An expert reviews the experts - new and updated appraisals of the winning investment strategies of the greatest financial wizards. Money Masters of Our Time is a reappraisal and revision of those money masters who have stood the test of time plus a look at new money masters. Train emphasises the parts of their various business careers that illuminate their investment techniques focusing on notable individuals whose decisions to buy and sell have actually made money grow. How do they reason? Where do they get their information? How much do they depend on fact and how much on psychology? What are their criteria in selecting a stock? What stocks are they buying now, and why? The ′Money Masters′ covered Warren Buffet, Paul Cabot, Philip Carret, Philip Fisher, Benjamin Graham, Mark Lightbrown, Peter Lynch, John Neff, T. Rowe Price, Richard Rainwater, Julian Robertson, Jim Rogers, George Soros, Michael Steinhardt, John Templeton, Ralph Wanger, Robert Wilson. Train centres on their investment techniques and methods and also gives brief biographical evaluations.
This is a great book which collects small biographies and investing/trading philosophies of some the very successful investors like Warren Buffett, John Templeton, Peter Lynch, Benjamin Graham and Philip Fisher, and traders like George Soros, Julian Robertson and Jim Rogers. There are some not so famous investors included here like Paul Cabot and Richard Rainwater but they also have interesting stories for the investors.
Strikingly often successful investors have had other successful investors as their mentors and you often hear them tell the tale of how they came to realize the insights from Ben Graham, George Soros, Jesse Livermore etc. Since very few are privileged enough to work for a successful investor, books describing their work fills an important void. As a bonus you can also learn from several mentors. Chief amongst books that have brought star investors in front of the general public are Jack Schwager’s Market Wizards series and the seasoned investment advisor John Train’s books.
These two series of books differ in that the former use interviews to present the investors while Train carefully crafts his own portraits of the persons of his choice – a task much helped by the fact that he through his profession got acquainted with several of them. The Money Masters published in 1980 was were a generation of future investors first got to know about Warren Buffett. A few years later The New Money Masters brought forward the next set of superstars such as John Neff, Julian Robertson, Philip Carret, Peter Lynch, Jim Rogers, Ralph Wanger etc. Money Masters of Our Time took the portraits from both the books and updated them slightly - a best of compilation, so to say.
Save one or two slightly more short-term hedge fund managers, the marvellous and time resistant selection focuses on longer term growth or value investors. Growth investors include T. Rowe Price with his focus on high quality, well managed companies in what he called “fertile fields for growth” and the San Francisco based Philip Fisher who, inspired by the success companies in the Silicon Valley, through a research intensive process called scuttlebutt invested in companies where technology was the engine for future growth. Neither of the two by any means invested in growth irrespective of value.
The classic, well diversified, low multiple value investing is represented by amongst others the intellectual and balance sheet focused Ben Graham and the more earnings focused Sir John Templeton who searched for a double kicker from both multiple expansion and earnings expansion at the end of a four year forecast period. They both share a flexible intellect and point to the benefit of being – physically or psychologically – detached from the market noise. Interestingly Train has picked up one of Graham’s less discussed concepts, time based stop losses, i.e. if the value case hasn’t materialized within two years you are on balance better off to sell the stock as you risk sitting on a value trap. Representing the, often less diversified, franchise investing strand of value investors there is Warren Buffett who’s chapter is about double the size of the others. Much has been written about Buffett and there is no need to repeat this but I appreciate the author’s understanding of Buffett’s search for stabile conditions as those enable reasonable forecasts of an essentially unpredictable future.
In a seamless language and with great personal insight Train discusses the many types of investors. The texts are also backed up by a lengthy appendix including material from amongst others Soros and Buffett. In a valuable summary chapter, similarities and differences are presented and the author advices the reader to choose a way of investing that fits his way of thinking and that is not overly crowded. Perhaps due to being an investment advisor Train adds “Thus the outstanding investor knows when to change styles”. In reality though, most of the presented investors have changed very little over the years (“Investors should figure out where they have an edge and stray there”/ Charlie Munger) and have then been fortunate to be active during a period that suited their choice. Successful investing is always a blend of skill and luck.
A skilful presenter like Train has the ability to distil much of the core in each investor’s philosophy and process but in the end there is still even more value in the real deal. After reading Money Masters of Our Time I would recommend moving on to the first hand writings of Graham, Fisher, Lynch and the others. Happy investing.
This is a very worthwhile book on investing. The author does a good job describing the investing process of 18 “masters of investing”. The masters are quite wide-ranging in styles, so it’s a good lesson in that there are plenty of ways to go about it.
Highlights: (1) The chapter on Buffett was really good, and that’s from a person that has basically read everything there is to read about him—online or offline. (2) Train does a good job keeping it interesting, mixing up quirky anecdotes with more technical information.
Drawbacks: As always, with this format, there are parts that are frankly not that interesting.
While a bit dated given the focus on investors from the 20th century still an absolute must read for those looking to deepen their perspectives on public market and bonds investing. Now I need to read a biography on Ralph Wanger and Philip Carret.
