Stock Investing Greats and the Lessons They Teach

Great generals study battles from the past and the techniques used by the greatest military geniuses. In the same way, if an investor wants to become a great investor, he should study the great investors of the past to learn from their triumphs as well as their mistakes.

Warren Buffet

Warren Buffet is perhaps the most well known and is certainly the most successful stock investor of the modern era. Several important stock investing concepts can be learned.

• Invest as an owner. Warren Buffet invests in stocks as the owner of a business paying now for future earnings. Investors should always pay attention to future earnings and potential future competition that might impair those earnings.
• Invest in what you understand. If an investor doesn't understand how the business makes money, she should not invest.
• Invest when others are fearful. The time to invest is when others are not investing. The best deals can be had at this time.

George Soros

George Soros is one of the greatest currency speculators of all time. He is famous for taking a large short position against the British pound and making $1.1 billion profit. He teaches investors to take a large position when confident and quit when ahead.

Peter Lynch

Peter Lynch is famous as the manager of Fidelity's Magellan Fund from 1977 to 1990. He returned 29.2% annually. His investment theories include

• Invest in the familiar. Invest in the companies providing the everyday products that people use.
• Invest in growth companies. Companies that can grow earnings 20 to 25% over several years should perform well in the stock market.

Jesse Livermore

Jesse Livermore was perhaps the greatest stock speculator that ever lived. During the Stock Market Crash of 1929, he went with short stocks and made $100 million. From him investors can learn to

• Make money in up or down markets
• Test a market by trading small positions. Once the market moves in the direction that gives a profit, add to the position so the investor trades from strength.

By analyzing and learning what made these four great investors successful, the individual investor of today can emulate those techniques and improve his investment returns.