The greatest investors have long track records of generating market-crushing returns over their investing careers. Their successes, in turn, enrich the investors who entrust them with their money. Their uncanny ability to create wealth is what makes them famous.
Here's a closer look at some of the most well-known investors in the world:
1. Bill Ackman
1. Bill Ackman
Bill Ackman manages hedge fund Pershing Square Capital Management. He has a history of producing impressive returns. In the 18-year period from 2003 to 2021, Ackman generated a 17.1% annualized return, significantly outperforming the S&P 500’s (SNPINDEX:^GSPC) 10.2% annualized return. Like many investors, Ackman’s performance has suffered during the stock market sell-off of 2022, with his fund falling 1.7% through the first three months of the year. However, that still outperformed the S&P 500 by about three percentage points.
One of the keys to Ackman’s sustained success is his activist investing approach. Ackman purchases large stakes in public companies that he believes would be more valuable by making certain operational or structural changes. After acquiring an influential stake, he then uses that influence to compel the company to adjust its business. Ackman sells his holdings once the company reaches his target value.
2. Benjamin Graham
2. Benjamin Graham
Benjamin Graham was an investing pioneer. He invented the concept of value investing in the 1920s -- an approach that prioritizes buying stocks priced below their intrinsic values. Graham wrote two of the most famous books on investing, Securities Analysis with David Dodd and The Intelligent Investor. As both a lecturer at Columbia University and a fund manager, Graham played a formative role in Warren Buffett's ascent as a value investor.
3. Warren Buffett
3. Warren Buffett
Buffett might be the most famous investor of all. Known as the "Oracle of Omaha," he worked for and learned from Graham until the value investing pioneer retired. Buffett then proceeded to establish his own investing partnership to focus on buying stakes in quality companies at fair prices.
In 1965, he purchased textile maker Berkshire Hathaway (BRK.A 0.19%)(BRK.B -0.09%) and turned it into a holding company for his growing investment portfolio. Berkshire Hathaway's portfolio contains sizable stakes in many public companies across a wide range of industries. He's made Berkshire Hathaway into an insurance, energy, and industrial powerhouse that owns some of the world's most iconic brands.
Buffett's investing approach has produced awe-inspiring investment returns over many years. Since 1965, Berkshire Hathaway has produced an average annual return of 20% -- almost double the performance of the S&P 500 during the same period. To put that outperformance into perspective, the stock could fall 99% and still come out ahead of the broader market.
4. John (Jack) Bogle
4. John (Jack) Bogle
Jack Bogle founded the Vanguard Group in 1975. He pioneered the no-load mutual fund, which, by eliminating reliance on third-party brokerages, doesn't charge a sales commission. He also created the first low-cost index fund, called the Vanguard 500, which aimed to match the S&P 500's performance in exchange for only a minimal fee. His approach, which has only grown more popular with the rise of exchange-traded funds (or ETFs, a type of index fund), enables investors to capture returns aligned with the broader market without paying excessive fees.
5. Cathie Wood
5. Cathie Wood
Cathie Wood is the founder, CEO, and chief investment officer of ARK Invest, an investment management company that establishes and actively manages a portfolio of ETFs. Founded in 2014, ARK Invest had expanded its assets under management to $24 billion by early 2022. One of the firm's top ETFs, the ARK Innovation ETF (NYSE:ARKK), has produced a 177% gain over the past five years as of early 2022. While that’s well below its peak due to the sell-off in tech stocks, it was still ahead of the S&P 500’s 106% return in the same period. Further, Wood believes the sell-off is an opportunity for long-term investors. Although her fund targets a 15% annualized return over a five-year period, she sees the potential for more than 50% returns in the future as the market recovers.
6. Peter Lynch
6. Peter Lynch
Peter Lynch made a name for himself as an investor by managing the Fidelity Magellan Fund (FMAGX 0.89%), a mutual fund sponsored by Fidelity Investments. Between 1977 and 1990, Lynch increased the fund's assets under management from $20 million to more than $14 billion. The Fidelity Magellan Fund outperformed the S&P 500 in 11 years of his 13-year tenure, producing an average annual return of 29%.
Lynch has authored several classic books on investing, including One Up on Wall Street, Beating the Street, and Learn to Earn (with the latter co-authored with John Rothchild). Lynch's work contains many invaluable investing tips.
7. Carl Icahn
7. Carl Icahn
Carl Icahn, like Bill Ackman, is an activist investor who acquires significant stakes in public companies to force changes that Icahn believes will increase shareholder value. In the late 1970s and early 1980s, Icahn developed a reputation for being a "corporate raider" -- someone who engineers hostile takeovers of companies and then slashes costs and sells assets to boost the value of the corporate raider's shares.
Icahn focuses his activism on companies that he believes are undervalued due to mismanagement, and he often seeks to force changes related to a company's leadership team and its governance.
