Most of the time, investors have to choose a side: Team Buffett or Team Soros...
The successes of investors Warren Buffett and George Soros are legendary. Whether it's Soros making $1 billion when he "broke the Bank of England" or Buffett's 1,550% return on Coca-Cola's stock, few have been more successful in the markets than these guys.
But if you're going to try modeling your investing on these legends... you usually have to pick one or the other. Their strategies take opposing views of volatility and risk.
Most of the time, you have to be on either Team Buffett or Team Soros.
Buffett is known for his caution and his devotion to stocks with fundamentally strong businesses. He's a long-term investor, not a speculative trader. And he has proven that his strategy works in the long run – with returns that crush most speculators.
As Buffett famously put it, "Only when the tide goes out do you discover who's been swimming naked." It's another way of saying that a bull market gives cover to overly risky bets. But if you've been taking on risk without doing your due diligence and covering your downside, you'll be exposed when the bubble bursts.
Meanwhile, Soros loves to join powerful market trends. As he remarked in 2009, "When I see a bubble forming, I rush to buy, adding fuel to the fire."
To Soros, a speculative frenzy isn't a red flag. It's an opportunity... When markets detach from fundamentals, they can rip higher at rates that simply can't happen when earnings growth has it pegged down.
At times like these, Soros' philosophy is to throw out the fundamentals and ride investor psychology instead.
You have two of the most successful investors of all time offering totally contrary wisdom.
Soros wants to skinny-dip until the very last wave rolls in. Buffett says to be careful and to wear your trunks.
It's a fundamental question that underpins investing...
You see something happening – you see the trend shaping up and money moving. Is it time to jump on the trend and ride the wave? Or do you bet on "reversion to the mean" where things return to their true value?
Most of the time, there's no single correct answer.
I tend to be more conservative and focus my portfolio on quality businesses trading at reasonable valuations. I don't mind missing out here and there on some hot trend... I let my wealth compound over time.
For the most part, I'd pick Team Buffet over Team Soros.
Stansberry's newest analyst, Matt McCall, is more on the side of Team Soros. He wants to ride powerful market trends. Specifically, he wants to ride changes in technologies that will play out for years to come.
I'm talking about electric and autonomous vehicles, advances in medicine, 5G, and blockchain technology. Matt believes all of these advancements are in the early stages of a boom and there are years left to profit – despite all the attention they have received from investors over the past couple years and months.
For only a little while longer, you can get access to Matt's new research service where he'll share his picks that he believes could produce 1,000% gains. The offer closes soon, so be sure to check out Matt's presentation if you haven't already.
What We're Reading...
- Something different: How to start investing in real estate, according to a 25-year-old who co-owns five properties worth over $9 million.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
October 27, 2021