (Acquisition)
  • SNAPCHAT (Copy with Instagram stories) ,
  • TIK TOK  (Copy with Instagram REELS),
  • YOUTUBE (IGTV).
  • Clubhouse (Facebook Rooms) 

For me the future of Facebook is a bet on the execution skills of Mark Zuckerberg and his ability to continually pivot the company, as he has done previously. If Zuckerberg left (which i don’t think he will) , I would seriously consider selling the stock.

This is not financial advice and there is still the risk of Meta core social media platforms, starting to decline and the chance that the “metaverse” is not widely adopted. In my eyes, a bet on Meta is a bet on the skills of Zuckerberg to pivot once again. 

Stock 2. Microsoft (MSFT)

Microsoft also will be a major player in the creation of the Metaverse. 

MICROSOFT MESH METAVERSE VIRTUAL REALITY

MICROSOFT MESH METAVERSE VIRTUAL REALITY. Screenshot of Microsoft Mesh (Ignite conference) by. https://www.motivation2invest.com/metaverse-stocks/

CEO Satya Nadella stated at Microsoft Ignite (Nov 2021):

As the Digital and Physical Worlds come together we are creating an entirely new platform called the Metaverse

The Metaverse enables us to embed computing in the real world and to embed the real world into computing, brining real presence to any digital space.

No Longer just video conferencing with colleagues you can be with them in the same room

Microsoft owns Virtual Reality platform (HoloLens), Gaming Platform Xbox and Microsoft Teams.

Microsoft Teams saw a huge increase in users during lockdown:

  • From 20 million users in November 2019 to 44 million in March 2020, then 75 million by April.
  • June 2021, Microsoft teams has 145 million daily active users.
  • According to data from digital experience company Aternity, Microsoft Teams growth surpassed Zoom from February to June.
  • Microsoft Teams generated an estimated $6.8 billion in revenue in 2020, a 700 percent increase year-on-year

Screenshot of Microsoft Mesh (Ignite conference) by. https://www.motivation2invest.com/metaverse-stocks/

MICROSOFT MESH METAVERSE VIRTUAL REALITY. Team meetings of the future Screenshot of Microsoft Mesh (Ignite conference) by. https://www.motivation2invest.com/metaverse-stocks/

Microsoft announced, Mesh for Microsoft Teams which will allow a shared immersive experience directly in teams. The beautiful thing about Microsoft’s Metaverse environment is it is directly accessible seamlessly through teams, leveraging the huge  (145 million) daily active users.  This also removes the friction associated with the platforms.

Inside Mesh Users will be able to interact as a virtual avatar with others and the idea according to Satya Nadella is to replicate the “Water Cooler” style chat.

The Avatars also show real time facial expressions to create that sense of presence. The platform has lots of potential for “Virtual team” gatherings as many companies are going remote. 

Microsoft is Number 2 player in Cloud Computing Microsoft Azure, thus has plenty of capacity to run platforms at scale. 

MICROSOFT MESH METAVERSE VIRTUAL REALITY. Work place collaboration of the future

MICROSOFT MESH METAVERSE VIRTUAL REALITY. Work place collaboration of the future, Team brainstorming ideas on a whiteboard similar to the real world. Screenshot of Microsoft Mesh (Ignite conference) by. https://www.motivation2invest.com/metaverse-stocks/

Microsoft Business Model

Microsoft’s revenues:

  • Cloud services (No 2 Player Azure),
  • Productivity software (Windows 365, Teams)
  • More Personal Computing ( hardware, software, and gaming systems.) (Xbox, HoloLens etc) .

Microsoft’s cloud solution, brings in more revenues than its Windows operating system and witnessed exponential growth during lockdown! Sales Surged by over 50% year over year. Q3 2021, Cloud revenue up 33% year over year.

Microsoft 365 had 300 million paid seats in Q3 2021 and Microsoft Office, the company’s productivity suite, has over 50 million subscribers.

Microsoft Financials & Valuation

Earnings Release FY21 Q3

  •   Revenue was $41.7 billion and increased 19%
  • Operating income was $17.0 billion and increased 31%
  • $136 Billion in Cash!

MICROSOFT VALUATION MODEL PART 1. FINANCIALS

MICROSOFT VALUATION MODEL PART 1. FINANCIALS. Download all valuation models for over 65+ stocks on our stock research platform. 

Below I have completed conservative estimates of future growth:

  • 20% Revenue Growth for next year (Similar to prior 19%)
  • Reduce to 15% thereafter 

MICROSOFT VALUATION MODEL PART 2. GROWTH ESTIMATES

MICROSOFT VALUATION MODEL PART 2. GROWTH ESTIMATES. . Download all valuation models for over 65+ stocks on our stock research platform. 

 

MICROSOFT STOCK VALUATION MODEL PART 3. Stock Overvalued

MICROSOFT STOCK VALUATION MODEL PART 3. Stock Overvalued/ . Download all valuation models for over 65+ stocks on our stock research platform. 

From the above valuation Microsoft Stock looks to be 26% overvalued. 

Stock 3. NVIDA (NVDA)

Nvidia (NVDA) is a market leader in Graphics cards (Gaming), Data centres, Visualisation & Artificial Intelligence. NVIDIA could be the technological backbone behind many future Metaverse platforms. In August 2021, NVIDIA Announced the Omniverse:


“We are thrilled to have launched NVIDIA Omniverse, a simulation platform nearly five years in the making that runs physically realistic virtual worlds and connects to other digital platforms.

We imagine engineers, designers and even autonomous machines connecting to Omniverse to create digital twins and industrial metaverses,” 

The company is growing rapid.

  • Q2 revenue $6.51 billion, up 68% Year over year.
  • Record Gaming revenue of $3.06 billion, up 85% Year over year.
  • Record Data Center revenue of $2.37 billion, 35% Year over year.

NVIDIA STOCK FAIRLY VALUED

NVIDIA STOCK FAIRLY VALUED. . Download all valuation models for over 65+ stocks on our stock research platform. 

