The Greatest Investor of All Time? Hint: It's Not Buffett or Soros

I was recently speaking with a group of students about the world of investing. I asked them, “Who is the greatest investor of all time?”

Their most popular answer was also the most predictable. “Warren Buffett!”

Several students noted Buffett’s consistency. Buffett’s Berkshire Hathaway BRK.A BRK.B holding company is famous for its 19.8% compound annual return, from 1965 through 2023. 

Another student shouted, “George Soros!”

Soros’ returns actually outpaced Buffett, though over a shorter stretch of time. From 1970 through 2000, Soros’ Quantum Fund achieved a compound annual return of about 30%.

Plus, Soros supposedly made over $1 billion in one night, on a British pound short position in September of 1992. Since then, he’s been known as "the man who broke the Bank of England."

Warren Buffett and George Soros are very public figures. Soros has written several books about his trading escapades, and Buffett still appears at annual conferences and on financial television programs.

Buffett and Soros are both 94 years old. Maybe there’s something about this business that keeps the mind sharp well into our golden years.

I told the students that these were very good answers, but that nobody had named the investor that blew the doors off both Buffett and Soros, and just about everyone else. 

Nobody mentioned the code-breaking mathematician who entered the trading arena at the age of 40. By age 50, he'd founded the Medallion Fund, and proceeded to crank out an astounding compound annual growth rate of 66% from 1988 to 2019, perhaps the greatest investing feat of all time.

I’m speaking of Jim Simons. Simons wasn’t press-friendly like Buffett, and didn’t write books about his exploits like Soros. Unlike those gentlemen, he shunned the public eye, and never became a household name. Simons passed away this past May at the age of 86.

Simons was one of the original quant traders. He didn't consider himself a student of the financial markets, but that didn't prevent him from achieving success.

Simons didn’t worry about traditional stock-picking methodologies. He had little concern for technical analysis, fundamental analysis, or any of the traditional valuation metrics. 

If you want to know more about Simons, and the mathematicians and traders that were in his orbit, please read The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution. When TheStreet Pro's writers recently discussed our favorite books, I neglected to mention this one, so I’m sharing it with you now.

At its heart, this is an underdog story. Simons wasn’t born into wealth, and wasn’t particularly educated in the ways of the financial markets. Still, he managed to run circles around his peers, and reached the absolute pinnacle of his profession. If you’re looking for a little inspiration, you might find it here.