Pros: great story base break downs for some of the best investors ever. Plenty of them that are a first for me too! I loved the case studies with specific stocks, the narrative of how they relate to each others styles, and the takeaways as an investors. The appendix was really cool - and a particular look into the performance, leverage, and views of each investor in their own words! Man I thought this was a great read.
Cons: it did get boring during their heavy narrative components. I also thought some of the advice was very repetitive. However, the pros in some of the better sections massively overcompensated for these issues.
Great read — I attached some notes below as well if you’re interested.
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Here’s some of my findings from the book for the investors I remember:
Michael Price: GARP approach for really good businesses, but then went more toward growth and coverage rather than the value aspect.
Mario Gabelli: took advantage of takeover drama with GAMCO and made money there.
Fisher: 13% annualized for 50 years to find out of the way companies, especially OTC.
Wagner: ran the Acorn fund at Harris Associates for 20% annualized for some time. Specialized in micro caps.
Lynch: the goat. Bottom up stock picking, market timing is fake, very high diversification but average turnover. Various investment styles (cyclicals, value, GARP, even high growth in tech). Edge is out working others with research.
Soros: macro focus with high turnover and liquid instruments. More focus on covering mistakes than aggressive bets. High leverage and high concentration.
Jim Rogers: international macro and equity investor with concentration in geographies. Did a lot of Soross research and less of a leverage guy.
Drunkenmillwr: ran the Soro’s funds for 10 years ending in 1990. More of a traditional Soros focus. Led the short on the pound in 92’
Graham: traditional cigar butts approach by looking for net-nets. 12% annualized for 20 years. No business analysis, and a pure quantitative approach. Also did some merger arb and relative value work.
Julian Robertson: the goat. Lots of bottom up research and aggressive long / short bets with some focus on timing. Heavy use of experts. Fundamental and macro bets across the board.
Steinhardt: largely paid brokers for quick info on their rating changes to then lever up and game the system there. More of a speed and payment advantage than anything else.
Phillip Carrey: traditional fundamental investor from Boston I think high teens annualized performance.
A somewhat random summary of the styles (and quirks) of some of the greatest investors of all times. Intriguingly, every one of them has their own way of finding 'alpha', even though some you might call super-levered beta coupled with near-perfect market timing. Alas, reverse-engineering the essence of what made them successful in the past does not make it any easier to build a toolset for the presently chaotic investment landscape.
Train saves his most remarkable insight for the epilogue: "[...] Our nature, says Shakespeare, is subdued to what it works in, like the dyer's hand, and in pursuing great wealth you become a money person. You see the world through dollar-sign binoculars. Then, the exaggeration of any principle becomes its undoing, as the excess of a stimulant becomes a poison, and changing greed from a sin into a commandment dissolves the soul of a family. The children of excessive privilege are often purposeless and morose. And great wealth spoils human contacts. Of the Rothschilds it was said that they had no friends, only clients. The hurly-burly of humanity, from which great wealth fences itself off - it joys and trials, the texture of everyday life - is what we're designed for. [...]"
Probably would apply 4.5 stars if I could. Thoroughly enjoyed this book, the first I've read in paperback format in a while. The book provides a short biography and summary of the investing techniques of some prolific investors. Several of the investors were only relevant in investment circles and could not be found on google, which I found an interesting insight.
At times I was out of my depth with the technical aspects of the book, however throughout the course of reading I found my knowledge and basic fundamental understanding of the pillars of investing improved as a result. The language and writing ability of the author excellent, considering this is a Finance book.
Two excerpts:
Brilliant description of the messy desk of money master Peter Lynch "Perhaps we have here the difference between artificial order - the garden of a French chateau, for example - and working order, such as a jungle, which looks chaotic to the passerby , but makes sense to God or a naturalist."
Better to be rich and anonymous, related quote below: "And great wealth spoils human contacts. Everybody wants something. Of the Rothschilds, it was said that they had no friends, only clients."
Took a long time to finish this one; but it was worth every minute spent reading it. A compilation of 17 marquee investors and their investment philosophies, John Train goes back in time and digs into what worked for whom. Value, growth, hybrid, macro - investors have made money with various strategies but there is one common thread throughout the book - keep it simple, avoid the noise and only focus on what matters.
El libro reseña los estilos de inversión de varios gerentes de inversión, con lo que se pueden identificar diferentes estrategias, enfoques y herramientas. Me gustó que incluyera personajes que desconocía como Richard Rainwater, Paul Cabot, Mark lightbown, Philips Carret o Michael Steinhardt.
Sin embargo se nota que ya han pasado más de 20 años de su publicación entonces ya hay cambios históricos relevantes a tener en cuenta en su lectura.
Presents a wide variety of professional investors, from Graham to Soros, with one chapter dedicated to each. The writing is clear and fluent, the material is original, and the analysis is quite enlightening. You seldom get to read books on great investors where the author himself has such a good understanding of the subject.
Really well written and entertaining book about the gurus of money management. Great at distilling the difficulties and widely varying approaches. However one thing shines is that popular stocks and believing in any story over the data is not a winning formula.
