Warren Buffett

Buffett's approach is simple to describe and almost impossible to copy. He buys great businesses at fair prices and then just...

holds them. Forever.

He calls it "buy and hold" but that undersells it — he means hold until the sun burns out. He looks for companies with a real unfair advantage over competitors.

Something that protects them from being wiped out. He calls it a "moat" — like the water around a castle.

Think Coca-Cola. Everyone knows it.

Nobody can replicate it. He puts a LOT of money into a small number of bets — usually his top five holdings make up over 70% of everything.

Most fund managers would have a panic attack at that level of concentration. Buffett calls it being convicted.

His old mentor Graham taught him to hunt for cheap, beaten-down companies and flip them fast. Charlie Munger, his business partner for 45+ years, talked him out of that.

Munger said: just buy the best businesses you can find and never sell. Buffett admits that shift made him hundreds of billions of dollars.

Cathie Wood

Wood is a pure-conviction thematic investor. She identifies technologies she believes will fundamentally change the world — genomics, AI, robotics, blockchain, autonomous vehicles — and concentrates heavily in the companies building those technologies, often before those companies are profitable.

Her time horizon is explicitly five years. She does not care about quarterly earnings.

She cares about whether the technological trajectory is intact.

The approach is genuinely different from most of Wall Street. She is not doing DCF models on current cash flows.

She is forecasting where industries will be in a decade. When she is right about the technology and right about the timing, the returns are extraordinary.

When she is right about the technology but wrong about the timing — or wrong about which companies will win — the losses are severe. 2020 showed the first scenario.

2021–2022 showed the second.

Warren Buffett

Rule No. 1: Never lose money.

Rule No. 2: Never forget Rule No.

1. Buy businesses, not stocks — the distinction matters more than most investors realize.

Let compounding do the heavy lifting and get out of its way. Never use debt to invest.

Be fearful when others are greedy, greedy when others are fearful. Time in the market destroys timing the market in every long enough data set.

For most people, a low-cost S&P 500 index fund will outperform almost any active strategy, including most professional money managers — including, he's said, what most of his estate will go into after he's gone.

Cathie Wood

Wood's philosophy is that the market systematically undervalues disruptive innovation because traditional analysts use short time horizons and conventional valuation methods that don't apply to exponential-growth businesses. She believes five-year time horizons are necessary to capture the full value of technological change.

She also believes concentration is a feature, not a bug: if you're right about a technology platform, owning 20% of your portfolio in it is more rational than owning 1%. She has said repeatedly that she would rather be early and wrong for a period than miss the technology entirely.

Warren Buffett

Buffett's whole thing is: do so much homework that the risk basically disappears. He doesn't diversify across 500 stocks to protect himself — he researches 10 companies so deeply that he's more confident about those 10 than most people are about anything.

He never borrows money to invest. Ever.

He keeps a mountain of cash at Berkshire — over $100 billion sitting around doing nothing — specifically so he can swoop in when everyone else is panicking and selling cheap. He once called derivatives "financial weapons of mass destruction" back in 2002.

Wall Street laughed. Then 2008 happened and Wall Street stopped laughing.

He doesn't predict where the stock market is going. He predicts whether a business will still be dominant in 20 years.

That's it.

Cathie Wood

Wood runs concentrated, leveraged-conviction portfolios with almost no hedging. Her funds can hold 30–50 positions but the top 10 often represent 60–70% of assets.

She does not short. She does not hold cash as a defensive measure.

When the market declines, her funds decline more, because she owns high-beta, high-growth, often unprofitable companies that get hit hardest in risk-off environments. She is explicit about this: if you cannot stomach 50% drawdowns, ARK is not for you.

Many investors found this out the hard way in 2022.

Warren Buffett

Despite a $120B net worth, Buffett still lives in the same gray stucco house in Omaha he bought in 1958 for $31,500. He drives himself to work.

Breakfast is McDonald's — he orders based on his mood: $2.61, $2.95, or $3.17. He plays bridge obsessively, often online with Bill Gates.

He drinks multiple Cokes a day (Berkshire owns a large stake in Coca-Cola; coincidence is left as an exercise to the reader). He has pledged to give away more than 99% of his wealth, primarily to the Bill & Melinda Gates Foundation and his children's foundations.

He takes a $100,000 annual salary from Berkshire. He does not own a smartphone.

Cathie Wood

Wood is a devout Christian and has spoken publicly about faith informing her long-term orientation — she genuinely believes she is investing in technologies that will improve human lives, not just make money. She is a major donor to her church and to Christian educational causes.

She lives relatively modestly for someone running a multi-billion-dollar firm. She does not appear in tabloids.

She is not known for lavish spending. What she is known for is being relentlessly, publicly bullish — even when her funds are down 75%.

Warren Buffett

Apple. Berkshire started buying Apple in 2016 — late by any tech investor's standard, from a man who spent decades insisting he didn't understand technology.

By 2023, the position had grown to over $170 billion, returning more than 800%. Buffett called it the best business he'd ever seen and admitted he should have bought it earlier.

Honorable mention: American Express in 1963 during the Great Salad Oil Scandal, when he put 40% of the Buffett Partnership into AmEx at distressed prices while the rest of Wall Street was running away.

Cathie Wood

Tesla is the defining win. Wood started buying Tesla in 2018 when the stock was around $18 adjusted for splits and the financial press was writing endless stories about whether the company would survive.

