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I want to compare the investment styles of two of the best-known investors in the world -- Warren Buffett and George Soros. (Note: This is about investment styles, NOT politics, so please keep reading!)
Once you understand how these two investment titans differ... you will understand why, if you want to emulate their investment success, you will have to develop your own unique investment style or "Holy Grail."
Once you do that, you'll make more money, enjoy greater financial freedom, and have more control over your life than you ever thought possible.
There is a story going around Wall Street that opposite Mt. Rushmore, there's another mountain, and it's devoted to the world's greatest money managers.
Two figures have been chiseled into the face of the mountain: Warren Buffett and George Soros.
But as Soros observed: "You couldn't find more dissimilar figures."
Yet Soros and Buffett have a lot in common. Both...
... are members of the Forbes 400 list of wealthiest Americans
... have returned over 20% annually
... have careers that have exceeded 40 years and
... are almost exactly the same age (Soros is 18 days older).
Yet, how they achieved their stunning wealth could not be more different. Let's contrast their styles.
Warren Buffett runs America's biggest conglomerate, Berkshire Hathaway. So you'd figure that America's second-richest man would spend his time developing strategies, new ideas and products.
But is Warren Buffett really busy? Well, Warren Buffett says he "tap dances to work." And once there, he "expects to lie on his back and paint the Sistine Chapel ceiling."
His investment style, Buffett says, "borders on lethargy." He buys large stakes in companies that he holds onto for decades -- allowing for the miracle of tax-free compounding to ramp up his returns.
Contrast that with George Soros, who loves to make big bets and loves to win big. He famously bet $10 billion against the British pound in 1992 and made $1 billion dollars.
But the flipside is that Soros loses big as well. Two years later, after he "broke the Bank of England," he bet against the Japanese yen and lost $800 million.
Soros speaks of "risk taking being painful" and of some people "going to the brink but never over, of others going to the brink and occasionally going over."
Does Soros' style sound anything like Warren Buffett's?
(No prizes for answering that question correctly)
So what's the point then?
Let me land the plane...
Your "Holy Grail" is not what you think it is...
It doesn't come from imitating George Soros or Warren Buffett.
It comes from studying a lot of different approaches and incorporating them into your own unique style.
So step one to finding your own Holy Grail is to decide what you want to trade and how you want to trade it.
If you like excitement, learn to Day Trade... the financial markets are the best "live video game" out there and you'll never have to go to a video arcade again.
If you prefer a "life of lethargy," like Buffett, invest in value stocks. You'll have plenty of time to paint your own Sistine Chapel.
If you are fascinated by "story stocks," focus on technology, biotech and mining stocks.
The bottom line?
Like Buffett and Soros, you need to develop your own unique style.
Just make sure that your style fits your own personality.
Once you do this, you will have taken the first crucial step toward developing your own "Holy Grail."
Another way to think about it...
Traders and investors who seek the "Holy Grail" in a single system don't understand that there literally are thousands of different styles of trading and investing. Trading styles are like styles in the martial arts -- each with its own unique characteristics. In martial arts, there are different "schools" of fighting, such as Kung Fu, karate and Tae Kwon Do.
In trading and investment, there are also different "schools," featuring fundamental analysis, technical analysis, trading, value, growth, options and futures. By understanding that different trading methods are like martial arts, you'll be better able to choose what style suits your personality the best.
Yet, all martial arts have the same objective: Defeat an opponent.
All schools of investment have the same objective: Make money.
But just like a karate black belt achieves his goals differently from the way that boxing great Muhammad Ali did, different styles of investors make money -- in different ways.
Yet, let's say you begin to study karate. Soon you'll find that there are all sorts of distinctions... different versions of the major styles that you probably never were aware of.
Investing is similar in its variations. There are trend and countertrend indicators. In value stock investing, you can use low price-to-book or low P/E ratios. In option investing, you can buy or sell options -- or even fly your own "iron condor."
As trading coach Van Tharp observes:
"There are an infinite number of ways of making money in the market. It's just that everyone has to find his own way."
After all is said and done, you have to look inside yourself and find an investment approach that fits your personality.
You have to find your own "Holy Grail."
