The Money Masters
Profiles of nine investors including Graham, Buffett and Fisher
Summary
Train profiles nine investors who had produced exceptional records by 1980, examining the method each used and what distinguished it. The subjects include Warren Buffett, Benjamin Graham, Philip Fisher, T. Rowe Price, John Templeton, Larry Tisch, Robert Wilson, Stanley Kroll and Paul Cabot.
The value of the format is comparative. Train shows that these investors used incompatible methods and produced comparable results, which argues against any single approach being necessary. Graham bought statistically cheap securities and ignored business quality. Fisher bought growth companies and held for decades. Price sought growth industries early. Templeton bought internationally when most American investors did not and concentrated on markets others avoided entirely. Tisch bought whole businesses at depressed prices. Wilson was a short seller. Kroll traded commodities.
What Train identifies as common is not method but disposition: each had a defined approach they could state, each applied it consistently through periods when it did not work, each did their own research rather than accepting others' conclusions, and each was willing to hold positions the consensus rejected.
The book was published in 1980 and the records described end there, which means several subjects' subsequent performance is not covered. Train writes as a journalist and the interviews are the primary source. The specific holdings and market conditions are entirely historical. Its lasting interest is the demonstration that incompatible methods produced comparable results, which shifts attention from technique to consistency.
Key takeaways 8
- Investors using incompatible methods produced comparable long-run records, which argues against any single approach being necessary.
- What the successful investors shared was a defined approach they could state rather than any particular technique.
- Each applied their approach consistently through extended periods when it produced poor results.
- Each conducted their own research rather than accepting conclusions from analysts or from other investors.
- Templeton bought in international markets that American investors ignored entirely, which was the source of his opportunity set rather than any analytical edge.
- Buying whole businesses at depressed prices, as Tisch did, is a different activity from buying securities and produces different risks.
- Willingness to hold positions the consensus rejected was present in every case, and it is the trait most difficult to acquire.
- The book's records end in 1980, which means the subsequent performance of these investors is not covered.
Who should read it
Investors who want a comparative view of incompatible successful methods rather than an argument for one, understanding the records end in 1980.
About John Train
American investment adviser who founded Train, Smith Counsel and wrote profiles of the era's leading money managers.
The Money Masters profiled Buffett, Graham, Templeton and Price while several were still working, setting out each manager's method in a few pages and establishing the format every later investor-profile book uses. Famous Financial Fiascos covers the reverse case, running through manias and frauds from the tulip trade onward.
Who recommended it 3 · 3 direct
“all these people really were helpful in forming and getting me involved in investing”
“There are a few books - really not that many which I believe are indispensable reading for every serious investor: The Money Masters by John Train.”
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