2 Quick Investing Tips from a Top Investor

Credit: Fool Editorial Photos

Tom Gayner, Chief Investment Officer at Markel Corporation (and the person you see in the picture at the top of this article), may not be a well-known name in the investing world.

But, his investing track record over the past 15 years suggests that Foolish investors should pay more attention to him.

Over the weekend, Jason Zweig, a journalist with the Wall Street Journal, shared some details about Gayner’s impressive investing acumen: Over the past 15 years, Gayner has led Markel’s investment portfolio to annual returns of 11.3%.

For some perspective, this return far outpaces the 4.2% annualised gain that the S&P 500 – a well-known U.S. market index – has achieved over the same period. At the local front, the SPDR STI ETF (SGX: ES3) – a proxy for the market indicator the Straits Times Index (SGX: ^STI) – has managed an annual return of “just” 8.63% from its inception in 11 April 2002 to the end of last month.

Looking at Gayner’s track record, I think it’s perfectly reasonable to say that investors of all pins and stripes can learn something from him.  Here are two quick investing tips I’ve picked up from Gayner.

Staying humble

“I tell investors, ’You’re smarter than I am, but I’m managing your money. If you see me doing something I shouldn’t be, tell me.’”

– Tom Gayner

With his successful investing career, as mentioned earlier, it may be surprising to know that Gayner is more than willing to listen to investing views from others. In this case, Zweig opines that Gayner is keenly aware of his own limitations.

Being aware of our own limitations is something Foolish investors may want to consider following Gayner’s lead on.

For instance, if an investment thesis is too hard, you may be better off sending it to the “too hard” pile. Alternatively, if you are bullish on a stock, you might want to seek a bearish view to keep yourself in check and ensure that you’ve considered possible downsides.

Letting your winners run

“If you stumble on something that really compounds in value for decades, it can make all the difference. The things you were right about become more and more important as time goes by, while the things you were wrong about become less and less important.”

— Tom Gayner

In another comment, Zweig wrote that Gayner likes to “let his winners run”. Said another way, Gayner prefers to let his shares compound over time.

A good example would be Gayner’s investment into Warren Buffett’s Berkshire Hathaway Inc;  Gayner has held Berkshire’s shares for more than 15 years. Shares of Berkshire have increased by almost three-fold in the 15 years ending 24 May 2015.

Outsized long-term returns are certainly not limited to the U.S. stock market alone. For instance, locally listed glove manufacturer Riverstone Holdings Limited  (SGX: AP4) has enjoyed returns of 123% since 24 May 2010 partly as a result of its solid business fundamentals. If you would like to find out more about the glove manufacturer, you can go here and here.

That wraps it up for this article. For more (free!) investing tips and tricks and to keep up to date on the latest financial and stock market news, sign up now for a FREE subscription to The Motley Fool’s weekly investing newsletter, Take Stock SingaporeIt will teach you how you can grow your wealth in the years ahead.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong owns shares in Berkshire Hathaway Inc and Markel Corporation.