Where Buffet and Soros meet
Friday 16 July 2004
Warren Buffett and George Soros are the world's most successful investors but with totally different investment methods what could they possibly have in common that average punters might learn from?
By The LandlordBuffett, a midwest American, has made more than $US30 billion with his Berkshire Hathaway Group by buying businesses for far less than he considered they were worth and $US1000 invested with him in 1956 would have now grown to almost $US26 million on annual compounded interest of 24.7%.
Meanwhile, Soros, a Hungarian Jew, has made huge leveraged trades on the currency and futures markets through his Quantum Funds to amass $US7 billion and $US1000 with him in 1969 would now be worth more than $5 million on 28.6% annual compounded interest. Similar investments in the Standard & Poor's index would have yielded less than $US75,000.
Hong Kong-based Australian investment analyst-adviser Mark Tier has long pondered the secrets of the super-investors and found that rather than differing in their approach, Soros, Buffett and other big winners shared many similarities in their approach to making money. He lists these in his new book The Winning Investment Habits of Warren Buffett and George Soros (Inverse, through Addenda, $39.95), due in stores this week.
"I looked at their mental strategies and processes for making investments and analysed and tested them by applying them to other successful investors," Tier said. "And my own results improved dramatically when I changed my own behaviour by adopting these winning habits so my personal stock market investments have risen an average of 24.4% a year compared to the S&P, which went up only 2.3% a year. Applying the right mental habits can make the difference between success and failure in anything you do."
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