Most stock traders never hit the headlines, but there are a few that are legends. This is the first of a two-part series that looks at some of the most memorable traders of all time.
This is the man who broke the Bank of England. He suspected that if he shorted the pound using high leverage, he could drive the UK out of the European Exchange Mechanism back in 1992. He won his bet, and made $1 billion literally overnight. As of the beginning of 2015, Soros has retired – although he’s had a go at doing this a number of times before. Prior to that, he was the chairman of Soros Fund Management. The man is worth $19.2 billion, making him #30 on the global rich list.
Simons is less well-known than Soros, but he’s still worth $11.7 billion. He’s the founder of Renaissance Technologies Corporation, and has investments totaling over $41 billion. He was originally a mathematician, but parlayed his knowledge up into a fortune. Simons puts his success down to common sense, but also points out that good luck is the single biggest factor in why he made so much money.
Everyone’s heard of J.P. Morgan, as in the bank. However, Morgan was a real person who made a fortune on the stock markets. While he wasn’t a Rockefeller, he still ended up being worth nearly 67 million when he died in 1913 – that’s nearly $1.4 billion in today’s money. Among his accomplishments, he set up the merger that led to the creation of General Electric.
Known as an “activist investor”, Icahn is known for taking large positions in corporations and forcing them to do things that unlock shareholder value – even when they don’t want to. He founded Icahn Capital Management, and is now worth $20 billion. While Icahn is seen by many as a corporate raider, he’s also got a strong charitable streak in him – for example, he has set up a large number of shelters for homeless people.
Although Einhorn is relatively poor compared to stars like Soros and Icahn, he’s still managed to accumulate $1.25 billion even though he’s only in his mid-40s. He’s the founder of Greenlight Capital, which he started back in 1986 with just under $1 million. Since then, he’s managed to generate 20% annual returns for his investors, making a fortune for himself at the same time. Among his bigger coups, he managed to short Lehman Brothers back in 2007, suspecting that they were heavily exposed to the subprime mortgage market. He was right – Lehman Brothers declared bankruptcy in September 2008.
Rounding out our first installment of superstar stock traders is John Paulson – the founder of Paulson & Co. Paulson is worth over $11 billion, and controls nearly $18 billion in investments. Like Einhorn, he made his name – and vastly increased his fortune – in 2007, when he used credit default swaps to bet against the US subprime mortgage market. According to some estimates, Paulson made nearly $4 billion personally by doing this.