Edited Article of Nicholas A. Vardy
Editor, The Global Guru
http://www.nicholasvardy.com
Once you understand how these two investment titans differ... you will understand why, if you want to emulate their investment success, you will have to develop your own unique investment style or "Holy Grail."
Once you do that, you'll make more money, enjoy greater financial freedom, and have more control over your life than you ever thought possible.
There is a story going around Wall Street that opposite Mt. Rushmore, there's another mountain, and it's devoted to the world's greatest money managers.
Two figures have been chiseled into the face of the mountain: Warren Buffett and George Soros.
But as Soros observed: "You couldn't find more dissimilar figures."
Yet Soros and Buffett have a lot in common. Both...
... are members of the Forbes 400 list of wealthiest Americans
... have returned over 20% annually
... have careers that have exceeded 40 years and
... are almost exactly the same age (Soros is 18 days older).
Yet, how they achieved their stunning wealth could not be more different. Let's contrast their styles.
Warren Buffett runs America's biggest conglomerate, Berkshire Hathaway. So you'd figure that America's second-richest man would spend his time developing strategies, new ideas and products.
But is Warren Buffett really busy? Well, Warren Buffett says he "tap dances to work." And once there, he "expects to lie on his back and paint the Sistine Chapel ceiling."
His investment style, Buffett says, "borders on lethargy." He buys large stakes in companies that he holds onto for decades -- allowing for the miracle of tax-free compounding to ramp up his returns.
Contrast that with George Soros, who loves to make big bets and loves to win big. He famously bet $10 billion against the British pound in 1992 and made $1 billion dollars.
But the flipside is that Soros loses big as well. Two years later, after he "broke the Bank of England," he bet against the Japanese yen and lost $800 million.
Soros speaks of "risk taking being painful" and of some people "going to the brink but never over, of others going to the brink and occasionally going over."
Does Soros' style sound anything like Warren Buffett's?
(No prizes for answering that question correctly)
So what's the point then?
Let me land the plane...
Your "Holy Grail" is not what you think it is...
It doesn't come from imitating George Soros or Warren Buffett.
It comes from studying a lot of different approaches and incorporating them into your own unique style.
So step one to finding your own Holy Grail is to decide what you want to trade and how you want to trade it.
If you like excitement, learn to Day Trade... the financial markets are the best "live video game" out there and you'll never have to go to a video arcade again.
If you prefer a "life of lethargy," like Buffett, invest in value stocks. You'll have plenty of time to paint your own Sistine Chapel.
If you are fascinated by "story stocks," focus on technology, biotech and mining stocks.
The bottom line?
Like Buffett and Soros, you need to develop your own unique style.
Just make sure that your style fits your own personality.
Once you do this, you will have taken the first crucial step toward developing your own "Holy Grail."
Another way to think about it...
Traders and investors who seek the "Holy Grail" in a single system don't understand that there literally are thousands of different styles of trading and investing. Trading styles are like styles in the martial arts -- each with its own unique characteristics. In martial arts, there are different "schools" of fighting, such as Kung Fu, karate and Tae Kwon Do.
In trading and investment, there are also different "schools," featuring fundamental analysis, technical analysis, trading, value, growth, options and futures. By understanding that different trading methods are like martial arts, you'll be better able to choose what style suits your personality the best.
Yet, all martial arts have the same objective: Defeat an opponent.
All schools of investment have the same objective: Make money.
But just like a karate black belt achieves his goals differently from the way that boxing great Muhammad Ali did, different styles of investors make money -- in different ways.
Yet, let's say you begin to study karate. Soon you'll find that there are all sorts of distinctions... different versions of the major styles that you probably never were aware of.
Investing is similar in its variations. There are trend and countertrend indicators. In value stock investing, you can use low price-to-book or low P/E ratios. In option investing, you can buy or sell options -- or even fly your own "iron condor."
As trading coach Van Tharp observes:
"There are an infinite number of ways of making money in the market. It's just that everyone has to find his own way."
After all is said and done, you have to look inside yourself and find an investment approach that fits your personality.
You have to find your own "Holy Grail."
Edited Article of Nicholas A. Vardy
Editor, The Global Guru
http://www.nicholasvardy.com
