Every stock trader knows that making profitable trades is hard.
You need to be disciplined, focused, and emotionally stable.
On top of this, it’s almost impossible to predict which stocks will rise, and when.
This is why so few stock traders have impressive records.
However, in this article, I’m going to share the most famous stock traders of all time and their invaluable advice to investors. You can expect to learn which stock traders were successful, why, and the strategies to adopt if you want to win.
1. Warren Buffet
Warren Buffet is one of my favorite investors. And while I don’t classify Buffet as a ‘trader’, he is still one of the world's most successful investors. He’s the Chairman and CEO of Berkshire Hathaway, often referred to as the ‘Oracle of Omaha’. Buffett's consistent returns and his ability to pick undervalued companies have made him one of the wealthiest people in the world. He has a very clear investing philosophy that revolves around investing in great companies.
For those interested in learning more about Buffet, consider watching his HBO series ‘Becoming Warren Buffett’. It's by far one of my favorite investing-related TV shows.
- “Be fearful when others are greedy and greedy when others are fearful”
- “It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price”
2. George Soros
George Soros is a Hungarian-American billionaire who founded Soros Fund Management. While Soros is a philanthropist and political activist, he’s best known for ‘Breaking the Bank of England’ in 1992. Soros shorted the British Pound and made a reported $1 billion.
His ability to spot global macroeconomic trends and act on them has earned him billions. Similar to Buffet, there have been several documentaries about Soros. One example is the 2019 documentary Soros, which delves into his life, career, and controversies.
- “It's not whether you're right or wrong, but how much money you make when you're right and how much you lose when you're wrong”
- “Once we realize that imperfect understanding is the human condition there is no shame in being wrong, only in failing to correct our mistakes.”
3. Paul Tudor Jones
Paul Tudor Jones is the founder of Tudor Investment Corporation, a private asset management company. Jones is best known for predicting the 1987 stock market crash. That year a documentary called Trader was released which provided a behind-the-scenes look at his trading strategies during the 1980s.
His macro trades and consistent returns have made him one of the most successful hedge fund managers of all time. Jones is also pro-crypto and has made large investments in various Web3 and cryptocurrency projects.
- “Don’t focus on making money; focus on protecting what you have”
- “Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead.”
4. Jesse Livermore
Jesse Livermore is an American stock trader who gained and lost several multimillion-dollar fortunes during the early 20th century. At first, this sounds ridiculous that they’re on a list like this, although many famous stock traders are notorious for losing and gaining back all of their wealth.
He’s best known for his role in the 1929 stock market crash and his popular investing book How to Trade in Stocks. Livermore's ability to read the market and his understanding of human psychology made him a legendary figure in the world of trading.
- “The stock market is never wrong”
- “It is not good to be too curious about all the reasons behind price movements”
5. Benjamin Graham
Benjamin Graham is an economist and professional investor, often considered the ‘father of value investing’. His book, The Intelligent Investor, is one of the most popular value investing books to be published.
His investment philosophy has influenced many, including Warren Buffett. So it’s safe to say that Graham’s advice is worth listening to and applying to our own investing strategies/
- “In the short run, the market is a voting machine but in the long run, it is a weighing machine.”
- “The intelligent investor is a realist who sells to optimists and buys from pessimists.”
6. Peter Lynch
Peter Lynch managed the Magellan Fund at Fidelity Investments. He’s best known for his
‘invest in what you know’ philosophy. This is very similar to Warren Buffet's circle of competence philosophy which advocates for investors to only invest in what they deeply understand.
The reason Lynch makes this list is that he had a phenomenal ability to pick growth stocks and led the Magellan Fund to be the best-performing mutual fund in the world (during his tenure). He’s also offered sound advice to many investors and is transparent with his long-term view of investing.
- “Invest in what you know.”
- “The real key to making money in stocks is not to get scared out of them.”
7. Ray Dalio
Ray Dalio is one of my favorite investors, alongside Warren Buffet and Michael Burry. Dalio founded Bridgewater Associates, one of the world's largest hedge funds. He also published one of my favorite books, Principles, which shares his unique (and disciplined) philosophy of life and work.
Dalio is known for this ‘all weather’ investment strategy and frequently shares these ideas on his YouTube channel.
- “If you're not failing, you're not pushing your limits, and if you're not pushing your limits, you're not maximizing your potential.”
