Important Money lessons from the 3 biggest investors ever!
You should only invest if you understand the theory of chaos, or the art of speculation!
If not, then roam around this world a bit, and see what people want, and which company or institution speaks their needs!
Investment, or putting forward units of wealth into future prospect deals, has been practised for many ages.
Philosophical approaches and lessons toward and for successful use of wealth and its growth, have been taught by many big minds, from all over this world.
This post is a modern take on “investment teaching”, by laying down in front of you, a few of the many money lessons, from the 3 biggest investors of all time.
Special care is taken to design this content, so as to maintain the flow of continuity and heritage. We have selected Philip Fisher, Benjamin Graham, and Warren Buffett, for you.
These three men were highly influential both on the investment market, and on each other.
They can be said to be the holy triangle in investment theories, where all three of them were contemporary, yet imparted teachings to each other.
You are most welcome to this post, offered by the Best Debt consolidation Blog Section. We hope you have a nice time going through this article, which will keep you coming back to our blogs for more!
Why no one can teach you about investments? And a little about Chaos Theory:
*A must read even though it’s against this topic!*
I have purposefully introduced this section to make you understand that investment strategies vary from people to people, and only you can teach yourself about good vehicles and bad.
Unless you do yourself a number of trials and errors, you won’t be able to grasp which investment types function best for you.
Say for example, you might not be comfortable with mutual funds, rather you would like to invest in different stocks separately.
You may or may not want to diversify your portfolio.
You may or may not show interest in securities and debentures, rather be a safe player and invest in savings vehicles.
The preferences are numerous when you are planning to invest your wealth. The financial perspectives and lessons taught by Fisher, Graham, or Buffett are broadly based on share market and stocks.
But still, they can be used to understand the current economic market, and the same theories can also be applied for purchasing savings vehicles, and doing low profile investments (like retirement investment for example).
However, at the end of the day the whole game depends on you and your own understanding in predicting future values of assets.
Moreover, we also have something to teach you about ‘Time’, if you are keen in making investments.
As I have said in the very first line of this post, that you must know the Chaos Theory for making successful investments.
By events, we mean incidents. Chaos theory is very easy, yet very difficult at the same time to understand.
An example of this, is the domino effect! How one domino being pushed, drops all the dominos coming in line, like as if the “falling property” of the first domino gets transferred, one by one, to the last domino.
If you look very closely at all that’s happening in this world, you will understand the basic of this theory. Everything is related, and nothing happens without a reason.
Abstract examples help in understanding this, the best.
Say, you took a bath last Saturday in a tub of ice cold water, and hence you caught a cold!
Due to this cold and cough, you couldn’t sleep well for 3 to 4 days.
Due to this lack of sleep, you couldn’t perform well at office.
Because of this, the management fired you.
While coming back home, from office, you drove past a liquor shop and out of depression got hold of a bottle of bourbon.
You got drunk, and finally landed into a major accident, and now you can’t get out of bed for 3 months straight.
That’s what Chaos Theory represents!!!!
It’s very important, that you know about this amazing concept, before going on to do investments.
If you can’t predict what the market will want in the future, based on the present situations, then investment is not what you should do.
Therefore, not to deviate from the main purpose of this topic, here are,
Money lessons from the 3 biggest investors ever, as per their names:
1. Benjamin Graham, and his concept of stock market as a hyper-emotional entity:
This man was a pioneer of value investing and trading.
He understood the tradability power of goods, like none before.
Value investing means, holding a specific good for a significant time, and then trading it or selling it for a value, much more than what it initially had.
Example could be, trading orange peels for an airplane!!
Sounds highly hypothetical, but it’s true!
Who knows, probably one fine day this world will run out of oranges, but everyone will have his own airplane!!!
To understand value investing, Benjamin Graham devised his unique allegory of Mr.Market!
His investment ideas and money lessons were very different than other investors of his time.
He felt that the share market was a man who suffered from vigorous mood swings.
Most probably a manic-depressed human being, that comes to you every day to offer highly contrastive values, for the same types of stocks and shares.
