Everyone is interested in making that one life changing investment call that creates a financial step change. Sure Buffett is ok with his ability to make great decisions repeatedly for 60 years. But we all want that one really big score.
International Business Times Put Together their top ten
http://www.ibtimes.com/articles/98377/20110106/greatest-trades-of-all-time.htm#
1. John Paulson's bet against subprime mortgages
John Paulson is the famous hedge manager who correctly predicted the subprime mortgage crisis and profited enormously from it.
His trade made his hedge fund $15 billion in 2007 alone. It propelled him from relative obscurity to stardom and his hedge fund to become the third largest in the world.
Paulson does indeed deserve the title of having made the greatest trade ever.
First, he bet big on the largest economic event of the last 70 years and earned billions doing it.
Second, only a handful (less than 10, probably) of players on Wall Street profited enormously from this momentous event. Indeed, compared to other trades on the list, Paulson's prediction is one of the most exclusive.
Paulson isn't even a global macro trader (his background is in merger arbitrage) so it is highly puzzling but impressive that he came up with such an impeccable and spot-on analysis.
He should also be credited for being bold enough to believe in his analysis and ignore his oblivious Wall Street colleagues.
2. Jesse Livermore's call on the Crash of 1929
Jesse Livermore is a legendary speculator from early in the 20th century.
He is famous for correctly predicting both the 1907 and 1929 stock market crashes. The 1929 stock market crash and the subsequent Great Depression was the most significant U.S. economic event in the 20th century.
For his 1907 call, Livermore made $3 million, which is equivalent to almost $70 million today. After his 1929 trade, he was worth $100 million, which is equivalent to over $1.2 billion today.
Like Paulson, Livermore scores points for the high impact of the events he predicted and the amount of money he made.
Furthermore, he made his fortune without the benefit of having a hedge fund (i.e. massive amounts of money from investors) and using fancy derivative instruments.
One last point in Livermore's favor is that he became successful with less educational resources and mentors than modern speculators.
In fact, Livermore is considered a pioneer in the art of speculation and top traders still swear by the Reminiscences of a Stock Operator, a book based on his trading philosophy and career.
3. John Templeton's foray into Japan
Sir John Templeton, born in 1912, is a pioneer of the mutual fund industry and a legendary investor.
In the 1960s, when Japan was beginning its three-decade long economic miracle, Templeton was one of the country's first outside investors. At one point, he boldly put more than 60 percent of his fund in Japanese assets.
Before his brilliant call on Japan, Templeton also correctly assessed the economic impact of World War II, which was the second most important economic event of the 20th century.
In 1939, he put $100 each in 104 U.S. stocks that were trading below $1. In just 4 years, this portfolio quadrupled.
In addition to the fact that he predicted important events, Templeton gets points for being a true pioneer.
Back in the 1960s, people weren't really familiar with the concept of investing in Asia and Japan's export-driven model wasn't yet proven. It took someone of Templeton's ingenuity, courage, and foresight to lead the way.
4. George Soros' breaking of BOE
George Soros put the hedge fund industry on the map in 1992 after he broke the Bank of England (BOE) by shorting 10 billion worth of pound sterling and forcing the U.K. to withdraw from the European Exchange Rate Mechanism (ERM).
Soros made $1 billion in the process, which was an unimaginable sum back then.
Why isn't Soros, probably the most (in)famous trader in the world, and shorting the sterling pound, his most famous trade, ranked higher?
Not to belittle Soros' accomplishments, but the analysis behind it wasn't as difficult as some of the other trades on this list.
Indeed, there were copycats that made the same trade as Soros. Also, far more people recognized the unsustainability of the ERM than those that saw the dangers of the subprime mortgage market.
Moreover, it was Soros' partner Stanley Druckenmiller who came up with the trade idea in the first place. Soros' contribution was agreeing with it and taking a large position.
Still, Soros deserves credit for having the boldness to make the trade. He also gets 'coolness' points for being the catalyst that ushered in a new currency regime for a major country. This level of impact from a single trade is matchless to this day.
5. Paul Tudor Jones' shorting of Black Monday
Paul Tudor Jones correctly predicted and profited handsomely from the Black Monday of 1987, the largest single-day U.S. stock market decline (by percentage) ever.
Jones reportedly tripled his money, making as much as $100 million on that trade as the Dow Jones Industrial Average plunged 22 percent.
In the weeks leading up to Black Monday, many traders were on edge about the market. Some also recognized the danger of portfolio insurance, which was partly responsible for the magnitude of the fall.
Consequently, many had short positions going into Black Monday or advised their clients to get out of the stock market shortly before it happened, so Jones wasn't unique in predicting the crash.
Nevertheless, Jones deserves to be #5 because Black Monday was such a momentous market event and he was the person who made the most money from it.