Rereading an old classic. A great mix of very different investment styles. Very good insight into some of the greats, their highs and lows, personal info and investment process.
GENIUSES OR OBSESSIVES NORMALLY HAVE SOME BURR UNDER THEIR SADDLE - POVERTY OR FAMILY TROUBLE IN THEIR YOUTH, OR PHYSICAL OR SOCIAL BURDENS, OR SOME BLOW OF FATE LATER ON THAT PUSHES THEM TO PASS THEIR RIVALS.
Dont overreach - steady, moderate gains will get you where you want to go.
T Rowe Price popularised the term growth stock.
Like most of the greatest investors Rowe Price lost himself in the task.
The most profitable and least risky time to own a share is during the early stages of growth.
Price growth companies had to have; superior research to develop products, lack of cut throat competition, comparative immunity from govt regulation, low total labour costs but well paid employees, >10% ROIC, high sustained profit margins and superior EPS growth.
Priced didn't calculate mathematical valuations, he just bought the best companies in the highest growth industries.
Price's fund fell 42% in 1973 and 39% in 1974.
Happiness comes from small improvements, not from getting somewhere once and for all.
You must be animated by controlled greed and fascinated by the investment process.
You must have patience.
You must think independently.
Be flexible as to the types of businesses to buy, but never overpay.
A good manager should be a demon on costs.
A house with no mortgage is obviously worth more than one that is burdened by one.
Specialisation in the business world often produces very good business economics.
IT requires neither training nor experience to go and and buy a highly visible premier growth stock without regard to price.
When the cycle is perfectly in gear with your expectations, be prepared to jump.
His experience and thoroughness gave him the confidence to be original and, above all, patient.
Peter Lynch retired from running the Magellan fund at age 46, as he wasnt having fun anymore.
Julian Robertson closed the Tiger Fund in 2000 due to massive redemptions and poor performance.
Despite the big falls in 99 and 00 he produced 25% pa in 20 years to 2000.
Jim Rogers worked in tandem with george Soros from 1969 to 1980. Rogers focused on research and Soros traded. There were just the 2 of them and a secretary at the outset.
Soros went out on his own with Rogers at the age of 39 to found Quantum Fund.
Soros doesn't read Wall St research. He develops his opinions essentially by reading papers and dispatches from abroad and particularly by talking to well placed sources around the world.
The usual bull market successfully weathers a number of tests until its considered invulnerable whereupon its ripe for a bust.
Reflexivity - perceptions changes events, which in turn changes perceptions.
The Chinese like to work very hard, think entrepreneurially, they are extremely motivated and they are prepared to delay today's gratification for tomorrows benefit.
Soros has done 33% pa for 29 years. He is a speculator, betting on ST movements, not a true investor.
The Quantum Fund ($9b) lost 30% in 2000.
Soros welcomes the discovery that he has been wrong and acts accordingly, without fighting it.
Doctors usually make poor investors as they are used to being right.
Like most investors Steinhardt started out poor.
Steinhart retired at the age of 54 due to a roller-coaster ride in the 1990's.
Recognise a transforming technology and then invest downstream from it - ie companies that will benefit from the technology.
Unless there is fear in a stock it probably doesn't have a great capital gain potential.
Lynch retired in 1990 after running Magellan for 13 years and doing 29% pa.
Lynch's cardinal advantage was his enormous dedication he brings to the task. In 20 years of marriage he had 2 holidays.
Lynch finds ones of the worst traps to be buying exciting companies that do not have earnings.
For some industries you need to be a specialist to understand it.
Great success, alas, usually requires obsession.
An investor must always keep enough liquid reserves to see him through any likely emergency and to provide ammunition for targets of opportunity.
Good book to get familiar with the philosophy of different investors. You will find a lot of common traits among most of the successful investors such as: 1. Thorough research on the business at micro level. 2. The management should be rational and trustworthy. 3. High Return on invested capital and strong balance sheet. 4. The price should be 50 cent for a dollar value.
Additional similarities: 1. Invest in small companies. 2. Invest in unpopular/unfollowed/turn around companies. 3. Ignore the crowd. 4. Have a huge growth ahead. 5. Invest for long run (minimum 3 years).
This is an excellent book that cover detailed biographies, and more importantly the trading strategies, of the biggest names in financial market, such as Benjamin Graham, Philip Fisher, Warren Buffett, Jim Rogers, George Soros, Julian Robertson, Peter Lynch and John Templeton, to mention a few. Need I say more?
A comprehensive overview of some of the successful investors. While the technical discussion on investment strategies is limited, this book covers a great deal of ground on the wisdom/thought process/unique approaches of greatest investors.
The life bio given on the investors allow you to understand why/how they developed their philosophy on investment, inevitably I was attracted to ideas I most identify with, but it also made me think differently about other approaches/asset classes I wouldn't otherwise consider.
There's nothing explicitly wrong with this other than an overtly supercilious style; I prefer the more down-to-earth style of the 'market wizards' books by schwager. This is ok though.