Best Traders in the World
A trader is simply an individual who buys and sells assets on any financial market, either for themselves or on behalf of another person or organisation.
Although the nature of the task is similar, traders typically keep onto assets for significantly shorter periods of time in order to profit from short-term trends while investors typically have a longer time horizon.
Among traders, there are a few who have made their mark in history with their skills, foresight, and sharp intellect and have built fortunes. These are counted as the best traders in the world, and given below are some of these.
Born in 1877 in Shrewsbury, Massachusetts, Jesse Livermore got his taste of the stock market when he began posting quotes for a stockbroker at the age of 15 in Boston. From earning millions of dollars to being bankrupt twice, Livermore’s life was witness to the risks and gains of trading earning him the nickname “The Great Bear of Wall Street”.
He bought his first share and earned a profit of $3.12 with a capital of $5. After that he was known for investing only his own money. His first big break came at the age of 24 when he converted $10,000 into $500,000.
By the age of 30 Livermore earned over a million dollars a day during the financial crisis of 1907. However, after that he went bankrupt twice by 1915. At his peak in 1929, he had a net worth of $100 million, estimated to be around $1.5 billion today. He also authored a widely-read book titled How to Trade in Stocks in 1940.
George Soros is known as the trader who “broke the Bank of England” in 1992 with his most legendary bet against the British pound, through which he pocketed $1 billion in profit in just 24 hours.
Born in Hungary in 1930, Soros moved out of his birth nation to migrate to England. He grew as an investment manager and set up the Double Eagle hedge fund in 1969, which was later renamed Quantum Fund.
The Quantum Fund is estimated to have achieved an average annual return of 30% from 1970 to 2000. With the profits from the Quantum Fund, he set up Soros Fund Management LLC in 1973, which is now a family office that manages public and private equity.
At the age of 92, Soros, currently has an estimated net worth of $6.7 billion. He has also used his fortune for philanthropy and funded numerous human rights, democracy, health, and education projects.
Paul Tudor Jones
Born in 1954 in Memphis, Tennessee Paul Tudor Jones is a famous hedge fund trader known for his macro trades, particularly his bets on interest rates and currencies.
He began his trading career as a clerk working for the commodities trader Eli Tullis in the 1970s. He then rose as a trader and came into the spotlight in 1987, when he successfully predicted the “Black Monday” and earned an estimated $100 million even as the Dow Jones Industrial Average crashed 22%.
He founded his hedge fund, Tudor Investment Corp, in 1980, with multi-billion dollars’ worth of assets under management. Jones’ individual net worth is estimated to be nearly $7.5 billion.
Richard Dennis, popularly known as the “Prince of the Pit”, is a legendary floor trader and commodities speculator, who was born in Chicago in 1949.
He borrowed $1,600 from his family, and had $400 left with him in trading money after spending $1,200 on a seat at the MidAmerica Commodity Exchange. His trading boosted the $400 to $3,000 in 1970 and reached over $100,000 in 1973.
In 1974, he made $500,000 trading soybeans and became a millionaire at the end of the year. However, he suffered major losses in the Black Monday stock market crash of 1987 and the dot-com bubble burst in 2000.
He also conducted a famous experiment to launch the “Turtle Traders Group” to prove that anyone could be taught to trade. A few men and women were recruited and taught how to trade futures by him and his friend William Eckhardt. It is estimated that these “Turtle Traders” went on to earn profits of $175 million in four years.
Billionaire John Alfred Paulson, born in 1955, is one of the most successful hedge fund managers globally.
Paulson began his career at Boston Consulting Group in 1980 and moved on to work with companies such as Odyssey Partners, Bear Stearns, and Gruss Partners.
Subsequently, he founded the New York-based investment management firm Paulson & Co in 1994, which he continues to lead to date. He is most famous for cashing in on the global financial crisis of 2007–2008 by betting an enormous amount against the US housing market at the time.
He is said to have foreseen the subprime mortgage crisis and bet against mortgage-backed securities by investing in credit default swaps. This earned Paulson’s company a fortune and his personal earning from this is estimated at over $4 billion.
Born in 1956, Steve Cohen is an American billionaire and famous hedge fund manager and owner of owner New York Mets of Major League Baseball.
He started his career at Gruntal & Co. in 1978 and is said to have made the company around $100,000 a day, and growing to manage a $75 million portfolio and six traders.
He subsequently founded his own hedge fund SAC Capital in 1992 which saw great success over the next two decades. However, Cohen was later implicated in an alleged insider trading scandal.
SAC Capital pled guilty to insider trading charges in 2013 and paid $1.8 billion in penalties and was required to stop handling investments for outsiders. It was subsequently closed. In 2014, Cohen founded global asset management fund Point72 Ventures, which now has assets under management worth over $28 billion.
Michael Burry, born in 1971, is most famous for being one of the first investors to predict and profit from the subprime mortgage crisis that occurred between 2007 and 2010.
Even though he earned his degree as a physician specializing in neurology, he left the medical field to focus on investment. He went on to form his own hedge fund Scion Capital in 2000.
He gained by shorting overvalued tech stocks at the peak of the internet bubble. He then turned his focus to real estate, and correctly predicted that the real estate bubble would collapse as early as 2007. As he capitalised on his assessments, Burry is estimated to have made a personal profit of $100 million at the time and a profit for his remaining investors of over $700 million.
He later shut down Scion Capital to focus on personal investments. Later in 2013, he founded Scion Asset Management LLC, a private investment firm that he manages today.
The best traders’ stories are speckled with failures, fortunes, and speculations. Their journeys to success are established over the years and are filled with risks and learnings.
There are a number of traders that shot to fame for a few years but failed to carry forward their legacy. However, the best traders are the ones that managed to sustain their legacy and make the most of their skills.