From my valuation Model using conservative growth estimates of 50% next year and 40% for the next 2 to 5 years NVidia Looks fairly valued. 

Stock 4. ROBLOX (RBLX)

Roblox is the popular online gaming platform which saw growth accelerate during the lockdown! The platform has over 43.2 million daily active users and its own Virtual currency (Robux). Inside the game players can use their “Robux” to buy items for their Avatar and even purchase tickets to unique experiences. 

For example in 2020, there was a live digital concert by Lil Nas X.

Roblox is also building a community of developers to build on top of the platform, many developers are making very good money building for the platform currently. 

With 1.3 million developers on track to earn $500 million collectively from their developed apps in 2021.

Roblox stock analysis

Roblox stock analysis. Image credit: Appleinsider.com

 The stock popped by 42% today after revenue doubled in Q3 2021. 

Roblox stock up 42%

Roblox stock up 42%.

I previously covered Roblox Just after their IPO. Video Below

Stock 5. UNITY (U)

Unity is a Leading game development engine which could be the backbone for the future Metaverse. 

  • Gaming: Pokemon Go, partnerships with UBISOFT (Assassins creed identity mobile game) , League of Legends (Mobile) escape plan, temple run.
  • Partnerships: Facebook Integration for unity developers to create games. This could be a major catalyst for the stock now Facebook has gone all in on the “Metaverse”

Google partnership with android for Augmented Reality games. 

2 Million Monthly users with 15,000 new projects started daily. SEQUOIA CAPITAL INVESTED (Although they would have gotten a much better deal)

Unity Stock

Unity Stock. Image credit: Studica.com. 

I completed my University thesis on Augmented Reality and the Metaverse way back in 2014, I used the Unity platform for my project.

Matterport Stock – Bonus: Speculative VR stock

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How to make $1 Billion in a day? | Stanley Druckenmiller Top 10 Trading Quotes |

How to make $1 Billion in a day? | Stanley Druckenmiller Top 10 Trading Quotes |

Stanley Druckenmiller is a legendary trader with an estimated net worth of $6.6 billion.  Investing Strategy:   Contrarian, Economics, Trader, Momentum Trader

How did Stanley Druckenmiller make his money?

Stanley Druckenmiller made his money running hedge funds such as Duquesne Capital which he ran from 1981 to 2010. At the time of closing Duquesne Capital had over $12 billion in assets under management.

Stanley was also the head portfolio manager of the Quantum Fund, founded by the Legendary investor George Soros.  Druckenmiller is reported to have made $260 million in 2008 alone. These days he manages his wealth through Duquesne Family Office, a New York-based investment group which he started with $3 billion in 2010.

What has Stanley Druckenmiller invested into?

Druckenmiller has been bullish on tech stocks recently. He has large investment stakes in Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN), and Alphabet Inc. 

Greatest Trade of all Time

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

Druckenmiller is most famous for executing what has been called the “greatest trade of all time” in which he made up $1 Billion in a single day!

This was accomplished by a bold bet against the British pound during the early 90’s when Stanley Druckenmiller was at the Quantum Fund with another Legendary investor George Soros

How to make $1 Billion in a day?

In 1979, Many European countries decided to link their currencies together at a fixed rate. This was called the Exchange Rate Mechanism (“ERM”). This was a band of rates that each currency had to remain within.

The idea was to hedge currencies against exchange rate fluctuations, which could harm European Trade.

The National banks of the various countries were given the job to keep their country’s currency in the allocated band. For example, If selling volume was high and pushed the rate down, the banks had to buy. If buying was strong, they had to sell to keep the rate stable.

In 1990, Britain joined the ERM (despite Prime Minister Margaret Thatcher being strongly opposed). 

Thatcher proceed to resign and John Major (a major advocate ERM) became Prime Minister. Afterwards Britain entered a recession.

The Bank of England needed to cut interest rates it order to lower the cost of borrowing & stimulate the economy…but their hands were tied by the currency peg.

Lowering interest rates would have devalued the British pound and forced the country to exit from the ERM. The Bank of England was forced to continually go into the open market and purchase British pounds to keep the peg in check. 

In 1992, Stanley Druckenmiller & George Soros saw the opportunity. It was obvious at the time the British Pound was in trouble and most believed a devaluation was coming at some point. There was just one issue, no catalyst…thus Soros & Druckenmiller decided they would be the catalyst! 

Stan Druckenmiller and George Soros (Quantum Fund)

Stan Druckenmiller and George Soros (Quantum Fund)

Breaking the Bank of England:

Quantum fund started to short the British pound. This involved selling British pounds which were borrowed from banks and then using the proceeds to buy German marks. The idea was to be able to buy back British pounds cheaper & then return what he borrowed.

Soros & Druckenmiller started with a modest $1.5 billion short, but rates didn’t move.

Then news broke out, September 16, 1992, the German Bundesbank president said he didn’t rule out some currencies coming under pressure.

Soros & Druckenmiller saw this as sign to turn up the heat. They built their short position to a massive $10 billion! 

With this flood of selling hitting the market, the British pound came under tremendous pressure to “break the Buck” (the currency peg).

The Bank of England entered chaos. They purchased 27 billion on the open market to try and stop the currency change. But the pressure from the $10 Billion short was too much to bear. At 7pm September 17th 1992, Britain announced it would leave the ERM and would allow the devaluation of the British pound.

This date would forever be known in history…as Black Wednesday.

Top 10 Stanley Druckenmiller Quotes

10. “Go for the Jugular”

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

“Soros has taught me that when you have tremendous conviction on a trade you have to go for the jugular” – Stanley Druckenmiller (Billionaire Trader)  . When Druckenmiller originally brought the idea of shorting the British pound to Soros, Soros urged him to bet huge as it was a high conviction bet. 

9. Take Low Risk, High Reward Bets

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

“It’s not about whether your right or wrong but how much you win or lose either way” – Stanley Druckenmiller (Billionaire trader). Investing or Trading is a game of probabilities, we are looking to take bets with a low risk, high reward profile. Billionaire Investor Ray Dalio call this an asymmetric Risk/Reward Ratio. Value investor Mohnish Pabrai calls this Dhando Investing.