Here are the final 5:
http://www.ibtimes.com/articles/98377/20110106/greatest-trades-of-all-time.htm#
International Business Times Put Together their top ten
http://www.ibtimes.com/articles/98377/20110106/greatest-trades-of-all-time.htm#
1. John Paulson's bet against subprime mortgages
John Paulson is the famous hedge manager who correctly predicted the subprime mortgage crisis and profited enormously from it.
His trade made his hedge fund $15 billion in 2007 alone. It propelled him from relative obscurity to stardom and his hedge fund to become the third largest in the world.
Paulson does indeed deserve the title of having made the greatest trade ever.
First, he bet big on the largest economic event of the last 70 years and earned billions doing it.
Second, only a handful (less than 10, probably) of players on Wall Street profited enormously from this momentous event. Indeed, compared to other trades on the list, Paulson's prediction is one of the most exclusive.
Paulson isn't even a global macro trader (his background is in merger arbitrage) so it is highly puzzling but impressive that he came up with such an impeccable and spot-on analysis.
He should also be credited for being bold enough to believe in his analysis and ignore his oblivious Wall Street colleagues.
2. Jesse Livermore's call on the Crash of 1929
Jesse Livermore is a legendary speculator from early in the 20th century.
He is famous for correctly predicting both the 1907 and 1929 stock market crashes. The 1929 stock market crash and the subsequent Great Depression was the most significant U.S. economic event in the 20th century.
For his 1907 call, Livermore made $3 million, which is equivalent to almost $70 million today. After his 1929 trade, he was worth $100 million, which is equivalent to over $1.2 billion today.
Like Paulson, Livermore scores points for the high impact of the events he predicted and the amount of money he made.
Furthermore, he made his fortune without the benefit of having a hedge fund (i.e. massive amounts of money from investors) and using fancy derivative instruments.
One last point in Livermore's favor is that he became successful with less educational resources and mentors than modern speculators.
In fact, Livermore is considered a pioneer in the art of speculation and top traders still swear by the Reminiscences of a Stock Operator, a book based on his trading philosophy and career.
3. John Templeton's foray into Japan
Sir John Templeton, born in 1912, is a pioneer of the mutual fund industry and a legendary investor.
In the 1960s, when Japan was beginning its three-decade long economic miracle, Templeton was one of the country's first outside investors. At one point, he boldly put more than 60 percent of his fund in Japanese assets.
Before his brilliant call on Japan, Templeton also correctly assessed the economic impact of World War II, which was the second most important economic event of the 20th century.
In 1939, he put $100 each in 104 U.S. stocks that were trading below $1. In just 4 years, this portfolio quadrupled.
In addition to the fact that he predicted important events, Templeton gets points for being a true pioneer.
Back in the 1960s, people weren't really familiar with the concept of investing in Asia and Japan's export-driven model wasn't yet proven. It took someone of Templeton's ingenuity, courage, and foresight to lead the way.
4. George Soros' breaking of BOE
George Soros put the hedge fund industry on the map in 1992 after he broke the Bank of England (BOE) by shorting 10 billion worth of pound sterling and forcing the U.K. to withdraw from the European Exchange Rate Mechanism (ERM).
Soros made $1 billion in the process, which was an unimaginable sum back then.
Why isn't Soros, probably the most (in)famous trader in the world, and shorting the sterling pound, his most famous trade, ranked higher?
Not to belittle Soros' accomplishments, but the analysis behind it wasn't as difficult as some of the other trades on this list.
Indeed, there were copycats that made the same trade as Soros. Also, far more people recognized the unsustainability of the ERM than those that saw the dangers of the subprime mortgage market.
Moreover, it was Soros' partner Stanley Druckenmiller who came up with the trade idea in the first place. Soros' contribution was agreeing with it and taking a large position.
Still, Soros deserves credit for having the boldness to make the trade. He also gets 'coolness' points for being the catalyst that ushered in a new currency regime for a major country. This level of impact from a single trade is matchless to this day.
5. Paul Tudor Jones' shorting of Black Monday
Paul Tudor Jones correctly predicted and profited handsomely from the Black Monday of 1987, the largest single-day U.S. stock market decline (by percentage) ever.
Jones reportedly tripled his money, making as much as $100 million on that trade as the Dow Jones Industrial Average plunged 22 percent.
In the weeks leading up to Black Monday, many traders were on edge about the market. Some also recognized the danger of portfolio insurance, which was partly responsible for the magnitude of the fall.
Consequently, many had short positions going into Black Monday or advised their clients to get out of the stock market shortly before it happened, so Jones wasn't unique in predicting the crash.
Nevertheless, Jones deserves to be #5 because Black Monday was such a momentous market event and he was the person who made the most money from it.
Here are the final 5:
http://www.ibtimes.com/articles/98377/20110106/greatest-trades-of-all-time.htm#