She published a price target of $4,000 (split-adjusted $800) that was mocked widely. Tesla's stock went to $400 at its peak — a gain of roughly 2,000% from her early purchases.

ARKK returned 150% in 2020 alone, driven heavily by Tesla. The fund went from $1.9 billion in assets to $17 billion in one year.

The Tesla call is one of the most accurate and most profitable individual stock calls in modern ETF history.

Warren Buffett

Buying Berkshire Hathaway. He bought it in 1962 as a cigar butt — a cheap, dying textile company — and then kept it instead of winding it down into a clean insurance holding company.

The C-corp structure meant decades of tax drag. He has estimated this single mistake — triggered partly by spite after the owner tried to lowball him on a buyout — cost Berkshire and its shareholders roughly $200 billion over 50 years.

He also admits missing Google and Amazon, both of which he understood well enough to buy and simply didn't.

Cathie Wood

The 2021–2022 collapse is the biggest mistake — or more accurately, the biggest risk that came due. After ARKK's extraordinary 2020, Wood did not meaningfully de-risk or trim winners.

She continued buying high-growth, unprofitable tech companies into 2021 as they became more expensive. When interest rates rose in 2022, those companies — which depend on cheap money to fund future growth — were hit extremely hard.

ARKK fell approximately 75% from its February 2021 peak. Investors who bought near the top lost three quarters of their money.

Wood maintained conviction and bought more on the way down. Whether that turns out to be smart or stubborn will depend on what happens to these technologies over the next five years.

Warren Buffett

Warren Buffett was born in Omaha, Nebraska in 1930. He bought his first stock at age 11 — three shares of a company called Cities Service.

He paid $114. He was eleven.

By 14, he owned a 40-acre farm and had filed his first tax return. He applied to Harvard Business School and got rejected.

Best thing that ever happened to him, honestly. He ended up at Columbia instead, where he met Benjamin Graham — the guy who basically invented the idea of buying undervalued stocks.

After graduating in 1951, Buffett started his own investment partnership in Omaha with $105,000 from family and friends. He turned that into something much bigger, compounding at around 30% per year for over a decade.

Then in 1969, he shut it down and quietly took over a dying Massachusetts textile company he had bought partly out of spite. That company was Berkshire Hathaway.

What happened next is the greatest investing run in history — and it started with a grudge.

Cathie Wood

Cathie Wood grew up in Los Angeles, the daughter of Irish immigrants. She studied economics and finance at the University of Southern California under Arthur Laffer — yes, the Laffer Curve guy — who she credits as a formative influence on her thinking.

She started her career at Capital Group in 1977 as an assistant economist, then moved to Jennison Associates where she spent 18 years managing equity portfolios.

In 2001 she joined AllianceBernstein as chief investment officer for global thematic strategies. There she developed the early framework for what would become ARK: thematic investing around transformative technologies.

She pitched the idea internally. They passed.

In 2014, at age 58, she left and started ARK Invest from scratch with $6 million of seed money. That is either inspiring or terrifying depending on how old you are and how risk-tolerant you are.

Warren Buffett

His main vehicle is Berkshire Hathaway — a company he took over in 1965 when it was a dying textile mill. He basically gutted the textile business and turned the whole thing into a giant money machine that owns other businesses.

Today it's one of the most valuable companies on earth. On the stock side, his biggest bet is Apple — worth over $175 billion at its peak.

He also owns huge chunks of Bank of America, Coca-Cola (since 1988 — he really doesn't sell), American Express, and Chevron. Then there are the companies Berkshire owns outright.

GEICO, one of the biggest car insurers in America. Burlington Northern Santa Fe, a massive railroad.

Dairy Queen, See's Candies, Duracell. Basically a random collection of boring, cash-generating businesses that he loves precisely because they're boring.

His first fund — Buffett Partnership Ltd. — ran from 1956 to 1969.

He returned around 30% per year while the market did 8.6%. Then he shut it down, said he couldn't find enough cheap stocks, and walked away at the top.

Cathie Wood

ARK Invest is the company she founded in 2014 and the vehicle through which all her major positions have been run. ARK operates several actively managed ETFs, the most famous being ARKK (ARK Innovation ETF), which holds concentrated positions in companies she believes are driving technological disruption.

At its peak in February 2021, ARKK had over $27 billion in assets under management. By 2022 that had fallen below $7 billion as the fund declined roughly 75% from its high.

Her major individual positions have included Tesla (she was buying when it was under $20 adjusted; it went to $400), Coinbase, Roku, Zoom, Teladoc, and Palantir. She publishes all her trades publicly every day — unusual for an active manager — and shares her full investment theses openly.

She also hosts a weekly podcast, runs a public research blog, and appears on television regularly.

Warren Buffett

University of Nebraska–Lincoln (B.S. in Business Administration, 1950).

Columbia Business School (M.S. in Economics, 1951) — the only school that mattered, where he studied under Benjamin Graham and got his only A+.

He also spent two years at the Wharton School before transferring. Harvard Business School rejected him.

He's described that rejection as one of the luckiest things that ever happened to him.

Cathie Wood

University of Southern California, BS in Economics and Finance, 1981. She studied under Arthur Laffer, the economist behind supply-side economics, who she credits with shaping her long-term, structural view of markets.

She has said the Laffer Curve and its implications about incentives and growth informed how she thinks about technology and innovation.