While George Soros, Warren Buffett and Bill Gates to name but three investment gurus, are certainly getting on in years, they are still as sharp as a tack when it comes to investment ideas. The world of investment may have moved on, the strategies of years gone by may have been replaced but one thing you can’t replace, the value of experience. These three investment gurus have decades of experience between them and to say they have “been there, done it and bought the T-shirt” is an understatement. So, what lessons can we still learn from the old investment gurus?
Have the courage of your convictions
If we take Warren Buffett for example, his multibillion-dollar investment vehicle has a portfolio which consists of just 90 companies. While some of the shares may offer exposure to individual sectors, this is not a massive spread of investments and is mostly stock specific. This means that the company have taken individual bets on individual shares with Apple a prime example. Between the third and fourth quarter of 2016 Berkshire Hathaway quadrupled its investment in Apple. This is a phenomenal investment worth approaching $8 billion and is in itself a significant bet on the technology sector.
Looking to the future
Bill Gates was recently talking about robots in the employment market and how they could impact government tax income in the future. This is a subject that many people would prefer to sweep under the carpet but robots are coming, employment positions are under pressure and it is now time to talk about their potential impact. The idea that robots should pay “taxes” may seem a little eccentric on the surface but when you bear in mind the potential cost savings, and loss of employment positions, is it really that absurd?
It is also worth remembering, as Bill Gates rightly pointed out, each employing position lost to a robot takes an employment tax income stream away from the authorities. Have they thought that far ahead? How will they replace employment tax income?
Hedging your bets
George Soros has come under pressure of late amid suggestions that he has been caught out by the “Trump rally”. In reality he will not be the only person to have been caught out but because he is so high profile he tends to grab the headlines. Short positions in the various index tracking funds will have created significant paper losses but he also invested heavily in the financial industry and bread-and-butter sectors. So, while the media may prefer to highlight his losses he also hedged his bets, even though he believed the market was going down at the time.
Conclusion
The ability to learn and be flexible, perhaps changing your investment ideals in the future, is very important if you want to be successful. George Soros did not see the Trump rally but he still hedged his bets, Warren Buffett has lost his long-standing aversion to technology stocks and Bill Gates is willing to talk about subjects many of us would rather ignore.
Investment markets may have changed but good old-fashioned research and confidence in your own ideas will never be replaced.