Now, it’s up to you, to buy or sell the assets you hold, depending on the offers shown to you by this fickle minded manic depressed man, a victim of Bipolar Disorder.
You might definitely argue, that what ridicule is this?! These ain’t money lessons!! This post’s a fraud! But hey, no, not at all!
Money is assigning values to objects!
And, when an object loses its value, then the amount of money that you will get by selling it, will also decrease.
The vice versa happens, when the object’s value rises and its selling power also gets a boost!
Benjamin Graham has always taken investments as fruitful decisions based on “to be values” of assets.
The stock market undoubtedly poses a threat to an investor, because of its fluctuating character, just like the maniac Mr. Market!
But, it also gives a wonderful hope, that one fine day, an asset will reach its optimum demand, and carry the highest selling and buying value!
The theories and books of Benjamin Graham have highly influenced Warren Buffett, in his own experiments regarding time-barred value investing.
2. Philip Arthur Fisher, and his scuttlebutt technique:
Scuttlebutt refers to a drinking crate fitted on the deck of ships, mostly clippers, especially in the 17th or 18th century.
Men on board, and travelers used to chatter about several things, and discussed matters while enjoying their mug of drink!
This later on developed into a new meaning for scuttlebutt, where these gatherings resulted into hour long gossips and rumors regarding the people, corporations, and important figures on board.
Philip Arthur Fisher understood the power of information and knowledge. His level of research before investing in the stock market, has always been cited by Warren Buffett, when asked about his own influences.
The scuttlebutt technique is all about engaging in time long conversations and meetings with people related to a company, in whose stocks you are about to invest!
He believed rumors are effective in understanding growth of stocks, over time. Even if not cent percent, then at least 1% of a rumor can be true.
If you can fuse a little of “Mr.Market trust factor” by Graham, into this, and decide on which stocks to buy, then your investment game should run smooth!
Warren Buffett is at times marked saying, the books by Fisher have helped him throughout his investment career, and they are one of a kind.
To be precise, I myself haven’t read much of Fisher’s works, but I am planning to grab hold of a few of them, sometime soon. You should also do the same. His Common Stocks and Uncommon Profits, is what I am planning on to read!
So, what is Philip Fisher exactly aiming at?
- Keeping yourself updated with any recent information about corporations surrounding your investments!
- Paying attention to what people want, and which companies are offering what!
- Never completely rely on future predicting rumors, yet at the same time, rely a bit. And, try to squeeze out a little taste of truth, from all rumors you hear!
Therefore………. ***@$#%Scuttlebutting… ain’t hurting@$#%!!!***
3. Warren Buffett and his take on investment as a product of time:
It’s not seldom that we get to hear, Warren Buffett is 85% Benjamin Graham, and 15% Philip Fisher.
It’s pretty much true. Warren Buffett obviously has his own investment ethics, that are unique of its own.
But, he has also largely implemented the investment ideas of Graham and Fisher.
The most important investment tip that we get from Buffett is that investment is a result of time.
This has also been mentioned or shown from time to time, by both Fisher and Graham.
Warren Buffett started to invest in share market from a very early age. He probably bought his first share before he was 13!
Berkshire Hathaway, his corporation, is a holding company, which owns companies and industries covering several commodity and utility goods. And, most of the companies have a strong history!
Buffett believes in time! And this is the biggest lesson you can learn from him.
This time factor also has its place in investments related to savings and retirement vehicles.
The earlier you start to save for retirement, or the longer your money works in bank accounts, the more you will earn in interest.
That’s how the whole thing works.
You have to learn to utilize time to your own benefit.
When you think of investments, you must be thinking about time. You must be thinking how your investment will cater to the future needs of a population!
So, here we are then.
The post has come to an end.
I think this is ample enough to take in at one time!
Go through the concepts of Chaos Theory, Allegory of Mr. Market, Scuttlebutt technique, and Buffett’s time management, again and again, if required. We really believe that these will help you with successful investments!
Investment is luck!
But, you can create your own luck, if you want!