The Worlds Best Traders
Posted on February 7, 2013 by Michael Fasani.
Who are the worlds best traders is a question I have been researching this week.
I have just spent the last three days trying to write this article, I didn’t expect it to take nearly as long as it has. In my quest to find out who are the greatest traders on earth I have manually researched over 80 different traders, I have been through all of the interviews carried out by Jack D. Schwager and spent hours flicking through the internet on sites like Wikipedia, Bloomberg and Forbes.
Searching this subject on the internet leads to many familiar names and a few less familiar ones. There are twenty or so names that came up again and again. I searched for “famous traders”, “the world’s best traders”, “the world’s most successful traders” and many different variations of that theme. I created my list, which can be found at the bottom of this page and started to work out who would make the final ten.
If I have overlooked anyone who should be listed here then please accept my apology and leave me a comment so I can look into adding them.
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Some of the traders that came up have now passed away, some of them I couldn’t find accurate net worth data for and in at least one case the trader is now in jail. The internet is littered with information on the subject, some of the traders I have looked into have rumoured to of had incredible return on initial capital, most have made life changing single trades and many have made amazing trading predictions. They are all great traders without question.
The question of who are the best traders in the world is really open to subjective opinion. For that reason I have simply used net-worth. I appreciate there may be other ways to try and rank the world’s greatest traders but acquiring accurate information that can be quantified has been very difficult.
All of the top 10 traders listed here are still alive today and have a solid reputation with a documented net worth on Wikipedia. Furthermore they are all billionaires.
Let’s take a look at who has made my list of the 10 best traders in the world today.
1. Warren Buffett – Net-worth: $44bn, Age: 82
Warren Buffett was born August 30, 1930 in Omaha, Nebraska. He is the CEO of Berkshire Hathaway and the primary shareholder. Nicknamed the “Oracle of Omaha”, he still lives in the same house that he bought in 1958 for $31,500, a superb investment as it is now estimated to be worth over $700,000. He became a millionaire in 1962 at the age of 32 and then became a billionaire on paper in 1990 at the age of 60 when he started selling shares in his company Berkshire Hathaway. He became the richest man in the world in 2008 with an estimated net worth of $62bn. Buffett made fantastic losses totalling an estimated $25bn in the 2008/2009 global financial crisis, losing his richest man title to Bill Gates who had held it previously for 13 years prior to Buffett. Buffett has announced that he will give most of his fortune away to philanthropic causes. The largest contribution would go to the Bill and Melinda Gates Foundation. Warren Buffett is a value investor who attributes much of his own success to the teachings of Benjamin Graham. He is considered by most to be the greatest trader in the world.
2. George Soros – Net-worth: $20bn, Age: 82
George Soros was born August 12, 1930 in Budapest, Hungary. He is the chairman of Soros Fund Management. In 1947 at the age of 17 he moved to London and attended the London School of Economics. He worked as a waiter and as a railway porter before writing to every merchant bank in London, eventually getting a placement at Singer & Friedlander. He moved to New York at the age of 26 to work for F. M. Mayer as an arbitrage trader. He eventually started Soros Fund Management in 1970 at 40 years of age. Many great traders have worked for Soros Fund Management including Stanley Druckenmiller, Mark Schwartz, Jim Rogers and Keith Anderson. Soros is an activist and philanthropist, donating large amounts of time and money to philanthropic causes. He is the founder of Open Society Institute which he started to help countries make the transition from communism. Soros has authored and co-authored many books. When Soros speaks many people listen, his predictions are often chilling and accurate. He states that a large portion of his own success comes from his ability to recognise when his own predictions are wrong.
3. John Paulson – Net-worth: $15.5bn, Age: 57
John Paulson was born December 14, 1955 in Queens, New York. He is the founder and President of Paulson & Co. Paulson was a star pupil at a very early age. A very bright young man, he applied to Harvard Business School at the age of 22 where he finished in the top 5% of his class and earned himself an MBA. In 1980 at the age of 25 he landed a job at Boston Consulting as an advisor but desperately wanted to work on Wall Street as a trader. He moved to Odyssey Partners and started to work with Leon Levy and eventually he moved to Bear Sterns. In 1994 at the age of 39 he founded Paulson & Co with $2m and one employee. Paulson made a killing in the sub-prime mortgage crash in 2007 by betting against four out of the five biggest British Banks, many called it the greatest trade ever made. It made him a billionaire, making $3.7bn in a single year. Paulson & Co now employs approximately 120 people and manages $24bn of assets.
4. Steven A. Cohen – Net-worth: $8.8bn, Age: 56
Steven Cohen was born June 11, 1956 in Great Neck, New York. He is the founder of SAC Capital Advisors. Cohen studied economics at the University of Pennsylvania where he earned his degree in 1978. He opened up his first brokerage account with $1,000 of his own tuition money. At 22 he got a job as a junior trader for Gruntal & Co and on his first day he made $8,000. He went on to make the company approximately $100,000 per day and ended up managing $75m in assets and six other traders. In 1992 at the age of 34 he started SAC Capital Partners with $20m of his own money. In November of 2012 Cohen was implicated in an insider trading case where he pleaded not guilty. Cohen had been signing off positions for an ex-SAC manager Matthew Martoma, prosecutors lack proof that Cohen knew the trades were being placed on inside information. SAC are cooperating with the government’s inquiry.
