Trading is a profession that fascinates, as do the extraordinary individuals that have helped shape its history. The top ranking traders in the world continue to inspire new generations as they enter into finance. Like elite sportsmen and women who reach the top of their game, they are role models that continue to inspire others. The top level traders that made their mark in the financial sector continue to serve as examples today, and are part of the legend. These men took risks and took advantage of the economic situation of their time. They went to places that no one else dared to go. Their journeys are a testament to their success. Read on to find out more about the profiles and background of theses pioneers whose names are still talked about today.
Warren Buffet and the “snowball effect”
Warren Buffet has had an extraordinary life. He is considered by many to be the greatest investor of the century. The father of this outstanding trader was a member of Congress and a stock market trader. Buffet was therefore born into the world of finance and took an interest in it from a very young age. Renowned as being one of the world’s best traders, he started with just $100 in his pocket. He was extremely talented, and began by investing the money of a few family members and friends. His performance was exceptional, achieving up to +30%. Warren Buffet’s track record and excellent results convinced other investors to put their trust in him. This led him to create and set up the Berkshire Hathaway fund (an investment fund worth several hundred billion dollars). Its strategy is simple and unique.
He is a visionary with a strong sense of foresight. He always invests in companies that he considers to be undervalued but that have great potential for the long term. He also only invests in companies for which he has a thorough understanding of the business fundamentals. He suffered big losses in 1974, 1987 and 2009 (with the subprime mortgage crisis). However, his highly astute and visionary investments have paid off handsomely over time. Warren Buffet shows us a perfect example of the “snowball effect”. He started from nothing and is now estimated to be worth tens of billions of dollars. A hugely inspiring example!
George Soros, “the man who blew up the Bank of England”.
According to Forbes magazine, George Soros is one of the wealthiest people in the world. He is perceived as a ruthless and fearsome investor and has been trying for some time to shake off this reputation that has been attributed to him. He has been developing philanthropic activities for several years. George Soros remains, nonetheless, one of the most successful traders in the world today. After his success on Wall Street, George Soros founded his own investment fund, The Soros Fund Management. The speciality of this fund is speculation.
In the early 90s, the UK was in the midst of a recession. George Soros bet £10 billion on the collapse of the British currency. Due to the restrictive monetary policy of the Bundesbank, the Bank of England was unable to support the pound. It therefore abandoned the fixed exchange rate system. This decision caused the pound to fall by 15% against the Deutschmark and by 25% against the dollar. It was a good move for George Soros who, thanks to his natural flair and speculation-based system, made £1 billion in a single day and took in a total of $1.8 billion on the whole deal. He has since been dubbed ‘the man who broke the Bank of England’. He originally wanted to be a philosopher or writer like his father! Clearly fate had other plans for this talented trader.
John Paulson, known as the man who foresaw the subprime crisis
John Paulson is the founder and chairman of the New York-based hedge fund, Paulson and Co. He is renowned for his foresight in anticipating and profiting from the subprime crisis. Based on what was happening with real estate at the time, he speculated as early as 2005, on the collapse of subprime mortgages. His risk-taking paid off, as at the end of 2007, John Paulson made the biggest profit in the history of financial transactions. He made no less than $4 billion by betting on the collapse of US mortgage loans. Referred to as “the best trader worldwide” by Trader Monthly magazine in 2008, his success did not end there.
A few years later, in 2010, gold prices fell dramatically. John Paulson saw an investment opportunity. He invested, and once again, the risk-taking paid off. Shortly afterwards, gold prices soared. The man dubbed “the sultan of subprime mortgages” ultimately made a profit of 5 billion dollars at this time.
Still in business today, John Paulson now heads several investment funds. He invests mainly in agriculture and gold. Earlier this year, however, he announced that he was considering a possible early retirement. John Paulson will make the decision in the next two years as to whether he closes his fund and transforms it into a family investment company or not. John Paulson is perhaps anticipating this scenario because he has been underperforming in recent years. In 2011, he managed $38 billion. Today, he manages just $9 billion. Clients have indeed been fleeing as a result of his recent poor performance.
The 3 top traders worldwide summed up
The top three traders we have highlighted here, considered by many to be among the best traders worldwide, all have their own stories and backgrounds as you will have noted. Their success is largely due to their expert knowledge of the financial markets, their analytical abilities and their willingness to take risks. They are visionaries who have successfully exploited the strengths and weaknesses of the markets. These traders have gone to places that no others dared to go. They put aside their fears and seized opportunities where no one else saw them. Ultimately, this is most probably what led to their success.
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