8. Chamath Palihapitiya
8. Chamath Palihapitiya
Chamath Palihapitiya is a venture capitalist, engineer, and the CEO of Social Capital. Palihapitiya was an early senior executive at Meta Platforms (META 0.28%) (formerly Facebook), and is also a non-professional investor. He left Facebook in 2011 to establish The Social+Capital Partnership (renamed as Social Capital in 2015), a venture capital fund focusing on technology companies.
Palihapitiya uses the special purpose acquisition company (SPAC) structure to profit from taking companies public. Past SPAC merger targets include Richard Branson's space company Virgin Galactic (SPCE -2.93%), the online real estate company Opendoor Technologies (OPEN 4.58%), financial services company SoFi (SOFI -0.14%) and the data-driven health insurance provider Clover Health (CLOV -9.53%). Shares of the four companies lost an average of 30% of their market value in 2021 as the stock market started to slide. Although Palihapitiya’s notable investments have underperformed, he’s earned the reputation of a “SPAC King'' for his ability to bring innovative companies to the public market.
9. George Soros
9. George Soros
George Soros founded the hedge fund company Soros Funds Management in 1973, which later became the Quantum Fund. He's an aggressive and highly successful hedge fund manager who consistently generates annual portfolio returns of more than 30%, with the gains for two of those years exceeding 100%. Soros nets spectacular gains by making massive directional short-term bets on currencies and securities, including stocks and bonds.
10. Sallie Krawcheck
10. Sallie Krawcheck
Sallie Krawcheck is the CEO and co-founder of Ellevest, a digital-first, mission-driven investment platform for women. She also chairs the Pax Ellevate Global Women's Leadership Fund (PXWEX 0.94%), a mutual fund focused on companies that rate highly for advancing women.
Before those roles, Krawcheck led some of Wall Street’s biggest names, including serving as the CEO of Merrill Lynch, Smith Barney, US Trust, Citi Private Bank, and Sanford C. Bernstein. Krawcheck is on a mission to help women reach their financial and professional goals and narrow the gender pay and wealth gap.
In June 2022, The Motley Fool had the chance to chat with Krawcheck on our podcast.
11. John Templeton
11. John Templeton
John Templeton is considered one of the best contrarian investors. During the Great Depression, he famously bought 100 shares of each company listed on the New York Stock Exchange that traded for less than $1. That simple, bold wager made him a very wealthy man. He founded his flagship mutual fund, the Templeton Growth Fund, in 1954 and produced annualized returns exceeding 15% over 38 years. He also pioneered international investing, having established some of the largest and most successful cross-border investment funds. He eventually sold his firm, Templeton Funds, to the Franklin Group, which is now Franklin Resources (BEN -0.12%).
12. David and Tom Gardner
12. David and Tom Gardner
We would be remiss if we did not give an honorable mention to David and Tom Gardner, who co-founded the multimedia financial services company The Motley Fool in 1993 to help people achieve financial freedom. Since launching their flagship Stock Advisor service in February 2002, the Gardner brothers have delivered a 353% total return to their subscribers through May 9, 2022 -- vastly outperforming the S&P 500's 123% gain during that time period. The Gardner brothers recommend stocks to subscribers and invest in those same stocks themselves.
Other famous investors
The above list is not exhaustive. Many other investors have earned name recognition for their ability to deliver market-beating returns year after year. For example, while Warren Buffett and John Templeton are some of the most famous value or contrarian investors, Jim Rogers, Marc Faber, and others have also earned reputations for their value investing success. Several investors, including Thomas Rowe Price Jr. and Phillip Fisher, have made names for themselves by successfully investing in growth stocks, and both are considered "fathers" of growth investing.
Not all famous investors earned their public image by creating wealth via the stock market. Billionaire real estate investors Sam Zell, Stephen Ross, and Donald Trump are famous for their ability to profit from real estate investments. Meanwhile, Bill Gross -- dubbed the "King of Bonds" -- eschewed the stock market in favor of bond investing.
What do most famous investors have in common?
As this list shows, anyone can be a highly successful investor. However, one of the keys to success for the most famous investors is that they have a long-term mindset. Anyone can have a down year, which has been the case for many famous investors in 2022. However, the key to being successful is to press through the challenging times. That’s evident in the following chart:
| Decade | S&P 500 price return | Return excluding the 10 best days per decade |
|---|---|---|
| 1930 | -42% | -79% |
| 1940 | 35% | -14% |
| 1950 | 257% | 167% |
| 1960 | 54% | 14% |
| 1970 | 17% | -20% |
| 1980 | 227% | 108% |
| 1990 | 316% | 186% |
| 2000 | -24% | -62% |
| 2010 | 190% | 95% |
| 2020 | 18% | -33% |
| Since 1930 | 17,715% | 28% |
Investors who abandoned the market and missed its 10 best days in any given decade significantly underperformed those who stuck with investing during the tough times. It’s during challenging times that the best investors are buying so that they don’t miss the eventual recovery.
Another characteristic that famous investors share is their focus on and mastery of one specific approach to investing. Whether it's identifying value stocks, growth stocks, or pushing for change as an influential activist, these famous investors earn outsized returns by leveraging their deep investment knowledge and staying focused on the strategies that delivered consistent profitability.