- “I just want to be right—I don’t care if the right answer comes from me.”
8. Richard Dennis
Richard Dennis was a commodities trader once known as the ‘Prince of the Pit’. Dennis along with his partner William Eckhardt, conducted the ‘Turtle Trader’ experiment, where they recruited and trained 21 novices to follow their trading rules. They made an enormous amount of profit.
He believed that trading could be taught and proved it by turning a group of novices into successful traders. His story and the Turtle Traders have since become legendary in the world of commodities trading.
- “You have to be willing to make mistakes regularly; there is nothing wrong with it.”
- “I always say that you could publish trading rules in the newspaper and no one would follow them. The key is consistency and discipline. Almost anybody can make up a list of rules that are 80 percent as good as what we taught people. What they couldn’t do is give them the confidence to stick to those rules even when things are going bad.”
9. Stanley Druckenmiller
Stanley Druckenmiller is the former chairman and president of Duquesne Capital. He’s widely respected for his successful bets on currencies and his work with George Soros. Druckenmiller's ability to produce high returns without a single down year has made him one of the best investors in the world.
One thing that separates Druckenmiller is his advice on concentrating investments in areas you have the highest conviction. This is the opposite of other investors' advice which hinges on diversification.
- “Never, ever invest in the present.”
- “I like putting all my eggs in one basket and then watching the basket very carefully.”
10. John Templeton
John Templeton was the founder of the Templeton Growth Fund in 1954, which became one of the world's largest and most successful international investment funds. Beyond just financial advice, Templeton believed in the importance of spiritual wealth and often spoke about the significance of moral and ethical values in life.
Since Templeton was a philanthropist, he established the Templeton Prize in 1972. Over $1m is awarded annually to a living person who has made an exceptional contribution to affirming Templeton's beliefs about life, research, and investing.
- “The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.”
- “I can complain because rosebushes have thorns or rejoice because thorn bushes have roses.”
11. Carl Icahn
Carl Icahn is an American businessman, investor, and philanthropist. He’s the founder and controlling shareholder of Icahn Enterprises, a diversified conglomerate holding company based in New York City. Icahn is considered one of the best traders in the world for taking significant positions in companies and successfully advocating for changes that led to substantial returns for shareholders.
While Icahn was able to influence corporate decisions and unlock shareholder value, he’s said to be one of the most feared figures in boardrooms. And his advice to investors makes that very evident.
- “You learn in this business: If you want a friend, get a dog.”
- “In life and business, there are two cardinal sins. The first is to act precipitously without thought and the second is to not act at all.”
Best advice for investors from famous stock traders
All the investors and stock traders on this list have their own philosophies and advice. While it has worked for them it may not work for you, however, below is a list of advice from each.
- Intrinsic value & long-term perspective: Buffett often emphasizes the importance of investing in companies with a strong intrinsic value and holding them for the long term. This aligns with Templeton's and Icahn's views on seeking undervalued assets and having patience.
- Circle of competence: Both Buffett and Munger advise investing in industries and companies you understand thoroughly. Stick to your ‘circle of competence' and avoid venturing into areas you're unfamiliar with.
- Margin of safety: Always look for a margin of safety in your investments. This means buying assets for less than they're worth, providing a cushion against unforeseen events or market downturns. Also, never bet the house regardless of how sure you think you are.
- Continuous learning: Munger emphasizes the importance of continuous learning and cultivating a multi-disciplinary approach to understanding investments. Like Druckenmiller and Dennis, he believes in forming one's own opinions and not getting swayed by the consensus. In other words, it's not a wise idea to follow the crowd.
- Quality over quantity: This is my favorite piece of advice. Buffett often speaks about investing in ‘wonderful companies at fair prices’ rather than ‘fair companies at wonderful prices’. This also aligns with Druckenmiller's idea of concentrating investments in areas of high conviction.
- Global perspective: As Soros and Templeton suggest, be open to global opportunities and be adaptable when the data or circumstances change.
- Risk management: Protecting capital is paramount. Druckenmiller's advice about not being overly greedy and Dennis's approach both highlight the importance of managing risk effectively.
- Contrarian approach: Templeton, Icahn, and Buffett all highlight the potential benefits of going against the crowd at times, seeking value where others might not see it.