8. Hit Home Runs then Preserve capital

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

“The way to build wealth is through preservation of capital and home runs” – Stanley Druckenmiller (Billionaire Trader) . This investing quote is a slight contradiction, as hitting “home runs” usually involves a different strategy then capital preservation.

Perhaps this is similar to the “barbell” investing strategy. One side is very low risk investments (Index funds, Real estate which generates cash flow etc) then the other side is high risk investments. 

7. Bitcoin is worth what people will pay

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

“Bitcoin is like anything else in the world, it’s worth what people will pay for it” – Stanley Druckenmiller . Druckenmiller was previously sceptical of bitcoin but has now flipped and says it’s better than gold! He goes onto say:

“Bitcoin could be an asset class that has a lot of attraction as a store of value to both millennials and the new West Coast money and, as you know, they got a lot of it”.

 Druckenmiller expects bitcoin bet to “work better” than gold. However, he did state his gold position is “many, many more times” larger than his current bitcoin holding.

6. What do people think it will earn?

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

 
“What a company has been earning doesn’t mean anything, you have to look at what people think it can earn” – Stanley Druckenmiller (Billionaire Trader). 
 
Druckenmiller is referring to a “Keynesian Beauty contest” where the judges don’t pick which person is most beautiful personally, but who they think other people will pick. Benjamin Graham calls the stock market a “voting machine” or popularity context in the short term.
 

5. Play Investing Game 

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

Stanley Druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

“I’ve always loved to play games, investing is a game…you need to be decisive, open minded & flexible” – Stanley Druckenmiller (Billionaire Trader) .

4. Good Investing is not about IQ

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

“Good Investors are successful not because of their IQ…but from their discipline & intuition”  – Stanley Druckenmiller (Billionaire Trader) . Surprisingly this is a common trait i’ve noticed from many investing legends, Warren Buffett has a similar quote.

The good news I can tell you is that to be a great investor you don’t have to have a terrific IQ. If you’ve got 160 IQ, sell 30 points to somebody else because you won’t need it in investing. What you do need is the right temperament.”  – Warren Buffett

3. Have Courage in your Convictions

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

“It takes courage to a be pig, to ride profits with huge leverage” – Stanley Druckenmiller (Billionaire Trader). Courage is your convictions is a strong trait of major success.

2. Put all your eggs in ONE Basket! 

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

 The common wisdom from academic finance is to diversify your portfolio across as many stocks and countries as possible.
 
However, many legendary investors such as Stanley Druckenmiller, Warren Buffett and Bill Ackman believe in a more concentrated approach.
 
The reason is simple, it is impossible to know “everything about everything”, thus investing into area’s where you have some special insight or an edge can give you an advantage. Rather than “don’t put all your egg’s in one basket” , “Put all your egg’s in one basket & watch that closely”.

1. Invest with Legends

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

Stanley druckenmiller quotes (1).Credit: www.Motivation2invest.com/Stanley-Druckenmiller-Quotes

Stanley Druckenmiller is now an investing Legend, but he previous invested with another Legend George Soros

Want to Learn how to invest like Legends?

Many members of the Motivation 2 Invest community also have this passion and this drive to learn more each day. If you want to learn how to become a great fundamental investor or just join our thriving VIP Group. Check out the link herehttps://www.motivation2invest.com/product/stock-investing-course/  

 
 We open the course to a limited number of members each month so be sure to reserve your spot now. Good Luck! 

Stanley Druckenmiller Quotes gallery x 10 

Top 10 Joel Greenblatt Quotes  | Magic Formula Investing Strategy

Top 10 Joel Greenblatt Quotes | Magic Formula Investing Strategy

Joel Greenblatt is a legendary Value investor with a net worth of approximately $500 Million. Joel is a classic value investor and is style has been widely influenced by the teachings of Benjamin Graham and Warren Buffett.  Investing Strategy:  Value Investor, Long term, Small Cap, Large Cap, Quantitative Investor

How did Joel Greenblatt Make his Money?

Joel Greenblatt is a hedge Fund manager and thus made his money from the fee’s charged to clients, in addition to his own investing gains. Greenblatt started his first hedge fund Gotham Capital with $7 million provided by the “Junk Bond King” Michael Milken. 

Gotham Capital had some incredible investment returns of 50% compounded annually (after most expenses) and 30% (Minus all fee’s) between 1985 and 1994.

Greenblatt’s Hedge Fund specialized in “special situations” such as spinoffs and other corporate restructurings. A “Spinoff” is where a large company will create an independent business from a smaller part of the firm.  For example, Ebay spun off Paypal in 2015. 

Gotham Asset Management:

  • In 1995 Gotham returned all capital of outside partners (approximately $500 million).
  • In 2008 Gotham Asset Management was created as “the successor to Gotham Capital”.
  • In 2010, Gotham started four mutual funds and raised $360 million. By 2014, the mutual funds managed over $1 billion.
  • By 2014, this had increased to $4.8 billion thanks to new money inflows before peaking at around $13.1 billion in March 2015.
  • In 2021 portfolio value stands at $2.36 Billion. 

As value investing has underperformed over the past few years, the fund has gradually seen outflows and now the portfolio value stands at $2.36 Billion as of 2021. 

What is Joel Greenblatt’s Magic Formula?

Joel Greenblatt’s Magic Formula is a quantitative method of investing into the stock market. The Magic Formula was popularised in his best selling investment book “The Little Book which beats the market”.

The formula works by screening for stocks with a low Price to earnings ratio (P/E) but also high returns on capital. Generally these two metrics offer a simplified method of buying “cheap stocks of good companies”.

Here is how the Magic Formula works:

1. Screen Stocks for Low P/E Ratio and High Returns on Capital (For example P/E Ratio less than 10, and Return on capital above 15%.) 

2. Buy the top 20 of these stocks for diversification

3. Hold for one year (no matter what) 

4. Then sell and repeat back to step 1.

The idea behind the Magic Formula is it removes the psychological biases (Greed, Fear, Fomo) etc which often causes investors to buy and sell stocks at the wrong time, for example during a stock market crash.

