21 August 2014

Best investment advice from 15 legendary investors : rediff



Joseph Hachem kisses a stack of $100 bills after winning World Series of Poker.
As a small investor, the rules suggest that you must invest in stocks with a long term view of five to eight years and diversify portfolio with debt and gold.
Legendary investors, however, have their own style and timeline. While some prefer to hold investments for indefinite period other would sell at a good profit.
All of them, however, researched their companies well, didn’t believe in the market chatter and advise to stay invested for long term.
Let’s take a look at 15 top stock investors and the nugget of wisdom they have shared about investing.



Former US presidents George Bush (R) and Bill Clinton (L) stand with National Constitution Center Chairman John C. Bogle (Centre).
Jack (John) Bogle
Who is he: Founder and retired CEO of The Vanguard Group
Investment strategy: Invest in low cost index funds and hold them for long
Quote“Over the long-term, the miracle of compounding returns is overwhelmed by the tyranny of compounding cost”
His idea was that investors should invest in mutual funds that charge the lowest possible fees, which is possible in an index fund. He showed how a 2 per cent annual fee can eat away into your returns.
This idea became so popular that The Vanguard Group is now the world's largest mutual fund family, with $2.6 trillion under management, according to Forbes.


John Templeton at the 22nd Annual Movieguide.
John Templeton
Who is he: A legendary investor and mutual fund pioneer
Investment strategy: He is a legendary stock investor who believed in buying at a low price and selling at a high
Quote"If you buy the same securities everyone else is buying, you will have the same results as everyone else"
Templeton became a billionaire by pioneering the use of globally diversified mutual funds. His Templeton Growth Fund was among the first which invested in Japan in the middle of the 1960s and reap the benefit on the country’s astronomical economic rise.



Berkshire Hathaway chairman Warren Buffett.
Warren Buffett
Who is he: The most successful investor of our time, he is chairman and CEO of Berkshire Hathaway
Investment strategy: He is a value investor that buys stocks at a low price and holds them for a indefinite period
Quote“Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down”
He only invests in business that he understands and this made him stay away from dot com companies that went bust in the year 2000.



Peter Lynch of  Fidelity Research Company.
Peter Lynch
Who is he: He was the star manager of Fidelity Investments and author of several books on investment such as ‘Invest in what you know’ and ‘One Up On Wall Street’.
Investment strategy: Take your time to identify exceptional companies.
Quote“Everyone has the brainpower to follow the stock market. If you made it through fifth grade math, you can do it”
Just like Warren Buffett, Lynch always stuck to companies that he can understand. He didn’t believe in following the herd and famously acknowledge that it’s futile to predict the economy and interest rates.




David Dreman
Who is he: He is a famous investor that has written books such as ‘Contrarian Investment Strategy: The Psychology of Stock Market Success’
Investment strategy: He believed in taking contrarian calls
Quote"If you have good stocks and you really know them, you'll make money if you're patient over three years or more"
He buys stocks that have a low price-earnings ratios, low price-to-book value ratios and higher than average yield. He believed that this stock picking technique can outperform the markets always.

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