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Paul Tudor Jones on trading macro

Here's something that's been making the rounds on Twitter lately - a 2008 Institutional Investor magazine interview with hedge fund Hall of Famer, Paul Tudor Jones.

For those who don't know, Jones has enjoyed an extremely successful career as a commodity trader and hedge fund manager. He is known for an employing a global "macro" style for much of his investing, taking positions in a variety of markets (commodities, equities, currencies, derivatives) as a means of expressing market bets on big-picture speculative themes.


Here's an excerpt from his II mag profile interview:

"What’s so special about macro hedge fund managers?

I love trading macro. If trading is like chess, then macro is like three-dimensional chess. It is just hard to find a great macro trader. When trading macro, you never have a complete information set or information edge the way analysts can have when trading individual securities. It’s a hell of a lot easier to get an information edge on one stock than it is on the S&P 500.

When it comes to trading macro, you cannot rely solely on fundamentals; you have to be a tape reader, which is something of a lost art form. The inability to read a tape and spot trends is also why so many in the relative-value space who rely solely on fundamentals have been annihilated in the past decade. Markets have consistently experienced “100-year events” every five years.

While I spend a significant amount of my time on analytics and collecting fundamental information, at the end of the day, I am a slave to the tape and proud of it".

And for those who'd like to read more in this vein, see II's interview with Louis Bacon, of Moore Capital, as well. You'll note the Bacon-Jones connection right from the opening paragraphs. Enjoy.

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