The Wisdom of the Legendary Paul Tudor Jones

At 56, Paul Tudor Jonesis a  self made billionaire with a net worth of 3.3 billion and is ranked as the 336th richest  person in the world, he  knows exactly how to trade the biggest money for the biggest returns. One of Jones’ earliest and major successes was anticipating and trading through Black Monday in 1987, tripling his money during the event due to large short positions. The Dow Jones Industrial Average dropped by 508 points to 1738.74 (-22.61%) on that day. While the majority of others lost more than they ever had in their lifetime, Jone’s was on the other side of their trade making a fortune. That is the sign of a truly great trader making money at the tipping points that most others miss.  Paul Tudor Jones has returned double digit annual returns to his investors for decades. He is one of the greatest traders to have ever lived, we need to sit up and listen closely to his advice, it is priceless.

Risk Management

“Don’t focus on making money; focus on protecting what you have.”

“Where you want to be is always in control, never wishing, always trading, and always, first and foremost protecting your butt.”

“At the end of the day, the most important thing is how good are you at risk control.”

Trader Psychology

“Every day I assume every position I have is wrong.”

“Losers average losers.”

“Trading is very competitive and you have to be able to handle getting your butt kicked.”


“I believe the very best money is made at the market turns. Everyone says you get killed trying to pick tops and bottoms and you make all your money by playing the trend in the middle. Well for twelve years I have been missing the meat in the middle but I have made a lot of money at tops and bottoms.”

“The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge.”

“The concept of paying one-hundred-and-something times earnings for any company for me is just anathema. Having said that, at the end of the day, your job is to buy what goes up and to sell what goes down so really who gives a damn about PE’s?”
“The whole world is simply nothing more than a flow chart for capital.”
That cotton trade was almost the deal breaker for me. It was at that point that I said, ‘Mr. Stupid, why risk everything on one trade? Why not make your life a pursuit of happiness rather than pain?’

Here is a link to a documentary that he filmed for public television in 1987. Click here for > PBS Documentary on PTJ.

(Republished from December 4th, 2011. The sites most popular article)