Finance Trends Letter

Lessons on Being Wrong... and Profiting Anyway While revisiting the 1996 documentary Triumph of the Nerds this week, I came upon this fantastic segment on Apple co-founder, Steve Jobs. Finding it eminently quotable (and useful), I just had to share his thoughts from this special clip here. "I don't really care about being right. I just care about success." - Steve Jobs While Jobs was an entrepreneur in the emerging computer industry, and not an outright share investor or speculator, his quote about the relative unimportance of being right hit me right in the trader's gut. Here is a game changing company founder saying, "you know what... I don't need to have the best forecasts or even the most original insights and innovations (hence the looting of Xerox's PARC). I don't need to always be right. I just want to ship the best products and win. That is what will ultimately make Apple the most successful company in our industry....

Welcome to our new readers across the globe. Be sure to check out our popular posts section, filled with market insights and valuable lessons for traders and investors of all levels! Great starting point for new readers and traders: a selection of our most Popular Posts on Finance Trends . Paul Tudor Jones, photo by Annie Leibovitz via Audobon.org. You'll find a newly expanded list of some of our favorite posts, with insights into emerging market trends. Plus, lessons on trading and investing from the masters: Market Wizards such as Paul Tudor Jones, Jesse Livermore, William O'Neil, Victor Sperandeo, Charlie Munger, and Sir John Templeton offer up their hard-earned wisdom.  Equally as important, I hope you'll use our favorite posts to learn from the trading insights offered up by myself and some of the lesser-known (but no less experienced) trading practitioners quoted within.  I have spent years and countless hours researching stocks, scanning charts, speakin...

Valeant Pharmaceuticals ( VRX ) is now big headline news, as the stock's downward slide continues to punish investors, big and small.  Hedge fund manager, Bill Ackman of Pershing Square was reported to have lost $1 billion in a single day due to VRX 's latest plunge. Institutional ownership of Valeant's stock was very widespread. As mentioned in our last post, a huge number of hedge funds and mutual funds owned big positions in VRX . Smaller investors may also be feeling the hit in their personal investment accounts or in their pension funds' returns.    Let's not focus too much on the investors who were unfortunate enough to get burned in this stock crash. The media and the investing world are already having a field day with this debacle. Instead, let's take a fresh look at the chart to better understand why so many savvy investors were hurt in this decline. As you can see in this updated daily chart (click to enlarge), VRX had been showing signs of d...

Hello, gang. Long time, no update (here on the blog). Today we have some great weekend videos for you that bridge the trading past with the present. I think you'll enjoy them. Longtime readers and followers of Finance Trends may recall our posting the Paul Tudor Jones Trader documentary way back in the early days of this bull market.  We're bringing it back today with a new video link and adding some new commentary on hedge funds and trading from Jones' old partner, Peter Borish, who was recently interviewed on Bloomberg TV. So without further ado, let's jump right in. Watch: Paul Tudor Jones Trader (1987).  Yes, this video now serves as a time capsule of 1980s Wall Street, its trading floors, lingo, fashions, and pre-web technology. However, it's also a wonderful snapshot of the nascent hedge fund industry and the breakout year for one its biggest stars, Paul Tudor Jones. One of the best quotes from the film, Paul Tudor Jones on risk management i...

SAC Capital chief, Steve Cohen opens up to fellow hedge fund legend Paul Tudor Jones in an ISI conference chat that was closed to the media, but reported on by Dealbook. Here's the 411 from Dealbook: " The founder of SAC Capital Advisers, the $12 billion hedge fund in Stamford, Conn., sat for a rare wide-ranging interview with Paul Tudor Jones, another hedge fund manager, where he discussed his favorite stocks and a whole lot more. The interview was part of a two-day conference at the Waldorf Astoria hotel in Midtown Manhattan sponsored by ISI, the Wall Street research firm... Other than complaining about his bad back, Mr. Cohen is said to have appeared at ease during the hourlong conversation before a packed crowd. Mr. Jones, who joked that he was playing the role of Charlie Rose , pressed Mr. Cohen on a variety of topics but did not — no surprise — ask questions about the government’s insider trading charges against two of his former traders. Mr. Cohen talked abou...

A few weeks ago on Twitter, we shared this interview with Sebastian Mallaby , who speaks to UC Berkeley about the future of the hedge fund industry for their "Conversations with History" series. For those who may not know, Mallaby is the author of a recent book on hedge funds and the financial crisis called, More Money Than G-d: Hedge Funds and the Making of a New Elite .  One point that really caught my interest early on in the interview is an anecdote Mallaby shares regarding Paul Tudor Jones and the factors he attributed to his own success as a trader and hedge fund manager. As Mallaby tells it, PTJ's explanation for his success is not at all the real reason why he is successful, but it is part of a common theme of professionals misattributing causes to explain their colleagues' and their own successes. Enjoy the discussion; it should prove especially interesting to those who are in the business or watching the hedge fund space closely. Related articles and pos...

There's a lot of truth to this scene from Trainspotting , in which Sick Boy explains his unifying theory of life to his friend, Mark . It's a very universal phenomenon: you get a bit of success (or maybe a lot of it) and then, as you get older and more comfortable, you tend to become complacent and less aware. Maybe you don't push the envelope as much as you did before, or maybe you just get to a point where you're more easily satisfied and content to rest on your laurels. It doesn't have to be an age-specific thing either, it may just be a lack of enthusiasm or vitality. That old hunger you once felt is nearly gone. Be cognizant of this reality and its tendency to creep up on your life. Don't become complacent . Or as Paul Tudor Jones once said: "Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead." Capisce? Related articles and posts : 1. Lessons...

During last week's MacroTwits discussion on StockTwits TV, Eric Jackson of Ironfire Capital posed a very worthwhile question to the group: who are the top global macro traders & investors of the day and what can we learn from them? For those who may not know, global macro is a term used to describe a largely "top-down" approach to speculating and investing across multiple asset classes and locales. Macro traders and hedge funds often take a big picture view of emerging trends and geopolitical events and express their positions accordingly by speculating in any number of markets, be they debt, futures, currencies, or international shares. The names of some now-legendary macro traders are probably familiar to most investors: George Soros, Jim Rogers , Stanley Druckenmiller , Louis Bacon, Paul Tudor Jones . But who are the rising stars and top practitioners of this investing style today? That's a question we're going to examine a bit further in the weeks ahead....

Watch legendary hedge fund manager Paul Tudor Jones at work in the 1987 documentary, Trader . See especially PTJ's comments on the importance of focusing on risk management in trading and investing (near the 33 minute mark):  "Where you want to be is always in control, never wishing, always trading. And always, first and foremost, protecting your ass. ...That's why most people lose money as traders or as individual investors because they're not focused on the money they have at risk . If everyone spent 90% of their time on that instead of on how much money they're going to make, they'd be incredibly successful as investors."  Classic stuff. Related articles and posts: 1. Paul Tudor Jones and Peter Borish on trading - Finance Trends. 2.  Paul Tudor Jones on trading macro - Finance Trends . 3. Sebastian Mallaby interview: future of hedge funds - Finance Trends .

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 ed...