Warren Buffet - Wizard of Omaha
Dear Traders,
When someone is asking you who is the best investor in the world, you can easily go with Warren Buffet. This man won't ever let you down. Newspapers define him as "the world's wealthiest man" and "the most influential" one.
His passion for economics has revealed itself when he was still very young and during childhood he has started different ventures, such as selling chewing gum, Coca-Cola bottles or magazines. What makes it unusual is that from the very beginning Buffet knew how to make things really work. Proving this statement, he has developed the best door to door mail delivery by improving the existing order. At 10 he visited the New York Stock Exchange and at 11 he bought the first shares for himself, his sister Doris and bought the land when he was 14 years old. His senior yearbook reads: "Likes math; a future stockbroker". Yes, trading is really where he was born to be.
Studying in Columbia University, Warren met his best teacher and mentor - Benjamin Graham, one of the most famous economists of the 20th century. "The basic ideas of investing are to look at stocks as business, use the market's fluctuations to your advantage, and seek a margin of safety. That's what Ben Graham taught us. A hundred years from now they will still be the cornerstones of investing" Warren used to say.
Buffet can be a perfect role model, if you want to trade like a classic value investor, basically because he was one the economists who invented it. Work on development of value investing theory is one of his main achievements, which involves trading only on stocks, which are selling at an extraordinary discount to the value of underlying assets (so called "intrinsic value"). Buffet has started to pay a lot of attention to the company's background and its management, which is close to all who is fond of fundamental analysis.
One of the main principles of Buffet's trading theory is to find successful but yet unpopular companies and buy their stocks. Considering the goal here we can call it security without any doubts, cause risks are very low and investments are safe, so Buffet is probably as much a long term player as a trader can ever be.
As the economic world is becoming more complicated and harder to analyze every year, value investing can be hard to implement sometimes, but with the great example in front of your eyes and clever approach you can widen your trading horizons and reach new investing heights!
http://i.imgur.com/MWiqwsv.png?1
Start your own trading history with Ayrex!
Sincerely yours,
Ayrex Team.
John Bogle - Godfather of Index investing
Dear Traders,
In the end of 1999 widely known Fortune Magazine named this man as "one of the four investment giants of the XX century" and later on Times proclaimed him as “one of world’s 100 most powerful and influential people”, and to be honest it is pretty hard to disagree with it.Earlier Bogle’s biographer Robert Slater described his life as "evolutionary, iconoclastic and uncompromisingly committed to his founding principles of putting the interests of the investor first and constructively criticizing the fund industry for practices that run counter to low-cost, client-oriented mutual fund investing." Sounds like a good example of a perfect trader but what makes him such an exceptional investor?
John Bogle was born in 1929 and his childhood was clouded with the events of the Great Depression. During these cruel years his family has lost their inheritance and broke up. Despite of the hard circumstances, John was an excellent student with a bright talent for math as numbers and calculations have always fascinated him. At Princeton University Bogle studied economics and investment and chose mutual funds as his major subject, which has not been well developed before.
In 1974 John Bogle founded Vanguard Company which has been considered by economists as the one of the most respected investment companies ever since. It wasn’t the end of Bogle’s creativeness and in 1975 Vanguard 500 Index funds was created and it is considered as first index mutual fund. The main idea was to lower the current prices and make the index fund copy the index performance over the long run. Due to this plan, with the lower costs the better money management system could be easily implemented.
One of the most important moments of Bogle’s strategy is a strict line between investment and speculation, which lies within the time limits. According to these views, investment is considered with the long term operations only, whereas short term trading is about speculation mostly. John Bogle seems to believe in the thought through technical analysis, while speculation has already affected financial market grandly. In his trading life Bogle hold on to the 8 rules, which can be extremely useful for every professional trader:
- Select low-cost funds
- Consider carefully the added costs of advice
- Don't overrate past funds performance
- Use past performance to determine consistency and risk
- Beware of "stars" (mutual fund managers)
- Beware of asset size
- Don't own too many funds
- Buy your fund portfolio - and hold it
Becoming a great trader is not a destination but a long path and there are can be different obstacles on it. Be ready to adjust your trading style to the always changing conditions and look at the example of pro traders from time to time - you can learn so much from them.
http://i.imgur.com/64txEU5.png?1
Start your own history with Ayrex!
Sincerely yours,
Ayrex Team.