5. David Tepper – Net-worth: $5.5bn, Age: 55
David Tepper was born September 11, 1957 in Pittsburgh, Pennsylvania. He is the founder of Appaloosa Management. In 1980 after earning a degree in economics from University of Pittsburgh, he was unhappy with his job at Equibank as a credit analyst and returned to education where he earned himself an MSIA (similar to an MBA) and in 1982 he took a job at Republic Steel, 2 years later he moved to Keystone Mutual Funds and then in the following year he moved to Goldman Sachs where he worked for 8 years as the head trader on the high-yield desk. In 1993 at age 36 he founded Appaloosa Management with Jack Walton. In 2012 the New York times reported that Appaloosa Management manages $14bn of assets, He is now earning himself the title of a philanthropist by donating money to schools and universities.
6. Bruce Kovner – Net-worth: $4.3bn, Age: 67
Bruce Kovner was born February 27, 1945 in the Bronx, New York. He is the founder of Caxton Associates. Kovner attended Harvard College in 1962 where he eventually dropped out, looking into that further it is stated as him having writers block, but his mother hanged herself at their family home in 1965 and I can only imagine how devastating that must have been for him. After university he tried many different jobs including becoming a taxi driver. At the age of 31 he obtained $3,000 from credit cards and turned that into $40,000 trading soybeans. He went on to train under Michael Marcus before starting Caxton Associates at the age of 38 in 1983. Caxton Associates has generated more than $12bn in net gains for investors since the company was founded. Caxton is considered to be one of the largest 10 hedge funds in the world. Bruce Kovner is a prime example of a man who went from zero to hero.
7. Paul Tudor Jones – Net-worth: $3.4bn, Age: 58
Paul Tudor Jones was born September 28, 1954 in Memphis, Tennessee. He is the founder of Tudor Investment Corporation. In 1976 Jones earned his degree in economics from the University of Virginia and started working for E.F. Hutton as a broker. In 1980 he founded the Tudor Investment Corporation. He headed to New Orleans and met with commodity broker Eli Tullis. He learned how to trade cotton futures at the New York Cotton Exchange with Eli as his mentor. It is recorded that Jones tripled his money by predicting Black Monday and taking a large short position in 1987. He is also a philanthropist and supports many different causes, he started the aptly named Robin Hood Foundation which aims to alleviate problems caused by poverty in New York, the majority of the organization backers are hedge fund operators, the foundation is quite literally taking from the rich to give to the poor.
8. Edward Lampert – Net-worth: $3.1bn, Age: 50
Edward Lampert was born July 19, 1962 in Roslyn, New York. He is the founder and CEO of ESL Investments and the chairman of Sears Holdings Corporation. As a young boy with his grandmother he would review her stock picks on a daily basis. His father had his own law firm but unfortunately died at the young age of 47 leaving Lampert and his mother to fend for the family and look after his younger sister Tracey. In 1984 at the age of 22 he earned a degree in economics at Yale University and went straight to work for Goldman and Sachs where he worked with Robert Rubin until 1988. He then founded ESL Investments where Richard Rainwater would give him $28m in seed money and introduce him to new clients. ESL is estimated to be worth over $9bn as of 2004 and has had returns averaging 29% a year. His style of investing involves holding positions in undervalued stocks for several years much like Warren Buffett. He has been called “the next Warren Buffett”. Time will tell if Lampert can turn his $3.1bn fortune into sum as large as Buffett’s.
9. Ken Griffin – Net-worth: $3bn, Age: 44
Kenneth C. Griffin was born October 15, 1968 in Daytona Beach, Florida. He is the founder and CEO of Citadel LLC. Griffin graduated from Harvard University in 1989 where he earned a degree in economics. It is claimed that he would make trades between his classes and that he installed a special satellite modem to get market data in real-time to his dorm. His first fund included money from his grandmother which he used to short the 1987 stock market crash. His path crossed with Frank C. Meyer, founder of Glenwood Capital. Meyer provided Griffin with $1m because of his success rate with his fund and Griffin delivered a whopping 70% return on the investment. As word spread about the young trader, naturally savvy investors would fund him further. In 1990 at the age of 22 Griffin formed Citadel LLC with $4.2m. Citadel Asset Management now manages $12.5bn in assets and is one of the world’s largest hedge funds. Fortune Magazine called Griffin “the youngest of the rich hedge fund managers”.
