Five successful investors you've never heard of

These five investors don't pop-up in the papers, but they have made money.

|
Mary Altaffer/AP/File
A Wall Street street sign is framed by a giant American flag hanging on the facade of the New York Stock Exchange, Tuesday, Sept. 8, 2015.

Can you name any outrageously successful investors besides Warren Buffett?

If you can't, the rise in popularity of passively managed index funds may be the culprit. However, that doesn't mean that legendary investors have disappeared.

Remember that 20% to 35% of actively managed funds still beat the benchmark for their category, so investors who regularly beat the market do exist. Here are the profiles of five wildly successful investors you've likely never heard of.

1. Joel Tillinghast

When most folks think about Fidelity Investments, their thoughts likely turn to superstar investor Peter Lynch. And for good reason: During his 13-year tenure as the head of Fidelity's Magellan Fund, Lynch transformed $18 million in assets under management to more than $14 billion.

However, the investing pros keep closer tabs on what Joel Tillinghast is doing. Not only is Tillinghast a personal hire from Peter Lynch, but Tillinghast also holds a mind-blowing record 25 years of successful stock picking. In 1989, Tillinghast launched the Fidelity Low-Priced Stock Fund [MUTF: FLSPX], which has an average annual return of 14.35% since the fund's inception and holds over $44.18 billion in assets.

His knack for value investing (preferring to buy stocks with a price below $35), photographic memory (ability to recall facts about each of the 900 companies he owns), and mathematical ability make Tillinghast a force to be reckoned with.

2. Will Danoff

To talk about Will Danoff is to talk about the Fidelity Contrafund [MUTF: FCNTX], which Danoff launched in 1990 and continues to manage until today. Contrafund is so large (about $113.2 billion in assets) that $1 of every $8 invested in Fidelity's stock funds is invested in Contrafund.

Not impressed yet? Danoff is the single manager of the Contrafund. In comparison, Tillinghast co-manages the Low-Priced Stock Fund with six other managers. Under his leadership, the Contrafund has achieved an average annual return of 12.50% in its lifetime. No wonder when asked about his opinion of the U.S. stock market in April 2015, Danoff replied, "This is a good pond to go fishing in." (See also: America Is Back: 4 Economic Predictions for 2015)

3. Howard Marks

With an estimated personal net worth of $2 billion, Howard Marks ranks #318 in Forbes'2015 list of U.S. billionaires. A former Citicorp analyst, Marks founded Oaktree Capital Management, focusing on high-yield bonds, distressed debt, and private equity. Today, Oaktree Capital Management is a global investment firm trading on the New York Stock Exchange [NYSE: OAK] and managing over $103 billion in assets.

Besides his exceptional record, Marks has built a strong fanbase through his much-discussed letters to investors (dubbed "Oaktree memos"). Many investors find them chock full of actionable data. For example, he called out the economic troubles of Greece as early as July 2010 in one of his memos. His book The Most Important Thing: Uncommon Sense for the Thoughtful Investor has been praised by investing legends Warren Buffett and John C. Bogle. (See also: The 8 Classic Personal Finance Books You Must Read)

4. Ed Owens

Here is another case of an exceptional investor living in the shadow of another. The champion of low-cost index funds, John C. Bogle is and will most likely continue to be the face of Vanguard. However, Ed Owens contributed as much as Bogle to Vanguard's success.

Since its creation in 1984, the $54.4 billion Vanguard Health Care Fund [MUTF: VGHCX] has outperformed every U.S. equity mutual fund. From 1984 until his retirement in 2011, Owens managed this fund and maintained a spectacular 16% annualized return. In comparison, the S&P 500 returned only 11% during the same period.

When asked what was the most important lesson he'd learned in the 28 years he ran his fund, Owens answered, "When you hear people say that 'It's different this time,' it's not. The process of valuing securities is the same as it was in the 1980s."

5. Joe Rosenfield

There are very few investors with better returns than Warren Buffett. One of the investors that could surely give Buffett a run for his money was American businessman Joe Rosenfield. Best known for turning $11 million into more than $1 billion for the endowment fund of Grinnell College, Rosenfield was not only good friends with Buffett but also with Robert Noyce (a.k.a. "The Mayor of Silicon Valley").

Rosenfield had an uncanny talent for recognizing top investment opportunities. For example, he invested in the Sequoia Fund [MUTF: SQUX] between the 1977 and 1997 period in which the fund outperformed outperformed 94% of all diversified U.S. stock funds and beat the S&P 500 by 2.7% per year.

This successful investor always had the interest of Grinnell College in mind and, besides managing the endowment fund, created the Rosenfield Scholarship, which has helped over 200 students pay for a Grinnell education.

This article is from Damian Davila of Wise Bread, an award-winning personal finance and credit card comparison website.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Five successful investors you've never heard of
Read this article in
https://www.csmonitor.com/Business/Saving-Money/2015/0915/Five-successful-investors-you-ve-never-heard-of
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe