“In the world of finance, history counts for so little. The incredible wonders of the present often overshadow past experience.” — John Kenneth Galbraith
Ever wondered who the greatest investors of all time are?
Andrew Mitchell, the founder of Ophir Asset Management, recently posed this question to ChatGPT and was provided with a list of the top 10. The list sparked a vibrant conversation on LinkedIn.
Fresh off completing the manuscript for Investing in U.S. Financial History, legendary investors were at the forefront of my mind. While ChatGPT’s list wasn’t bad, there were a few glaring omissions and questionable inclusions that piqued my interest.
So, where did ChatGPT go wrong?
There were a few key issues with the list. By focusing solely on US men from the 20th and 21st centuries, ChatGPT displayed biases in nationality, gender, and recency. Additionally, the lack of transparent selection criteria raised concerns about the objectivity of the list.
| ChatGPT’s List of the Greatest Investors |
| 1. Warren Buffett |
| 2. Peter Lynch |
| 3. Benjamin Graham |
| 4. George Soros |
| 5. Ray Dalio |
| 6. Jim Simons |
| 7. Philip Fisher |
| 8. John Paulson |
| 9. Charlie Munger |
| 10. Jesse Livermore |
This led me to dive into what truly defines the greatest investors of all time. Their ability to outperform consistently over an extended period, navigate different market conditions, and avoid reliance on luck are critical considerations.
By applying these criteria, certain individuals on ChatGPT’s list were found lacking. Jesse Livermore, John Paulson, and Peter Lynch fell short on durability and consistency, leading to their exclusion from my revised rankings.
Timeless Investing Virtues
What sets the greatest investors apart are the virtues they embody. The ability to uncover hidden truths, hold convictions, preserve competitive advantages, and perpetuate success are key factors that distinguish the best from the rest.
1. Discovering Hidden Truths
Skepticism, persistence, and creativity are critical traits that help investors unearth valuable insights that others overlook. Charlie Munger, Ray Dalio, and Jim Simons exemplify these virtues through their unique approaches to investing.
Charlie Munger: Skepticism
“Invert, always invert: Turn a situation or problem upside down. Look at it backwards.” — Charlie Munger
Munger’s mastery of inversion allows him to see beyond conventional wisdom and uncover hidden truths that lead to successful investments.
Recommended Reading: Poor Charlie’s Almanack by Charlie Munger
Ray Dalio: Persistence
“There is almost always a good path that you just haven’t figured out yet, so look for it until you find it rather than settle for the choice that is then apparent to you.” — Ray Dalio
Dalio’s relentless pursuit of truth and willingness to confront uncomfortable realities set him apart as a great investor.
Recommended Reading: Principles by Ray Dalio
Jim Simons: Creativity
“I don’t know why the planets orbit the sun … That doesn’t mean I can’t predict them.” — Jim Simons
Simons’ innovative approach to investing, focusing on market inefficiencies and leveraging complex strategies, highlights the importance of creativity in achieving exceptional results.
Recommended Reading: The Man Who Solved the Market by Gregory Zuckerman
2. Conviction
The ability to hold strong convictions, even in the face of opposition, is a hallmark of successful investors. Warren Buffett, Hetty Green, and George Soros demonstrate the power of patience, thrift, and resilience in achieving long-term success.
Warren Buffett: Patience
“The stock market is a device for transferring money from the impatient to the patient.” — Warren Buffett
Buffett’s unwavering patience and ability to let investments compound over time have been key drivers of his success.
Recommended Reading: The Essays of Warren Buffett by Lawrence A. Cunningham and Warren Buffett
Hetty Green: Thrift
“I smoke four-cent cigars and I like them. If I were to smoke better ones, I might lose my taste for the cheap ones that I now find quite satisfactory.” — Edward Robinson, Hetty Green’s father
Green’s frugality and resilience in the face of financial challenges highlight the importance of thrift in maintaining investment positions during tough times.
Recommended Reading: “The Story of Hetty Green: America’s First Value Investor and Financial Grandmaster” by Mark J. Higgins, CFA, CFP
George Soros: Resilience
“If I had to sum up my practical skills, I would use one word: survival.” — George Soros
Soros’ ability to weather financial storms and remain steadfast in his investment decisions showcases the importance of resilience in achieving long-term success.
Recommended Reading: The Vandals’ Crown by Gregory J. Millman
3. Preservation of Competitive Advantages
The ability to maintain competitive advantages and protect one’s edge in the market is crucial for long-term success. Jay Gould, J. Pierpont Morgan, and Benjamin Graham exemplify the importance of discretion, integrity, and benevolence in sustaining a winning strategy.
Jay Gould: Discretion
“Never tell anyone what you are going to do till you’ve done it.” — attributed to Cornelius “The Commodore” Vanderbilt
Gould’s ethical shortcomings aside, his ability to maintain discretion in his actions kept him ahead of the game in a cutthroat market environment.
Recommended Reading: Jay Gould, His Business Career by Julius Grodinsky
J. Pierpont Morgan: Integrity
“The first thing is character. Before money or anything else. Money cannot buy it. A man I do not trust could not get money from me on all the bonds in Christendom.” — J. Pierpont Morgan
Morgan’s commitment to integrity and putting his clients’ interests first set him apart from the crowd in the lawless financial landscape of his time.
Recommended Reading: The Panic of 1907 by Robert F. Bruner and Sean D. Carr
Benjamin Graham: Benevolence
“The chief burden on my mind [during the Great Depression] was not so much the shrinkage of my fortune as the lengthy attrition … Add to this the realization that