10. Stanley Druckenmiller – Net-worth: $2.5bn, Age: 59
Stanley Druckenmiller was born June 14, 1953 in Pittsburgh, Pennsylvania. He is the founder of Duquesne Capital. Druckenmiller earned his degrees in economics and English at Bowdoin College in 1975. He started a three year Ph.D in economics at the University of Michigan but dropped out halfway through because he was offered a position at the Pittsburgh National Bank as an oil analyst. After just 1 year working for the bank at the age of 25 he became the head of the bank’s equity research group. In 1981 he founded Duquesne Capital Management and by 1985 he was a consultant for Dreyfus. In 1986 at the age of 33 he moved to Pittsburgh where he was named head of the Dreyfus Fund. Two years later he was hired by George Soros as the lead portfolio manager for the Quantum Fund where they famously “broke the bank of England” by shorting the British Pound when they had calculated that the bank didn’t have enough reserves at the time to prop up the currency. In 2010 he announced that he would be retiring and closing Duquesne Capital Management because of the stress involved in maintaining his incredible trading record while managing such a large amount of funds. Duquesne Capital Management posted average annual returns of 30 percent without a single money-losing year. At the time of closing, Duquesne Capital managed over $12bn in assets.
What can we learn from these men?
One thing that I found interesting but which comes as no surprise is that all of the men listed above have a university degree in either finance or economics. They have all worked extremely hard and been influenced by other great traders during their lifetimes. They have all turned millions of dollars into billions of dollars. They are the greatest traders on Earth and deserve to be listed here. Each one of these men would be a worthy idol to study, many of them have published interviews and books on the subject and each will provide you with an insight into what it takes to become a billionaire trader.
The Greatest Traders in the World
I mentioned earlier I spent a large amount of time on this article and for the benefit of any one reading I have included below a list of names of traders who may be worth some further reading.
- Al Weiss
- Alexander Elder
- Arthur Cutten
- Bernard Baruch
- Bernie Madoff
- Bill Gross
- Bill Lipschutz
- Blair Hull
- Brian Gelber
- Charles Faulkner
- Colm O’Shea
- Dan Zanger
- David Einhorn
- David Ryan
- Ed Seykota
- Edward Thorp
- Gary Bielfeldt
- Gil Blake
- Jack D Schwager
- Jaffray Woodriff
- James B Rogers jr
- Jamie Mai
- Jeff Yass
- Jesse Livermore
- Jim Cramer
- Jimmy Balodimas
- Joe Ritchie
- Joe Vidich
- Joel Greenblatt
- John Burbank
- Kevin Daly
- Larry Benedict
- Larry Fink
- Larry Hite
- Linda Bradford Raschke
- Louis Bacon
- Mark Cook
- Mark Minervini
- Mark Ritchie
- Mark Weinstein
- Martin Schwartz
- Martin Taylor
- Michael Lauer
- Michael Marcus
- Michael Platt
- Michael Steinhardt
- Monroe Trout
- Nicolas Darvas
- Paul Rotter
- Randy McKay
- Ray Dalio
- Richard Dennis
- Richard Driehaus
- Robert Krausz
- Scott Ramsey
- Sir John Templeton
- Stanley Kroll
- Steve Clark
- Steve Kuhn
- Steve Lescarbeau
- Steven Schonfeld
- Tom Baldwin
- Tom Basso
- Tom Claugus
- Tony Saliba
- Victor Sperandeo
- William Delbert Gann
- William Eckhardt
- William O’Neil
Interviews with the World’s greatest Traders with Jack D. Schwager
Jack D. Schwager has published several books containing interviews with some of the worlds best traders. I have included those books here and a list of names of traders who appear in each book.
Market Wizards: Interviews with Top Traders
You can purchase “Market Wizards: Interviews with Top Traders” on Amazon by clicking here.
Traders interviewed in this book: Brian Gelber, Bruce Kovner, David Ryan, Ed Seykota, Gary Bielfeldt, James B Rogers jr, Larry Hite, Mark Weinstein, Marty Schwartz, Michael Markus, Michael Steinhardt, Paul Tudor Jones, Richard Dennis, Tom Baldwin, Tony Saliba, William O’Neil.
The New Market Wizards: Conversations with America’s Top Traders
You can purchase “The New Market Wizards: Conversations with America’s Top Traders” on Amazon by clicking here.
Traders interviewed in this book: Al Weiss, Bill Lipschutz, Blair Hull, Charles Faulkner, Gil Blake, Jeff Yass, Joe Ritchie, Linda Bradford Raschke, Mark Ritchie, Monroe Trout, Randy McKay, Richard riehaus, Robert Krausz, Stanley Druckenmiller, Tom Basso, Victor Sperandeo, William Eckhardt.
Hedge Fund Market Wizards
You can purchase “Hedge Fund Market Wizards” on Amazon by clicking here.
Traders interviewed in this book: Colm O’Shea, Edward Thorp, Jaffray Woodriff, Jamie Mai, Jimmy Balodimas, Joe Vidich, Joel Greenblatt, Kevin Daly, Larry Benedict, Martin Taylor, Michael Platt, Ray Dalio, Scott Ramsey, Steve Clark, Tom Claugus.