Multiple studies have shown simply buying cheap stocks with low price to earnings ratio’s & high returns on capital can outperform the market index. 

Joel Greenblatt Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

Joel Greenblatt Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

Does Magic Formula Investing work?

Greenblatt created the world famous “Magic formula” which is a systematic method of buying stocks with a low price to earnings ratio, high returns on capital and a few more metrics.  A back-test of the Magic formula showed it returned an average of 33% compounded over the past 16 years, beating the market! 

Magic_formula_book_Joel Greenblatt

Magic_formula_book_Joel Greenblatt. Credit: The Little Book which beats the market.

However, it is clear to see the Magic formula does not beat the market every year and in recent years Momentum investing strategies have outperformed traditional quantitative value approaches. 

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

Why be a Value Investor?

When asked, why he is a value investor? Greenblatt replied it seems the only logical way to invest. He gave the following example:

“If you were going to invest into a house what would your process look like? Would you buy the most expensive house…where the price had gone up recently? (that is Momentum trading)  Or Would you look for a house which is trading for less than others in the area? (Relative valuation) Or Which had rental cash flows could calculate a payback period? That is Value investing. (Intrinsic Valuation)

Greenblatt & Michael Burry (Big Short):

Gotham Capital helped “Big short’s” Michael Burry create his Legendary hedge fund Scion Capital in the year 2000. Greenblatt purchased 25% of its capital for one million dollars after all taxes.

By October 2006, Gotham’s investment in Scion Capital amounted to $100 million! Now this is where things get interesting…Burry was controversially betting against the US Housing Market (Big Short). However, Greenblatt didn’t like this strategy (even though it did ultimately pay off!).

Thus Greenblatt and other investors wanted their money back. Now in the “Big Short” Movie “Lawrence Fields” (played by Tracy Letts) is meant to represent the investors who were invested with Burry such as Greenblatt.

Although the physical resemblance is not similar to Joel Greenblatt. This character is a fictional version meant to represent him and other disgruntled investors. I suppose Michael Burry doesn’t look like Christian Bale either. 

Lawrence Fields (played by Tracy Letts) Big short. Although the physical resemblance is not similar to Joel Greenblatt. This character is a fictional version meant to represent him and other disgruntled investors. Source: www.motivation2invest.com/Joel-Greenblatt-Trades

Lawrence Fields (played by Tracy Letts) Big short. Although the physical resemblance is not similar to Joel Greenblatt. This character is a fictional version meant to represent him and other disgruntled investors. Source: www.motivation2invest.com/Joel-Greenblatt-Trades

After the dispute with Gotham Capital & Greenblatt, Burry used a special provision in his prospectus to “side pocket” or block withdrawals which amounted to approximately 55% of Greenblatt’s investment!

Not surprisingly this amount corresponded to his “Big short bet” (Credit default swaps) which were then losing money. Gotham Capital even threatened to sue Burry for blocking the withdrawals. Despite the pressure Burry held on until he was in profit on August 31, 2007 as the housing market crashed. 

Scion Capital fund was then up by over 100%. Gotham Capital exited its investments. Joel Greenblatt must be kicking himself at the missed opportunity.

Top 10 Quotes by Joel Greenblatt

10. The Magic Formula

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

A back-test of the Magic formula showed it returned an average of 33% compounded over the past 16 years, beating the market! 

9. Understand Mr Market

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

“In the short term Mr Market sets prices with emotion, in the long term prices revert to value” – Joel Greenblatt (Value Investor)  Benjamin Graham the father of value investing uses the analogy of Mr Market to explain the stock market. Mr Market is like a bipolar person who wakes up every day, either very optimistic or pessimistic.

Each day he knocks onto your house door and gives you a quote to buy your house. When Mr Market is feeling optimistic he will offer alot and when pessimistic he will offer a little. The trick for investing success is to only do business with Mr Market when it benefits you. As Sir John Templeton said “Be a realist, Buy from the pessimists and sell to the optimists”.

8. Stock Prices move faster than business value

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

“Stock Prices move wildly in short periods, this doesn’t mean the value of the business had changed much” – Joel Greenblatt.

7. High Returns on Capital

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

“Companies that achieve a high return on capital have a special advantage of some kind” – Joel Greenblatt (Value Investor) . Return on capital is a metric which measures how well a company reinvests and the return they achieve. For example, for every $1 invested how many dollars does the company get back, $2, $3 etc. 

Generally a companies “competitive advantage, moat” or pricing power can show up in the metrics such as Return on Capital.

For example, Amazon has consistently invested well and achieved a return on capital of 20% historically and 10% now. This is good but a company like Apple has done even better with a Return on Capital of 48.3%!  This reflects Apples strong pricing power and efficiency improvements. 

Formula for Return on Capital

Return on Capital (ROC) = (Net Income-Dividends)/(Debt+Equity)

For Example: A small public company has $100,000 in net income with $600,000 in total debt and $100,000 in shareholder equity. Plugging into the Return on capital formula, ($100,000 Net Income- zero Dividends) divided by ($600,000 + $100,000) = ROC. Thus the Return on Capital is 14.3%.

What is a Good Return on Capital?

Generally a return on capital over 10% consistently is good, 15% to 20%+ is great. Apple has historically had a return on capital of over 39% which is incredible! 

6. Be a Value Investor

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

“The secret to investing is to figure out the value of something then pay alot less” – Joel Greenblatt (Value Investor).

This is obvious secret of value investing. As the father of Value Investing Benjamin Graham once said, a stock is a portion of a company. Thus the strategy with value investing is to value a company then buy below that fair value with a margin of safety.

Want to learn how to Value Stocks?

If you want to learn how to value stocks like Buffett, but with a growth twist check out our: Investing Strategy Course

 

5. Assess Risk First

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

“Look down not up when making your initial investment decision, focus on not losing money then let the upside take care of itself” – Joel Greenblatt (Value Investor) It is very easy to focus on the upside when making an investment decision, thinking about all the money you could make.

