- Jesse Livermore, Father of Modern Short Selling
Trading Profit: About $100 million
Event: 1929 – Stock market crash
He is probably one of the first examples of a successful “short seller”. Already at the beginning of the last century, he was shorting stocks just before the earthquake in San Francisco. He makes $3 million for this deal.
Apparently having acquired a taste for this type of trading, he once again shorted the market crash in 1907. This made him about $100 million richer.
The year 1929 is what he is best known for. A stock market crash occurs just when it has shorted a very large volume. This is a great example of a smart, informed level of short trading. The day of the market crash in 1929 earned him $100 million.
- Paul Tudor Jones
Trading Profit: About $100 million
Event: Black Monday
The next logical step to short trading success is this person. In 1980, Jones founded Tudor Investment Corporation. In 1987, he shortened and captured Black Monday with great accuracy. This achievement earned him a huge financial reward – approximately 100 million dollars.
- Andrew Hall, “God of Petrol”
Profit made: about $100 million
Andrew Hall is perhaps best described as an investor who is on the long side.
Citigroup had an energy trading arm called Phibro.
Hall worked for Citi in the energy commodities trading division. In 2003, the price of oil was around $30 per barrel and he very accurately analyzed and caught the rise to $100 within five years.
- John Arnold
Trading profit: about $125 million
This is the perfect example of a trader spending some time scrutinizing market conditions before shorting a stock that would be affected by those conditions. Arnold, who worked for an energy hedge fund and a rival hedge fund, Amaranth, predicted that natural gas prices would rise as winter arrived in 2006. Arnold correctly predicted the natural gas price cycle, shorting on large volumes and making about 125 million dollars, and Amaranth capitulated from the position.
- George Soros, the man who ruined the Bank of England
Trading profit: About $1 billion
Event: Collapse of the British pound
The pound was backed by the European Exchange Rate Mechanism and this meant it was protected on a global scale. But Soros understands that the artificial status of the pound will crack sooner or later, as the BoE will have to give up interest rate hikes.
Soros goes short, and at first it brings him big losses, then he has to look for even a loan capital, continues to short and correctly predicts BoE capitulation. has earned about $1 billion.
- David Tepper, the man who bet against the financial crisis
Trading profit: about $4 billion
Event: 2009 financial crisis
In 2009, the financial crisis engulfed most economies and governments tend to nationalize banks and other financial institutions when the going gets really tough, and the US was ready to do that. At that time Tepper bought very large amounts of bank stock and later that year their stock skyrocketed. This makes Tepper about $4 billion richer.
- John Paulson
Profit: About $4 billion
Event: Subprime market
Paulson is perhaps one of the most knowledgeable investors in the subprime mortgage market. Long before the 2009 crisis began. he is absolutely convinced of what is coming, he goes through many of the big investment banks and
persuades them to write credit default swaps against the subprime market. Initially, this instrument is extremely illiquid and the banks even refuse it, but in the end it succeeds and buys the derivative at a very low price. The hedge fund made about $4 billion from the market crash.
Dealer Radoslav Valov
Varchev Absolute Trader
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