Over the past century, an elite group of traders have achieved legendary status. With exceptional skill, discipline, and timing, these market maestros have left an indelible mark on the financial world. Here are my picks for the greatest traders of all time:
George Soros (1930-present)
George Soros is a Hungarian-American billionaire investor, philanthropist, and political activist. Born in 1930, he survived Nazi-occupied Hungary before emigrating to England, where he studied philosophy at the London School of Economics (LSE). He later became a successful hedge fund manager, famously making enormous profits from currency speculation.
- Nickname: The man who broke the Bank of England.
- Best Known For: On September 16, 1992, known as Black Wednesday, the British government was forced to withdraw the pound sterling from the European Exchange Rate Mechanism (ERM). Soros bet heavily against the British pound, profiting over $1 billion.
- Legacy: The Quantum Fund, co-founded by George Soros in 1973, became one of the most successful hedge funds in history. He is also known for his philanthropy and political activism.
- Strategy: Soros has focused on global macroeconomic trends, profiting from currency movements, commodity fluctuations, and geopolitical events.
- Quote: “The financial markets generally are unpredictable. So that one has to have different scenarios… The idea that you can actually predict what’s going to happen contradicts my way of looking at the market.”
Jesse Livermore (1877-1940)
Jesse Livermore is a trading legend. His ability to read market sentiment, psychology and price action earned him massive success, but his life was marked by dramatic ups and downs including bankruptcy. He began as a teenager in bucket shops, informal betting establishments that allowed people to speculate on stock prices without actually purchasing shares. From there he honed his skills on timing, risk management, and market behavior, which he later applied to his remarkable career on Wall Street.
- Nickname: The Boy Plunger.
- Best Known For: His most famous triumphs include correctly predicting and shorting the market during the Panic of 1907 and the Wall Street Crash of 1929, when he reportedly made $100 million.
- Legacy: Edwin Lefevre’s book Reminiscences of a Stock Operator is a fictitious account of Jesse Livermore’s life and career, based on a series of interviews by Richard D. Wyckoff. It remains one of the most treasured books on trading.
- Strategy: Jesse Livermore’s approach to trading combined trend following, pivotal points, patience, and a contrarian outlook.
- Quote: “What has happened in the past will happen again. This is because markets are driven by humans, and human nature never changes.”
Paul Tudor Jones (1954-present)
Paul Tudor Jones is an American investor, hedge fund manager, and founder of Tudor Investment Corporation. He started his career at the New York Cotton Exchange and spent four years as a commodities broker at E. F. Hutton & Co before launching Tudor Investment in 1980. He is also a philanthropist and founded the Robin Hood Foundation, which is New York City’s largest poverty-fighting organization.
- Best Known For: Correctly predicting and profiting from the October 19th 1987 stock market crash. He made about $100 million taking large short positions right before the crash, known as Black Monday.
- Legacy: A leading player in the hedge fund industry, Tudor Investment Corporation has managed billions of dollars over decades, consistently delivering strong returns.
- Strategy: Jones uses a Global Macro Trading strategy focusing on identifying macroeconomic trends such as interest rates, currency movements, and geopolitical events. He also uses technical analysis to identify price patterns and trends.
- Quote: “I believe the very best money is made at the market turns.”
Warren Buffett (1930-present)
One of the most successful investors of all time, Buffett began his career in finance in the early 1950s after studying under Benjamin Graham at Columbia Business School. Buffett’s value investing approach focuses on identifying undervalued companies with strong fundamentals. In 1965, he purchased Berkshire Hathaway, a struggling textile company, and transformed built it into a major conglomerate.
- Nickname: The Oracle of Omaha.
- Best Known For: Through his company, Berkshire Hathaway he made highly successful investments by taking large positions in companies like Coca-Cola, Apple, and American Express.
- Legacy: Buffett is famous for his modest lifestyle, despite being one of the wealthiest people in the world. He has pledged to donate over 99% of his wealth to charitable causes, primarily through the Bill & Melinda Gates Foundation.
- Strategy: Buffett looks for companies that are undervalued by the market but have strong fundamentals, such as solid earnings, good management, and competitive advantages. He favors a long time horizon, quality rather than quantity of investments, patience, and the avoidence of debt.
- Quote: “The stock market is designed to transfer money from the active to the patient.”
Ray Dalio (1949-present)
After graduating from Harvard Business School, Dalio worked as a futures trader and broker before launching Bridgewater Associates in 1975 from his New York apartment. Bridgewater has grown to be the world’s largest hedge fund with assets under management (AUM) of over $125 billion. The firm has a unique corporate culture, characterized by radical transparency and meritocracy.
- Best Known For: The All Weather” portfolio and his principles-based management style,
- Legacy: Over the decades, Bridgewater has maintained a reputation for delivering strong risk-adjusted returns. Dalio is known for his principles-based approach to decision-making, which is outlined in his book Principles.
- Strategy: Bridgewater pioneered the “risk parity” investment strategy which aims to create a portfolio that performs well across various economic environments.
- Quote: “To make money in the markets, you have to think independently and be humble.”
Jim Simons
Simons worked as a codebreaker for the National Security Agency (NSA) and taught mathematics at MIT and Harvard before founding Renaissance Technologies in 1982. He applied his mathematical expertise to the financial markets, building Renaissance into one of the world’s most successful hedge funds. The firm’s flagship Medallion Fund has one of the best track records in history, generating annualized returns greater than 60% over 33 years.
- Nickname: Quant King.
- Best Known For: Founding Renaissance Technologies and pioneering the use of mathematical models and algorithms in finance.
- Legacy: The Medallion Fund set a benchmark for consistently high returns driven by sophisticated algorithms.
- Quote: “We have three criteria: If it’s publicly traded, liquid and amenable to modelling, we trade it.”
Richard Dennis
Like George Soros, Dennis studied philosophy at University. He started his career in finance at the age of 17, as a runner on the floor of the Chicago Mercantile Exchange (CME). He went on to be a successful floor trader at the MidAm and Chicago Board of Trade. In the early 1980s, he co-founded the firm C&D Commodities with his partner, William Eckhardt.
- Nickname: Prince of the Pit.
- Best Known For: The Turtle Traders experiment, where he proved that anyone could be trained to trade successfully.
- Legacy: Dennis’s systematic approach, trend-following strategies, and strict risk management principles have inspired generations of traders.
- Quote: “When things aren’t going right, don’t push, don’t press.”
The Bottom Line
The appraoch of of these market wizards varies widely, from Warren Buffett’s value investing to traders like Paul Tudor Jones and Jesse Livermore, who paid attention to market cycles. While the markets have changed substantially, studying the lives and strategies of these exceptional traders provides a great deal of ideas and inspiration.