However, that is usually the most dangerous way to invest. Great Value Investors assess the risk first and aim to mitigate that. If the worst case is you lose 1x and the best case is a 4x then that is usually a great bet to take. This is an asymmetric risk/reward ratio, as Billionaire Hedge Fund manager Ray Dalio would call it. 

4. Value always prevails

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

When speaking to his MBA students during an investment class, Greenblatt stated: “I Guarantee a stock will revert to it’s value at some point…but I can’t guarantee when” .

This is one of the most difficult parts of value investing, even if you know a stock is undervalued or overvalued, there is no way of knowing when the stock market fundamentals will correct.

Thus it’s generally best to look for some kind of “catalyst” which could cause the stock to correct to fundamentals this could be a news update, financial update or business update. 

3. Know what you own

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

“Putting all your eggs in one basket and watching that basket closely is less risky than you may think” – Joel Greenblatt (Value Investor) . Many business schools teach “Diversification” as a key fundamental investing strategy.

However, Many Legendary investors including, Warren Buffett, Charlie Munger, Mohnish Pabrai, Seth Klarman and of course Joel Greenblatt believe the opposite. It’s not that diversification doesn’t work, it’s just difficult to diversify and also know everything about each investment.

A focused portfolio allows you to gain deep insight into one area and make decisions to “load up the truck” when the odd’s are in your favour. (This is not financial advice)

  2. Invest Long Term

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

“Having a 3 to 5 year horizon for your stock investments should give you an advantage over most others” – Joel Greenblatt (Value Investor). Most people are too short term focused especially when stocks crash.

Despite many stock market crashes from the great depression in the 1930’s, to Black Monday in 1987, Dot Com Bubble (2000), Financial Crisis (2008), Pandemic Crash (2020). The stock market has crashed and risen once again. 

History of Stock Market Crashes

History of Stock Market Crashes

1. Learn to Invest, don’t gamble

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

Joel Greenblatt Quotes Magic Formula for Investing. Credit: www.Motivation2invest.com/Joel-Greenblatt-Quotes

“Picking stocks randomly is like running through a dynamite factory with  burning match…you may live, but your still an idiot!” – Joel Greenblatt (Value Investor). This is a classic case of “Survivorship bias” lets say somebody invests randomly into a crazy crypto token because they heard someone talking about it on mainstream news and it 10X’s in price and makes them a Millionaire.

Does that mean it was a good strategy? Not so as if they continued their strategy of investing blindly then in the end it would fail. Luck plays a role in every investment outcome so it’s best to focus on having a solid process.

Want to learn how to Value Stocks?

If you want to learn how to value stocks like Buffett, but with a growth twist check out our: Stock Research Platform    

Joel Greenblatt Quotes Gallery x 10 | Magic Formula 

Top 10 Trader Quotes by Jim Simons | Worlds Most Secretive Hedge Fund

Top 10 Trader Quotes by Jim Simons | Worlds Most Secretive Hedge Fund

Jim Simons is a Billionaire Hedge Fund Manager & Legendary Mathematician. Simons is the greatest “Quant investor” in the world.  He uses quantitative analysis & computer models with complex algorithms to spot inefficiencies in the stock market & trade daily. 

Jim Simons is the MOST SUCCESSFUL INVESTOR of all time, with an average annual return of 71.4% before fee’s. This is an incredible return.

Renaissance Technologies winning strategies have been notoriously secret which has led to the nickname “the worlds most secretive hedge fund”, this truly is the smartest money in the market. 

Who is the Smartest Billionaire?

Jim Simons was nicknamed “The Worlds Smartest Billionaire” by Forbes. However, it wasn’t always obvious he would be. As a Teenager in Massachusetts he worked in the basement of a garden supply store and was terrible at the job. Simons Stated “I was terrible I couldn’t remember where anything went”.

The owners of the store asked him what he wanted to do in the future, he said “I want to study Math at MIT” of course they laughed at him and thought he was crazy. 

At the age of 17 (1955) Simons joined MIT and finished a four-year program in just three years before heading for UC Berkeley for his Ph.D. in mathematics in 1962, at the age of just 23.

A couple of years later he was hired (and then fired) as a code breaker for the Pentagon’s secret Institute for Defense Analysis (IDA) at Princeton. Simons next became the chair of the Math Department at Stony Brook University where he and a colleague (Shiing-Shen Chern) published a paper which had a major influence on theoretical physics. Afterwhich Simons Started the worlds most successful and secretive hedge fund Renaissance technologies. 

When did Jim Simons start Renaissance Technologies?

Simons started Renaissance technologies 1978, this was one the first quantitative funds, which used algorithms & model-based trading. Simons originally focused on trading in commodities and currencies. before expanding his criteria to anything which is “Publicly Traded, Liquid and Amenable to modelling”. 

The Medallion Fund became the world’s most successful hedge fund producing a compounded annual return of 71.4% (1994 to 2014). 

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

Who is the richest Mathematician?

Jim Simons is the richest Mathematician in the world with a net worth according to Forbes of $24.4 Billion (2022). Simons made his fortune as the founder of Renaissance technologies the worlds most successful and secretive hedge fund. This fund averaged a 71.4% compounded return annually between (1994 and 2014). If you invested $10k with Simons you would have made an incredible $2.2 million in 10 years. 

What is Jim Simons Algorithm?

Jim Simons algorithm is a combination of historical, Real time, Fundamental, Technical and Economic Data. The algorithm is part of a quantitative model and although very secret it is thought to involve modelling of various assets, identifying trends and trading on market inefficiencies, which may only last a split second.

When asked for more details on the algorithmic model Simons stated: 

“Of course we can’t show you our model, that would be like Buffett telling you what stocks he’s about to buy” – Jim Simons (Billionaire Trader). 

Is Jim Simons Better Than Warren Buffett?

In terms of pure investment returns, Jim Simons is better than Warren Buffett. Jim Simons Medallion Fund averaged an incredible 71.4% compounded return annually between (1994 and 2014). Whereas Warren Buffett’s investment conglomerate earned “only” over 20% per year compounded. Both are incredible returns massively outperforming the S&P 500 index which averaged a 10.2% annual return.

