To become successful in anything, the role of mentors cannot be under estimated. This is because you need to learn from these people and avoid the mistakes that they have done in the past.
A person who fails to learn from people who have gone ahead of them sets himself up for failure. In other words, people who don’t like learning from other people want to re-invent the world which in many cases is not an easy thing to do.
As We have also mentioned many times, there is nothing that happens in this world that has not happened in the past. Quite frankly, this is particularly in the area of trading and investing because of the cyclical nature of the market.
In this article, we will look at some of the best investment and trading gurus you can follow.
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Gurus are not always right
A word of caution is that gurus mentioned in this article are not always correct. Besides, they are all human beings and are often susceptible to mistakes.
For example, Jim Cramer famously recommended that people should buy Bear Sterns before it collapsed. Similarly, Bill Ackman saw shares of Valeant Pharmaceuticals crash from $250 to $10.
Therefore, while it is always good to listen to experts, you should always strive to do your own research. This involves doing your fundamental and technical analysis on the assets you want to trade.
The best trading gurus to learn from
Jim Cramer (@jimcramer)
Jim Cramer founded the underperforming company, The Street. He is also a market commentator at CNBC famed for producing lists of the best companies to buy or go short. He also makes significant reviews of commodities and currencies and the market seems to listen to him.
While not all his projections receive positive reviews, most companies that he recommends tend to go up (or down). They also tend to generate significant debate in the financial circles.
Mohamed El-Erian (@elerianm)
Mohamed El-Erian is the former CEO and CIO of PIMCO investments. Today, he is the chief economic adviser for Allianz, a giant conglomerate that owns PIMCO. He was also the chair of President Obama’s global development council.
When El-Erian appears in Bloomberg or CNBC or when he pens down a piece, the market listens. This is based by his investment credibility he has achieved over the years. For instance, he was accurate on his projection about the Greece crisis and its outcome.
Bill Gross
Bill Gross founded PIMCO which is now one of the largest fixed income companies in the world. Gross, famously known as the Bond King was austed from PIMCO and headed to Janus Investments.
Every month, he releases a note which can be found here. The market loves Gross and whenever he makes recommendations, they listen. You should do that too.
Ray Dalio
Dalio founded BridgeWater Associates which is now among the biggest hedge fund in the world. He is also famous for his presentations on how the economic machine works.
When he speaks, the market listens. His remarks are always thoroughly analysed in the financial markets. You should follow him to understand the market cycles.
William ‘Bill’ Ackman
Ackman is one of our favourite investors of all time. He is the founder of Pershing Square Capital Management a firm he founded 10 years ago after his previous fund failed.
Ackman is a revered activist investor who has achieved a lot for his investors. However, he has also gone through failure particularly in his battle to save Valeant Pharmaceuticals.
By following him, you will learn how to deal with successes and how to avoid the failures he has gone through.
Jim Chanos
Jim Chanos is referred to as the king of short selling. He forecasted the fall of Enron. He also believed that Tesla was overvalued and so he had shorted it.
You should follow Chanos because of his reputation at Wall Street. When he speaks against a company, you can be sure that the immediate reaction will be that of the company moving down.
David Einhorn
Einhorn is a renowned activist investor who founded Greenlight Capital, an activist hedge fund. When he attacks a company, you can be sure of an immediate reaction.
Some years ago, he made a passionate speech at a Bloomberg event which he criticized Pioneer Resources. That day, the company fell by more than 4%.
Dan Loeb
This is also another activist hedge fund manager known for writing scathing attacks to managers. A good compilation of these letters can be found here.
As a result of his experience, his fund has become so successful and his insights can help you become a better investor/trader.
James Simons
Though Simmons is a not a financial professional, he has mastered the art of using mathematics and physics to trade.
As a result, his fund has gained the most. In fact, in 2008 when there was a recession and when many hedge funds closed shop, his fund had its best year gaining 80%.
Jeffrey Gundlach
Gundlach is the founder of Doubleline funds which manages more than $94 billion. He is known for making extraordinary projections which end up to be true. You should follow Gundlach because the street listens to him.
How to choose your personal trading gurus
A common question is how to chose a trading guru to follow. Fortunately, the process has been made easier by using social media and financial media. Today, unlike in the past, it is possible to follow some of the biggest names in finance in social media platforms.
One thing to consider is to look at gurus who are in your industry. If you are a stock trader, find someone who has experience and expertise in the stock market. Similarly, if you are a commodities, you should aim to follow people in that industry.
Related » Why experience is key in trading
Second, always check for their actual performance. Unfortunately, some of the best-known gurus in finance don’t have a good track record when it comes to managing real money.
Therefore, it is important that you understand their experience and real performance. If it is a hedge fund manager, you can easily find disclosures in the internet.
Finally, always try to talk to your guru on a one-on-one basis. You can do this by talking to the person directly via social media or by finding their contact details in the internet. There are several web tools that make it possible for you to get contact details of most people.
Investment Gurus – Useful Links
- Investment Gurus list on GuruFocus
