Studying the investment history of some of the most successful investors in the world can help teach us methods they used so we can apply them in our own investing. Westar Energy Inc., a 1-Star Business Predictability ranked company, has been owned by multiple successful investors over the years.
What is interesting is the diversity of holding periods. Some gurus, such as Paul Tudor Jones, hold for short periods of time. This holding pattern is characteristic of short term traders. It could be a few minutes to a few weeks, but it is clearly not a long-term buy and hold strategy. Owning 1,327 stocks, with 480 new just this quarter, Paul Tudor Jones (Trades, Portfolio) is a wonderful example of the short-term trading discipline.
Other gurus, like Mario Gabelli of GAMCO investors, have long-term holding periods. Characteristic of many value-oriented funds, Mario only had 47 new holdings out of 880 or 6% turnover/quarter.
The important thing all investors look to achieve is profit. Whether it is a short term trade or long term investment does not matter. As seen in Paul Tudor Jones (Trades, Portfolio)' WR holding returns, it can be successful being a short term trader. From 0 quarter end shares to 14,500 and back to 0 the next quarter, this is the behavior of a short-term trader.
A more concentrated investment compared to Paul Tudor Jones (Trades, Portfolio)', Mario Gabelli (Trades, Portfolio)'s long-term holding's have also been profitable. Notice the gradual decline in quarter end shares. As the average price rose, the number of shares declined. This was a profitable time for Mario to invest in Westar Energy.
Short-term trader or long-term investor matter not. What unites them is their history of successful investing. Both can be profitable.
The important thing is to identify the strategies of investors with a proven track record. Find out who you are and what investing method you prefer. Identify gurus that fit your investing personality. Study them. Revisit their past purchases. Identify why the trade was successful. Examine their mistakes and be able to explain how to prevent that error from occurring again. Become a better investor.
Thanks to Gurufocus for displaying charts of the world's most successful money managers.