However, it must be stated both Jim Simons & Warren Buffett have very different investing strategies, they are really complete opposites. Buffett focuses on the “Value Investing” strategy pioneered by Legendary investors like Benjamin Graham . In value investing a business is valued (a stock is a portion of a company), then the goal is to buy below that fair value (ideally with a margin of safety). Buffett has often stated he buys “stocks which wouldn’t bother him if the stock market closed for 10 years.”

Whereas, Jim Simons is the complete opposite, Simons uses advanced algorithms and computer models to detect market trends and mispricing’s then trades daily on these. 

INVESTING LEGENDS GREATEST INVESTORS RETURNS STOCK MARKET JIM SIMONS OUTLIER

INVESTING LEGENDS GREATEST INVESTORS RETURNS STOCK MARKET JIM SIMONS OUTLIER. Jim Simons (renaissance technologies) Vs Warren Buffett (Berkshire Hathaway) Credit: www.motivation2invest.com/Jim-Simons-quotes

The graph above shows greatest investing Legends of all time, by what percentage they have outperformed the index (X axis) vs the Number of years (Y Axis).

We can see Jim Simons is a true outlier with over 60% compounded returns (above the S&P 500 Index) for over 20 years. 

This was calculated till when the fund closed to outside capital. But the fund is still producing returns. Warren Buffett has show fantastic returns of approximately 13% (Above the S&P 500 Index) for nearly 60 years! 

Can I invest into Renaissance Technologies?  

Not exactly, Jim Simons secretive hedge fund is NOT ACCEPTING any new money and is mostly owned by employees such as leading Nobel prize winning scientists.

However, by being a Member of a platform like Invest with Legends you can view the past investments of Renaissance technologies, to access Simons full portfolio & quarterly trades.


9. Bring Smart People Together

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

When Jim Simons was asked the secret of the worlds most successful hedge Fund (71.4% Annual Returns), Simons stated: “Good Atmosphere and Smart People can accomplish alot” – Jim Simons (Renaissance Technologies)

8. Learn from History

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

“Past Performance is the best indicator of success” – Jim Simons (Renaissance Technologies) . Simons uses a vast amount of historical stock & economic data in order to help make predictions of the future. Now although History doesn’t always repeat it does rhyme. At Renaissance they are looking for trends & patterns which may only last a few seconds, to trade with their edge. 

7. Which Stocks to Trade?

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

“We have three criteria, if it’s publicly traded, liquid and amenable to modelling, we trade it” – Jim Simons (Renaissance Technologies). Basically from Jim Simons criteria this is almost every publicly traded stock above a small market cap.

Thus they have over 2,900 stocks to choose from on the NYSE and 3,300 on the Nasdaq. If they invest internationally also the possibilities are even greater. 

6. Predicting the Future

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

“One can predict the course of a comet easier than Citigroups stock, but you can make more money on the later” – Jim Simons (Billionaire Trader) . At Renaissance Technologies they are really trying to predict the future! But this is no easy task.

In fact although phrased as a joke, Simons is correct in saying it’s easier to the predict the course of a comet or even the movement of planets than a stock. Planets and Comets tend to follow orbits and are quite easily predictable from the gravitational fields. However, the stock market is “close” to random, I say “close” to random as there are small patterns which Renaissance exploits to make billions of dollars. 

5. The Role of Luck

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

“Luck plays a meaningful role in everyone’s lives” – Jim Simons (Billionaire Trader) . Luck is apart of life and like it or not all great success to some extent. From the studies of success here on this website I have come to the conclusion, it is best to do everything you can control then let luck play out with the rest. 

4. Luck & Investing Success

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

“In Business it’s easy to confuse luck with brains” – Jim Simons (Billionaire Trader) . There is a phenomenon called “Survivorship Bias” for example, if somebody does a risky illogical trade and makes millions (lets say investing into a crazy crypto token on whim).

They may “look” like a genius but really they were just immensely lucky.  The trick is not to confuse the too as that can be very dangerous, if the person does believe they are a trading genius they may continue the risky strategy until they go to zero. Just like gambling in a Casino. 

3. Good Things don’t last forever

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

“There is no such thing as the goose which lays the golden egg forever” – Jim Simons (Billionaire Trader).Good things (or even bad things) for that matter tend not to last forever, things tend to revert to the mean. This could be stock price, a successful business or even a relationship! The positive of this is continuous improvement can help to adapt and keep the golden goose strong. 

2. Continuous Improvement (Kaizen)

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes.

“The System is always leaking & we keep adding water to stay ahead of the game” – Jim Simons (Billionaire Trader) .  As mentioned previously the golden goose doesn’t lay egg’s forever, continuous improvement is the key to stay ahead of the game. There is a Japanese Manufacturing philosophy called “Kaizen” which pioneered the art of continuous improvement. 

1. The Secret Trading Model

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

Jim Simons Trader Quotes (10). Credit: www.Motivation2invest.com/Jim-Simons-Quotes

“Of course we can’t show you our model, that would be like Buffett telling you what stocks he’s about to buy” – Jim Simons (Billionaire Trader).

The secret trading model used at renaissance technologies is thought to be a combination of Historical Data, Real Time data, complex algorithms and more. Of course, Simons will not reveal this model and the firm is kept notoriously secret. Partly to protect their golden goosem but also so the technology doesn’t fall into the wrong hands.

Luckily for you guys we track the trades on a quarterly basis by Renaissance Technologies and more! To stay up to date join our Investing VIP Group or Stock Research Platform. 

Jim Simons Quotes Gallery

30 Brilliant Quotes by Seth Klarman | Value Investing Strategy

30 Brilliant Quotes by Seth Klarman | Value Investing Strategy

Seth Klarman is a legendary Value Investor nicknamed the “next Warren Buffett”. Klarman follows many of the traditional philosophies of Warren Buffett such as investing within his “circle of competence” and using a “Margin of Safety”.

