The financial markets world does not lack examples of booming trading moves from legendary traders. Here are 5 of them:
5. Jesse Livermore’s $100M win during the Great Crash - 1929
Considered one of the greatest short sellers in the history of the U.S. stock market, Jesse Livermore hit the jackpot in the 1920s. It all happened during Wall Street’s Great Crash of 1929 when he made $100 million by building an enormous short position before finally cashing in when the markets plummeted. In today’s money, that would amount to more than $1.5 billion.
20-something years earlier, in 1907, Livermore pocketed $3 million applying the same tactic. Throughout his life, he made & wasted several fortunes worth billions in today’s money. He was renowned for being quite the spender. However, nobody could deny his skills in the art of trading.
4. Andy Hall and his £100M bet against oil – 2003-2008
Andrew Hall, the most successful oil trader of his generation (according to Financial Times), took a risky approach in 2003.
As a Wall Street trader for a commodities company, Hall decided to buy hundreds of millions of dollars worth of long-dated oil contracts in 2003, believing the price had to eventually rise. He waited five years before he was proven right, with oil’s price surpassing even his wildest expectations, reaching $100/barrel from $30/barrel. In 2008, when Hall eventually cashed in $100 million for his employer, he got a monster paycheck for himself too.
3. George Soros and the famous Black Wednesday - 1992
“The man who broke the Bank of England,” George Soros made his legendary move in the financial markets in 1992. Back then, Germany’s currency, the mark, was quickly going down the hill, while the GBP was flourishing, leaving Great Britain with low-interest rates and high inflation. Soros, a hedge fund manager, acknowledged that things would not last and bet that fixed exchange rates could no longer withstand the market’s realities. The British policymakers raised rates to defend the pound in response, but Soros stood on his position and started shorting the pound.
Soon the British government realized it was wasting huge amounts of money trying to keep the national currency afloat and withdrew from the European Exchange Rate Mechanism, a system created for maintaining monetary stability in Europe. On 16th September 1992, now renowned as Black Wednesday, the pound collapsed, and Soros closed his short positions, making $1 billion from his trade.
2. David Tepper and his different approach to the economic crisis - 2009
Hedge fund mogul David Tepper isn’t your typical billionaire. He didn’t make an obscene amount of money from shorting stocks during the 2008-2009 economic crisis. Quite the contrary: he earned almost $7 billion for his hedge fund by betting on the U.S.' stock market recovery.
How was this possible? In early 2009, Tepper started buying primarily banking stocks such as Bank of America and Citigroup, which were ridiculously cheap at that time. Soon enough, by the end of 2009, the value of his holdings skyrocketed, netting his hedge fund close to $7 billion.
1. John Paulson and the subprime crisis predictions – 2006-2008
The U.S. hedge fund manager John Paulson made massive profits for his clients by trading against the U.S. housing market starting from early 2006. That trade paid off spectacularly in the following two years as he gathered $20 billion for clients and employees.
As for his gains, they stood at $4 billion – amongst the largest fortunes accumulated from a crisis in the history of financial markets. And enough for us to rank his move as the greatest on our list.
Sources: wsj.com, businessinsider.com, cnbc.com.
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