Ask any ASX investor who are their go-to investing experts, and you will likely hear the same names pop up time and time again: Warren Buffett, Peter Lynch and Ray Dalio.
There’s no doubt all three of these investing experts have carved out hugely successful careers in investing. But each has done so in their own unique and distinctive way.
Often, the teachings of these experts will contradict each other. It can make following them a little confusing at times. So how does one manage to tread a path between these fonts of wisdom?
There’s no right answer with investing
The key thing to remember when it comes to investing is that there is no ‘right way’ to go about it. You can be a very successful growth investor, value investor or even speculator (although we Fools think this is more about luck than anything else).
Investing is also about finding the best practice that works for you.
Take Warren Buffett.
Buffett is known as the king of value investing because of his love of buying top-notch companies when they’re temporarily out of favour, or as he once put it “on the operating table”. Buffett only sticks to stocks and regularly disparages other assets like gold and bonds.
Peter Lynch was also a stock picker. He managed his phenomenal track record by uncovering growth companies that others hadn’t come across yet.
Lynch didn’t so much evaluate a company’s past to determine its future value (like Buffett), but rather whether people on the street were talking about it or using its products. In this way, he was able to find a winner and stick with it until the market eventually cottoned on too.
But hedge-fund titan Ray Dalio takes a very different approach to investing.
Dalio is a student of history and economics and loves using different asset classes like gold, bonds and shares to balance risk. He was able to do this so successfully (including through the GFC) that his hedge fund Bridgewater Associates is now the largest in the world.
How to learn from the investing experts
None of these investing experts have similar modus operandi, yet all have achieved resounding success with their investing.
The best way to draw inspiration from them is to first work out which kind of investor you’d like to be. Then you can better determine which of the investing legends’ lessons you can apply to help hone your investing skills.
If you’re a value investor, you could draw mostly from Buffett, maybe looking at beaten-down blue-chips like Coca-Cola Amatil Ltd (ASX: CCL).
But you’d also benefit from how Peter Lynch discovers a future winner, perhaps by looking at retail success stories like Premier Investments Limited (ASX: PMV).
If you like the kind of macro-investing Dalio favours, you can draw from him by investing in alternative asset classes to balance risk. Dalio likes asset ETFs like the ETFS Physical Gold ETF (ASX: GOLD) for example.
Meanwhile, you could also appreciate how Buffett waits for a great price to pay for a company Peter Lynch might have loved. You can always ‘cross-reference’.
Investing greatness isn’t mutually exclusive. There’s nothing stopping you from drawing inspiration from as many investing greats as you can find!
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.