He even wrote a book on the subject.  Now Seth Klarman runs the Baupost group which focuses on traditional value investing with a few advanced investing techniques.  Investing Strategy:  Value Investor , Long Term, Low Risk, Contrarian  .

30. Nobody can predict the future

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“Be sceptical of those who say they can predict the future, pursue strategies which survive whatever may occur” – Seth Klarman.

There is always an “expert” on CNBC telling you what they think will happen to the stock market, interest rates, inflation etc. Now although is entertaining be aware that the accuracy of these predictions is most likely false and if they do come true luck may have played apart.

The Legendary Investor Howard Marks once said, “There are two types of forecasters, those who don’t know and those you don’t know they don’t know”.

Legendary Investor Peter Lynch also stated “Nobody can consistently predict interest rates or the economy” and “if you spend more than 15 minutes a year on economic analysis…you have wasted 10 minutes [Crowd laughs]”.

29. Know the Risk and Return

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“The most important metric is not returns achieved but returns weighed against risk incurred, sleeping sound is vital” – Seth Klarman (Value investor) .

It is very easy to look at the returns on a portfolio or asset class (such as cryptocurrency) and automatically say “that is a great investment, look at the amazing returns” However, identifying the risk incurred is vital to understanding the risk to reward ratio.

Legendary Investors Ray Dalio and Mohnish Pabrai look for low risk, high reward opportunities.

28. Be a Value investor

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“When you adopt a value investing mindset, any other investment type feels like gambling” – Seth Klarman (Value investor) . Value investing is simple to understand but hard to implement long term. You are basically looking Value a company (a stock is a portion of a company) , then buy below fair value ideally with a margin of safety. 

This sounds simple however, many people (even intuitional investors) don’t value stocks and instead invest using momentum (what has gone up recently) and from news etc. That is the reason Seth Klarman says other strategies feel alot like gambling.  The foundations of Value investing were paved by Benjamin Graham and Warren Buffett. 

27. Avoid Crowd Psychology 

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“Value Investing emphasizes in depth fundamental analysis & resisting crowd psychology” – Seth Klarman (Value Investor) .

The starting point with value investing is doing independent , in depth analysis of a businesses fundamentals. Cash Flow, Growth and Risk.

  The trick is to resist the noise from the crowd and outside media who say a company is really good or really bad, you have to use your own internal compass. 

As the old saying goes “A stupid man stands in a crowd…a wise man stands alone”.

26. Buy stocks on the Way down

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“Buy on the way down, there is more volume and less competition than the way back up” – Seth Klarman (Value Investor). 

When stocks crash fear reigns and many hesitate to buy, when in fact (usually) this is the best time to buy as stocks are cheaper.

However, you should know the reason for the stock market crash and if the fundamentals of the business have changed. When stocks are falling more people are selling which means there is greater trading volume & liquidity available for bold buyers.

25. Greater the Stigma, the better the bargain

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“Generally the greater the stigma, the better the bargain” – Seth Klarman (Value Investor). When bad news hits a company, the stock tends to crash, this volatility can equal a potentially buying opportunity as the stock is cheaper. But be sure to find out the reason for the decline and ask “Have the fundamentals changed?”, if no than it can be a good investment.

24. Be an Independent Thinker

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“It’s easy to run with the herd, it takes courage to stand apart…but this is the key to success” – Seth Klarman (Value Investor) Herd Mentality is seductive, we all want to be “part of something” whether that be a winning football team or a stock or asset which is going up. It is easy to follow the crowd as it “feel’s safe” but often it can be the most dangerous thing to do when investing.

23. No Bargains = Time to sell

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“When there are no bargains to be found & little worth buying…there is often much worth selling” – Seth Klarman (Value investor) . Klarman is using what Charlie Munger calls “Inversion” it is obvious that there are no bargain stocks to be found, thus that may mean it is a great time to sell the highly valued stocks.

22. Know your Circle of Competence

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“An Investor is better knowing alot about a few investments, than little about many” – Seth Klarman (Value Investor). Warren Buffett often talks about the power of knowing your “Circle of competence”, this is what you know and don’t know. In order to find a mispricing in the stock market it is often useful to go deep in order to discover a unique insight. 

21. Don’t Swing at Every pitch

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“You don’t have to swing at every pitch, deciding not to act is still a decision” – Seth Klarman (Value Investor) . Klarman is paraphrasing Warren Buffett here who often talks about “waiting for the right pitch” as there are “No called strikes” in investing. You can sit there and watch pitch after pitch go by until you find an opportunity. 

20. Complexity limits competition

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“Complexity limits competition” – Seth Klarman (Value Investor) . Complex industries (cloud computing, technology, biotech or specialist manufacturing) may be difficult to understand and thus limit competition from investors. Having specialist knowledge in an area can be immensely beneficial. 

19. Don’t be forced to sell stocks

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“Successful investors sell when they want to, not when they have to” – Seth Klarman (Value investor). Aim to not leave yourself in a position where you are forced to sell your stocks, for example at the bottom of a stock market crash!

This could be because you need the money to live or are experiencing an opportunity cost. A rule of thumb is to not invest any money which you can’t afford to lose and keep a cash position of approximately 20% of your portfolio. This is “dry powder” ready to deploy when opportunities arise. 

18. Buy with a Margin of Safety

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“Buy with a Margin of Safety, below the fair value this lowers the risk from bad luck or error” – Seth Klarman (Value Investor). Seth Klarman wrote a book called “Margin of Safety”, but the term is often used heavily by the father of value investing Benjamin Graham and Warren Buffett. 

What is a Margin of Safety?

A “Margin of Safety” is an engineering term which often means adding extra to compensate for error. For example when great bridges were built in Ancient Roman the architect & workers were made to stand under the bridge before it opened to show they had faith in the strength!

This means they made sure they added a margin of safety and kept the quality high. In investing the idea is the value a companies stock then buy below that “fair value”, Buffett is very disciplined and patient in this area and looks for at least a 20% margin of safety!

For example, if a stock was valued using our advanced valuation model  at $20 per share, then 20% lower would be $16 per share or less, this would be Buffett’s buy point. 

