Top tips from the world’s most famous investors

Investing is famously difficult, particularly if you do not have professional knowledge of the intricacies of the market.

According to data from Performance Investment Group, your chances of beating the market over a single year are 25%. Over five years, it drops to approximately 0.1%.

However, many world-class investors have an impressive track record of success, having achieved highly favourable results over a long period of time.

Given how rare their exceptional market performance is, it follows that they have valuable advice to offer based on their odds-defying returns.

Daily Investor picked out several of the world’s most famous investors and their investing advice, which can be seen below.

Many people think of Warren Buffett first when they think of famous and successful investors. Buffett is the Chairman and CEO of Berkshire Hathaway and was at one point the richest man in the world.

Buffett is always willing to give out investing advice – and among his numerous nuggets of wisdom, we have picked out:

“Be fearful when others are greedy and greedy when others are fearful.”

This contrarian philosophy uses panicked markets and value crashes to buy high-quality companies at a discount.

Likewise, Buffett avoids hyped-up companies that appear to be overpriced – even if lots of investors are buying into them.

Bill Ackman

Bill Ackman is the founder and CEO of Pershing Square Capital Management.

He is famous for his contrarian investing views. He takes a fairly similar approach to Buffett by looking for companies he believes the market underestimates.

Ackman has regularly highlighted the importance of understanding any business you are investing in.

This is because: “If we can’t predict the cash flows, we don’t know what it’s worth. If we don’t know what it’s worth, we can’t invest.”

This aligns with the first of Ackman’s eight principles he uses to decide whether to invest in a business: “The business must be simple and predictable.”

Peter Lynch

Peter Lynch is one of the most successful mutual fund managers ever.

He is known for managing Fidelity Investments’ Magellan Fund from 1977 to 1990 – during which period he averaged an unprecedented 29.2% annualized return.

Lynch has written many best-selling books, with his most popular book arguably being One Up on Wall Street.

His most famous investing advice is simple: “Invest in what you know.”

For this reason, Lynch famously believes that smaller investors have an advantage over Wall Street investors, as they can spend more time finding real-world investment opportunities sooner than when they hit the “investment mainstream.”

Charlie Munger

Charlie Munger was the vice chairman of Warren Buffett’s Berkshire Hathaway and served as Buffett’s second-in-command for several decades before his passing in 2023.

Munger believed that great investing opportunities are uncommon, making it important to take advantage of them when they present themselves.

He said: “The whole secret of investment is to find places where it is safe and wise not to diversify.”

In general, Munger was a major sceptic of significant diversification and instead believed in identifying fewer investments that seemed like winners and holding them over time.

“The big money is not in the buying and the selling, but in the waiting,” Munger once said.