What We Can Learn from History’s Greatest Investors

Over more than three decades in the investment business, I’ve studied countless strategies, styles, and market cycles, but I keep coming back to a few key figures whose approaches left a lasting impression. Jim Simons, Warren Buffett, and Jesse Livermore couldn’t be more different in how they operated, yet each carved a unique and influential path through the investing world. Whether you’re drawn to data, fundamentals, or psychology, there’s something to learn from the way these three giants thought about markets.

Jim Simons and the Science of Systematic Investing

Jim Simons didn’t come to Wall Street in the usual way. He was a mathematician and codebreaker, more interested in patterns than in corporate reports. In the late 1970s, when computers were still rare in finance, he started a small shop that grew into a massive hedge fund called Renaissance Technologies. Over time, it became one of the most successful investment firms in the world. By 2021, Renaissance managed about $130 billion and employed more than 300 people. Most of them were scientists, not Wall Street veterans. Mathematicians, physicists, and computer scientists filled the place, working more like a research lab than a traditional investment firm.

What set Simons apart were the systems he and his team built. They traded almost every asset class—stocks, futures, currencies, and commodities—using models designed to capture small, repeatable edges. Many of the trades lasted only hours or days, but when you’re running thousands of them, the results add up quickly. Their models consistently found recurring mispricings that looked trivial in isolation, yet when compounded over time, produced one of the most remarkable track records in history—about 66 percent per year before fees for decades.

Warren Buffett and the Power of Patient Ownership

Warren Buffett’s path couldn’t have been more different. Early in his career, he followed the “cigar butt” approach he learned from his mentor, Benjamin Graham. The idea was to buy beaten-down companies so cheap that you could still squeeze a last puff of profit out of them. That worked when he managed small sums, but it wouldn’t scale. On the advice of his business partner, Charlie Munger, Buffett changed course. Instead of chasing discarded businesses, he began buying high-quality companies at fair prices and holding them for decades.

The American Express salad oil scandal in 1963 shows how powerful that shift was. When it was discovered that a borrower had faked massive soybean oil inventories, American Express faced huge losses and its stock price collapsed. Most investors headed for the exits. Buffett saw it differently. The scandal hurt the balance sheet, but the brand and the core business—charge cards and travelers checks—were still strong. He invested nearly 40 percent of his partnership’s money in American Express, and within a few years, it tripled. That one decision captured the philosophy Buffett became famous for: ignore the noise, buy quality, and let time and compounding do the rest.

Jesse Livermore and the Psychology of Market Trends

Jesse Livermore’s story is the most dramatic of the three. Known early on as the “Boy Plunger,” he started in bucket shops, betting on stock prices as they came across the ticker tape. He built his fortune not by analyzing companies, but by reading price action and crowd psychology. Livermore believed markets trended because human behavior repeated itself, and if you had the discipline to stick with the trend, you could ride it to big profits.

His most famous trade came during the crash of 1929. As the market climbed to euphoric highs, Livermore quietly built enormous short positions. When the crash hit, his profits were estimated at $100 million—an unimaginable sum at the time. Crowds even gathered outside his office, convinced he had caused the collapse. He hadn’t. He simply read the signs and acted. But his story is also a warning. Livermore made and lost several fortunes over his life, and it ended tragically. His greatest lesson wasn’t just about timing the market—it was about risk management. At Emerald Asset Management, we’re huge believers in risk management, and Livermore’s story is a reminder of why that discipline is so important.

One Philosophy Can’t Fit All: What These Legends Teach Us

The truth is, I don’t believe you can simply follow one investor, one style, or one book and expect to have all the answers. The better approach is to study the lessons from many sources, understand what works and what doesn’t, and synthesize those ideas into your own philosophy. That’s how I’ve built my own investment and risk management process over the years—by taking the best of what I’ve learned and applying it in a way that works for my clients.

These three men represent three completely different ways of approaching markets. Simons built a scientific, quantitative machine that uncovered tiny edges across thousands of trades. Buffett focused on fundamentals, treating stocks as ownership in real businesses. Livermore relied on price and psychology, proving that the market itself can be the most important signal. Simons’ methods are out of reach for most investors, but Buffett’s patience and Livermore’s discipline are valuable lessons that everyone should note.

How We Apply These Lessons at Emerald Asset Management

At Emerald Asset Management, we don’t limit ourselves to just one school of thought. We draw on quantitative tools, fundamental research, and technical analysis because no single approach has all the answers. By blending the strengths of each of these disciplines, we’ve shaped an investment philosophy built on lessons from many places that we believe can stand the test of time.

Emerald Asset Management is an independent, boutique Registered Investment Advisory firm based in Rocky Mount, NC, serving successful executives, business owners, and high-net-worth individuals across Raleigh, Durham, and Chapel Hill. As a fiduciary-led firm with over 30 years of experience, Emerald provides research-driven investment management and strategic financial planning. The firm specializes in individually managed stock and bond portfolios, alternative investments, and risk management strategies. With a disciplined approach and a commitment to clarity, Emerald helps clients navigate complex financial decisions with confidence. They can be reached at (252) 443-7616 or on the web at www.emeraldam.com. 

The information presented is based on sources believed to be reliable and accurate at the time of publication. This material is for educational purposes only and does not necessarily reflect the views of the author, presenter, or affiliated organizations. It should not be construed as investment, tax, legal, or other professional advice. Always consult a qualified professional regarding your specific situation before making any decisions.

Emerald Asset Management is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Emerald Asset Management's investment advisory services can be found in its Form ADV Part 2 and/or Form CRS, which is available upon request.