17. Focus on Process not outcome

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“Focus on the process, not the outcome” – Seth Klarman (Value investor). Luck & randomness plays a role in many successful outcomes especially in the stock market. A bad process can give great results & a good process can give bad results.

However, without a strategy you are effectively gambling and over the long term a good strategy tends to yield the best results. 

16. Invest Long Term

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

 “The single greatest edge an investor can have is a long term mindset” – Seth Klarman (Value Investor). There say “diversification is the only free lunch in investing” but I personally think it’s having the ability to think long term see past the recent headlines and bad news. 

15. Invest against the crowds

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“Over the Long run…the crowd is always wrong” – Seth Klarman (Value Investor). There is a phenomena called “wisdom of crowds” but also “madness of crowds” .

Seth Klarman seems to believe the later and thus is a true contrarian investor which bets against the herd. I personally believe in the stock market “madness of crowds” is strong in the short term but in the long term “wisdom of crowds” generally occurs…great companies become obvious. 

14. History doesn’t repeat, but it does rhyme

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“History doesn’t repeat but it does rhyme” – Seth Klarman (Value investor). We can learn alot from history, past stock market crashes, bubbles etc. However, we also must be aware past outcomes doesn’t  mean the future will be the same. But it may be “similar.”

13. Investing is Economics & Psychology

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“Investing is Economics & Psychology combined” – Seth Klarman (Value Investor) . This is one of the reasons I find investing so interesting it is a multifaceted subject with roots in reality and human psychology. 

12. Humans cause volatility

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“In the stock market, Human behaviour is responsible for overreaction” – Seth Klarman (Value Investor). Humans still make the majority of decisions when it comes to investing, this results in fear & greed being the main drivers of stock price moves…in the short term at least. 

11. Play the Intellectual Game

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“I find value investing simulating, intellectually challenging & financially rewarding” Seth Klarman (Billionaire investor). Investing is a game which simulates the mind and has large real world outcomes which can improve your finances massively. Thus it’s no surprise many Legendary Investors have a keen passion for investing well into their old age, examples include Warren Buffett, Ray Dalio and many more.

10. Look for Urgent selling

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“Always look for forced urgent selling” – Seth Klarman  , Motivated sellers can result in great buying opportunities. Think about a clearance sale at a store “everything must go”. Thus identifying these opportunities can lead to great success, usually this in midst of some kind of crisis or stock market crash. 

In real estate looking for the three D’s can help you identify deals these are “Debt, Divorce or Death” this may sound morbid and unsensitive but it is just a strategy. .

Fun Fact: Blackstone real estate arm acquired the entire Hilton hotel group during the 2008 financial crisis when the company was in trouble.

9. Be a Contrarian 

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“Value investing is a marriage between a contrarian streak and a calculator” – Seth Klarman (Value Investor).  Betting against the consensus and being right is a great strategy for success in the market.

This is being a “Contrarian” similar to Sir John Templeton who is famous for “investing when there is blood on the streets”. But remember to be a “calculator” know your numbers and have an insight the market doesn’t know.

8. Deal in Probabilities

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“We don’t deal in absolutes, we deal in probabilities” – Seth Klarman (Value Investor). I have many friends (including myself) who are from a science or engineering background, they often come to the stock investing game looking for the “formula of success”.

However, in investing and with all great success in life there is no strict rule book which always works. Great Investing is about have a great strategy then letting randomness and luck play apart in the outcome. Howard Marks mentioned “Remember the 6foot man who drowned crossing the river which was only 5ft deep…on average”.

7. Have Cash & Courage

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“An Investor only needs two things Cash & Courage” – Seth Klarman. I mentioned previously about the rule of thumb for keeping approximately 20% of your portfolio in cash ready for opportunities.

Warren Buffett is famous for his enormous cash pile at Berkshire which is approaching approximately $140 Billion! You can be assured just like in the 2008 financial crisis when stocks crash Buffett is ready to deploy & buy value. 

6. Buy Below Fair Value

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“Value investing is buying shares at a discount to their intrinsic value & holding until their value is realised” – Seth Klarman (Value Investor) Buying shares below fair value with a Margin of Safety is one part of the strategy. Then you need to hold long term until the market realises their true value. 

5. Learn from the mistakes of others

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“Avoiding where others go wrong is an important step in achieving success”  – Seth Klarman (value investor) .  Learn from the mistakes of others is a shortcut and less painful than learning solely from your own mistakes. 

4. Assess Risk First 

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“Loss avoidance must be the cornerstone of your investment philosophy” – Seth Klarman (Value Investor). Focus on assessing risk first and minimising the downside, then let the upside take care of itself. As Warren Buffett once said, “Rule Number One of investing is don’t lose, rule number 2, is don’t forget rule number 1”.

3. Be Disciplined with your strategy

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“Value investing requires hard work, discipline and a long term view…few people have this mindset” – Seth Klarman (Value Investor) Warren Buffett is the epitome of these traits, immensely disciplined with a super long term focus.  

2. Know what motivates people

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“The markets are governed by Behavioural science not physical science” – Seth Klarman (Value investor) . 

Humans are driven by Greed and fear, understanding these helps you to understand stock market fluctuates. As Benjamin Graham once said “In the short run the stock market is a voting machine, in the long run it’s a weighing machine”

1. Price is all that matters 

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

Seth Klarman Value Investor quotes (19) Credit. www.motivation2invest.com/seth-klarman-quotes

“Price is all that matters, at some point an asset is a buy, at another time it’s a sell or hold” – Seth Klarman (Value investor). People often mistake “a great company” or a “great technology, crypto/blockchain” for a great investment. A great investment is price dependent. At one price it’s a buy at another not so much. 

Want to Learn how to invest?

Many members of the Motivation 2 Invest community also have this passion and this drive to learn more each day. If you want to learn how to become a great fundamental investor or just join our thriving VIP Group. Check out the link here:  https://www.motivation2invest.com/product/stock-investing-course/     We open the course to a limited number of members each month so be sure to reserve your spot now. Good Luck! 

Seth Klarman Quotes Gallery x 30