Here are five market participants that are arguably the greatest traders and investors of all time when you look at the size of their wins, how famous they are, the duration of consistent returns, and the magnitude and brilliance of their greatest trades.
George Soros gained international notoriety when, in September of 1992, he risked $10 billion on a single currency speculation when he shorted the British pound. He turned out to be right, and in a single day the trade generated a profit of $1 billion – ultimately, it was reported that his profit on the transaction almost reached $2 billion. As a result, he is famously known as the “the man who broke the Bank of England.”
Soros went off on his own in 1973, founding the hedge fund company of Soros Fund Management, which eventually evolved into the well-known and respected Quantum Fund. For almost two decades, he ran this aggressive and successful hedge fund, reportedly racking up returns in excess of 30% per year and, on two occasions, posting annual returns of more than 100%.
Warren Buffett became the richest man in the world through practicing his own edge in investing. Few can duplicate his process because it requires incredible discipline and patience and compounding of returns over decades. He also went from simply investing in stocks through his partnership when he was younger to acquiring whole companies through his holding company Berkshire Hathaway. What is also amazing is that his acquisition of textile company Berkshire Hathaway turned out to be a failure but he was able to convert it to an insurance holding company. With his change in business plans he was able to grow the value of Berkshire Hathaway from $7.60 a share when he purchased it in 1962 to the stock being worth $212,000 in 2016. Warren Buffett will go down as the greatest investor of all time.
Paul Tudor Jones shorting of Black Monday. Paul Tudor Jones correctly predicted on his documentary in 1986 based on chart patterns that the market was on the path to a crash of epic proportions. He profited handsomely from the Black Monday crash in the fall of 1987, the largest single-day U.S. stock market decline (by percentage) ever. Jones reportedly tripled his money by shorting futures, making as much as $100 million on that trade as the Dow Jones Industrial Average plunged 22 percent. Another amazing trade to walk away from with a fortune when so many others were ruined in the aftermath. He played it to perfection. His funds had great consistent returns for decades. “As of March 2014, he was estimated to have a net worth of U.S. $4.3 billion by Forbes Magazine and ranked as the 108th richest American and 345th richest in the world.” According to Wikipedia.
Ed Seykota, first featured in the book Market Wizards has one of the best records of all time for any trader. Ed Seykota’s returns and drawdowns are as good or better than Warren Buffett, George Soros or William J. O’Neil. He is among the trading gods with no doubt. What does he find important in trading success? Mr. Seykota has a keen focus on trader psychology above all other trading dynamics. Seykota’s website Trading Tribe spends more time advising it’s readers on proper trading psychology than anything else
“Mr. Seykota himself has put together a money management track record with returns of roughly +60% net of fees over the three-decade span of his trading career…”
Jesse Livermore made a fortune on his call on the Crash of 1929. Jesse Livermore did not need any computer models, technical indicators, or derivatives to make $100 million dollars ($1.2 billion in today’s dollars) for his own personal account during a time when everyone was bullish and then almost everyone lost their shirts. It was an amazing day when Jesse came home and his wife thought they were ruined and instead he had one of the best trading days of anyone in history. No one made more money in the markets or came back from more bankruptcies than Jesse Livermore. He successfully shorted both the crash of 1907 and the Great Depression crash for some of the biggest trading wins in history. While his weakness was not managing his risk of ruin his strength was he could become a millionaire trading during a trending market over and over again even when starting with a small stake. While in the end he decided to take his own life he lived his life as the world’s greatest trader for half a century. He did not die broke contrary to popular belief, he put money in a trust for himself to ensure he would never be broke again after one of his account blow ups.
What do you think of this list? Are there any names that you would argue are better than these five?