Yeh, and the reason why they did well from their trading is because they were capable enough to build a business around it. Big difference.
Trading very big money
- Thread starter marsman
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Yeh, and the reason why they did well from their trading is because they were capable enough to build a business around it. Big difference.
This is just a matter of semantics.
Soros was a trader in the very beginning of his 'career' (he was an 'arbitrage trader' for a brokerage firm in NY.) but it is much more accurate to describe him as a hedge fund manager. He uses his knowledge of economics, market Psychology etc. to make 'investments' in what he thinks is going to go up and short what he thinks is going to go down.
Is that what we mean by 'trading'??
e.g. Soros shorted Deutsche bank the day after the Brexit vote.
http://www.bloomberg.com/news/artic...ed-deutsche-bank-would-drop-in-brexit-turmoil
Are such hedge fund managers 'traders'?
Soros was a trader in the very beginning of his 'career' (he was an 'arbitrage trader' for a brokerage firm in NY.) but it is much more accurate to describe him as a hedge fund manager. He uses his knowledge of economics, market Psychology etc. to make 'investments' in what he thinks is going to go up and short what he thinks is going to go down.
Is that what we mean by 'trading'??
e.g. Soros shorted Deutsche bank the day after the Brexit vote.
http://www.bloomberg.com/news/artic...ed-deutsche-bank-would-drop-in-brexit-turmoil
Are such hedge fund managers 'traders'?
The point is to emphasize that the reason why these gentlemen are billionaires is because they are top businessmen who also have a top product (their trading ability, and their team's ability to raise and maintain capital). You don't see one-man traders sitting in their two-person corner office with an assistant nearby, in the Forbes list. Making big money is not only about trading, it's about building a sustainable business around it. In fact, some would argue that the latter is the more useful.
But the sustainability of their business is their trading success. Many of them now run family offices with just their own money generating 20% per annum on billions of $s. Paul Tudor Jones generated 5 consecutive years with 100% returns. John Arnold had a 500% year and multiple 100% years. These guys are excellent traders and don't need businesses to generate income. Give them $10,000 and they could make millions in a few years.
Most of the hedgefunds that produced massive returns did it in a different environment where lack of capital, lack of access, and technological limitations allowed for massive edge.
Listen to this board. Most of the strategies people talk about here are the same strategies that these hedgefund managers ran. And if retail is talking about those strategies then you know every insititutional investor has already implemented them. Those returns are extremely difficult now even for the best investors/trader. The markets have gotten more efficient in the last 20-30 years.
My space: Equity Derivatives was one of the most profitable businesses for a bank in the mid-late 90s. With the advent of electronic trading, the edge has greatly diminished.
Dong quite well from a big trading bet or so is not how they stay rich, I do not know any of those other guy's stories bet i bet you they went from being as pure trader to managing a fund or running an investment company, i.e. running a business. You can turn money into millions but to stay wealthy you need to become a business owner to last. Even starting an investment company generates fees and revenues whether you have a good trading year or not.