Jesse Livermore’s first significant trade was shorting stocks just before the San Francisco earthquake, which made him 250,000 dollars. Then he made three million dollars shorting wheat in 1925. He also generated a big amount of money when he shorted the entire market during the 1929 crash and a little short of $100 million. However, he ended his life with suicide when he lost everything in 1940.
Jesse Livermore is among the most successful stock traders in history. He was always interested in the financial markets and spent a lot of time trying to comprehend them. At a very early age, he found out he could forecast the changes of stocks according to previous prices. In 1892, he made a 3.12 dollar payout on his first trade in Burlington stock. At age 15 Jesse accumulated his first one thousand dollars by trading stocks and commodities in the bucket shops. Then he continued his trading in the New York stock market through legitimate stockbrokers.
Though, Livermore’s trading was not always successful. At the age of 22, he lost all of his funds because of the slow execution of his trades. In 1939, he wrote a book called “How to trade in stocks”, which was dedicated to the people who just took their first steps into the stock market.
Paul Tudor Jones
Paul Tudor Jones is one of the most famous investors in history. His success made him a multi-billionaire. As of 2021 Forbes estimates that Jones was worth a whopping 5.8 billion dollars and in 2020 he was the 320th richest man in the whole world. As of 2022, Paul's estimated net worth is about 7.5 Billion Dollars.
Once he had gained enough knowledge in trading cotton futures in the New York stock market, Jones decided that he could start his own business. It is important to note that Paul Tudor Jones predicted the 1987 market crash, which became known as black Monday. Due to the successful market crash forecast, Jones avoided losing a lot of money and managed to generate a substantial payout instead.
The legendary stock trader, Paul Tudor Jones, developed his own trading strategy in his career that helped him to reach great success in trading. His main goal is to always stay consistent. He has a high quality of risk-management skills. Besides, he set very realistic expectations on his potential trades, which enabled him to have a strong and stable trading performance.
Paul Tudor Jones believed that investing in the stock market is not about getting rich fast. This is how Paul Tudor Jones managed to become successful in this industry and among millionaire stock traders who reached the highest points in the stock market. Consistency in the market gets rewarded by investors generously. Traders that can limit their risks and are consistent have a shot at gathering funds and managing other people's money. Paul has managed to do that brilliantly.
Warren Buffett is one of the most influential people in the history of trading and investing. The major factors that affected the success of Warren Buffett are discipline, perseverance, and effective execution. The net worth of Warren Buffett is 74 billion dollars according to 2021 metrics. Let’s look at the highlights of his history of success.
Between 1950 and 1956 Warren built his personal capital up to 140,000 dollars from a mere 9,800 dollars. In 1950, he was managing 300,000 dollars in capital. Even though it is not a significant amount of capital, his future plans would soon change that. At the time, he had a successfully growing business. In the next five years, Buffett’s partnerships saw a 251% gain, thus cementing his place in the stock market for the years to come. By 1962 the partnership had capital in excess of 7.2 billion dollars. He also had more than 90 limited partners across the United States. Buffett then increased the minimum investment to 100,000 dollars. Ten years later, the Buffet partnerships assets were up more than 115% compared to Dow’s 122%. At that time, Warren Buffett already managed to generate over 44 billion dollars.
Warren Buffett is known for long term investing. His investment philosophy is to find great companies that have brilliant management team and to buy their stocks. According to Buffett, it's better to invest in a great company that is fairly valued than to invest in an average company that have low value stocks in the market.
Steven Cohen is considered to be one of the best traders on Wall Street over the last thirty years. He has made over thirteen billion dollars. Cohen separates himself from most investors by buying options. Once he decides to buy options, he has a very specific technique to choose the right one. Steven Cohen picks options when they offer him a mathematical edge.
According to Forbes, as of December 2022, his net worth is 16 billion dollars.
In 1992, he founded the hedge fund, SAC Capital Advisors. By 2006, the company’s trading equaled 2% of the whole stock market activity. After that, the firm had increased a great deal and by 2013, the average annual gain for SAC reached 25%.
Steven Cohen’s journey to success was not full of victories. He's experienced several losses in his career, however, the major thing that affected his success probably was his unique trading strategy. He was a high-risk and high-reward trader who believed that winning big is better than winning often.
Even though there have been numerous troubles and problems on his trading path, he is considered to be one of the richest stock traders in the world.
Common traits of the best traders in the world
As you can see, there are various types of traders. Some are focused on long term investing like Warren Buffett, while others seek to find short term investment opportunities. Some focus on consistency more, while others are focussed on large wins. What this tells us is that there are many ways to make money in the market. Despite so many differences, all the best and famous stock traders have many things in common. They are managing large amounts of money. To make big money, you need to be able to manage millions. And it's more challenging to manage a 10 million dollar portfolio than it is to manage 10k. They all are highly disciplined and hard-working. Successful traders view the capital under their management in terms of percentage points and not in terms of sheer numbers. Which is an important skill to develop if you are planning to manage large investment capital.