In every field of human endeavor, an elite few shine brighter than the rest. Some disciplines don’t lend themselves well to objective comparisons. Who are the best baristas, traffic cops and psychiatrists of all time? It’s rather tough to say. But in areas like sports, box office results, book sales and yes, investing returns, the results are plain as day.
It’s truly fascinating to see how the best investors of all time built their fortunes, so here are eight of the best investors ever, in all their glory:
— David Swensen
— Peter Lynch
— John Templeton
— Bill Miller
— Warren Buffett
— Kirk Kerkorian
— Jack Bogle
— Jerry Buss
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As chief investment officer at Yale University, David Swensen was a financial all-star with an unparalleled track record. Swensen took control of Yale’s endowment in 1985, and in the 36 years until his death in 2021, his investments for the university grew at a compound annual growth rate of 13.7%, beating the returns of the average university endowment by 3.4 percentage points per year. Swensen’s track record also easily topped the performance of the S&P 500; he turned every dollar invested into $103 over 36 years, while the wider stock market would’ve yielded just $50 for the same investment.
Swensen’s brilliance was in incorporating modern portfolio theory, which focuses on diversified exposure to different high-return asset classes. Swensen details his approach in his classic investing book, “Pioneering Portfolio Management.”
Peter Lynch didn’t just post eye-popping returns at Fidelity‘s Magellan Fund, he also penned two classic investing books, “One Up on Wall Street” and “Beating the Street.” What gave him authority was his 13-year tenure at Magellan, where Lynch’s growth-focused fund earned 29.2% annually, crushing the 15.8% average return of the S&P 500. Lynch took Magellan from $18 million to $14 billion. If you would’ve invested $10,000 in Magellan in 1977, it would’ve turned into $280,000 by the time Lynch retired.
John Templeton pioneered the use of diversified mutual funds and had consistently impressive returns over 60 years. In the depressed market of 1939, Templeton borrowed $10,000 and bought 100 shares of every stock under $1 on the New York Stock Exchange. All but four stocks would be profitable, and four years later he sold them for over $40,000. An investment of $10,000 in the Templeton Growth Fund in 1954 would’ve turned into $2 million by 1992. Templeton died in 2008.
Bill Miller has done something that many of the greatest investors ever have never accomplished: Over a 15-year period (1991-2005), Miller’s Legg Mason Value Trust beat the S&P 500 every year. Morningstar.com named him the “Fund Manager of the Decade” in 1999. Between 1990 and 2006, Miller grew his fund from $750 million to more than $20 billion in assets under management. An unconventional value investor, Miller believes high-growth stocks can be value stocks if they trade for the right price.
Warren Buffett is widely considered the single best investor of all time, and that’s simply because his numbers are so otherworldly. Since taking the helm at Berkshire Hathaway Inc. (ticker: BRK.A, BRK.B) in 1965, Buffett returned 19.8% annually for shareholders through the end of 2022, while the S&P 500 posted half those average annual returns (9.9% per year). The duration, consistency and magnitude of these exceptional returns are literally unmatched, and helped earn early (and even somewhat late-coming) shareholders a fortune.
It turns out earning double the annual stock market return for nearly six decades adds up. Between 1965 and the end of 2022, the S&P 500 advanced 24,708% compared to 3,787,464% for Buffett’s Berkshire. It’s little wonder Buffett is also one of the richest people in the world.
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While Kirk Kerkorian wasn’t a stock market guru, he was a legendary investor all the same. Born to immigrants, he saved his earnings as a pilot during World War II, bought a $5,000 Cessna and briefly flew commercially before buying the small Trans International Airlines for $60,000 in 1947. He grew it dramatically and sold it for $104 million in 1968. He parlayed his riches into Las Vegas and Hollywood, building several massive resorts and casinos and acquiring Metro-Goldwyn-Mayer. Upon his death in 2015, Kerkorian was worth around $4 billion.
John “Jack” Bogle is the only investor on this list who made his fortune merely attempting to match the returns of the overall market. His groundbreaking idea was the low-cost index fund, a passive mutual fund that seeks to replicate the returns of benchmark indexes through buying and holding their components. He founded The Vanguard Group in 1974, and the flagship Vanguard 500 Index Fund (VFIAX) was opened in 1975 as the first index mutual fund. Today, Vanguard offers more than 430 funds across the world with more than $7 trillion in assets under management.
Like Kerkorian, Jerry Buss has an enviable rags-to-riches story — and he didn’t use the stock market to build his wealth. As a child, Buss worked odd jobs shoe-shining and ditch-digging to get by. After college, he and four other investors put down $6,000 and borrowed $100,000 to buy a 14-unit apartment building in 1959 that would morph into a $350 million real estate business within 18 years. He bought the NBA’s Los Angeles Lakers, the NHL’s Los Angeles Kings, the Forum and another property for $67.5 million in 1979. At the time of his death in 2013, Buss’ net worth was reportedly somewhere around $600 million.
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The 8 Best Investors of All Time originally appeared on usnews.com
Update 05/16/23: This story was previously published at an earlier date and has been updated with new information.