CNBC just did rundown of top traders...

Discussion in 'Trading' started by Algorithm, Mar 27, 2006.

  1. Good ole Boone Pickins was number one on the list Made over 1.5B last year and his fund was up over 700% in '05. He rode the energy wave.

    Goldman had two traders at number 2 and 3 on the list I believe. Not surprising since Goldman smashed their earnings numbers a for the last quarter and trading was the main reason. Pretty interesting.

    Just thought it would be of intrest.
  2. Who are the others on the list?

    Is there an online transcript?
  3. Goldman traders..thats funny. Unlimited access to info and capital probably gives a bit of an advantage.
  4. List was compiled by Trader Monthly. Available on their site.
  5. Thanks, Algorithm!
  6. SAC capital advisors was #2. They're a total hedge fund. Pickens also runs his own hedge fund. Of course what they do is trading. They all have fully staffed trading floors as well as analysts.

    That is the reality folks. These are the people behind the funds and houses that are moving the markets. No matter how hard you try you can't discount their accomplishments and trading abilities. Of course they have access to enormous amounts of capital and power, that's what it's all about.

    Just watch the latest 60 minutes episode to see how SAC does it. This morning someone on CNBC threw out there that something like 25-50% of the daily trading volume is done by hedge funds alone. I think the first thing that makes any good trader or business person for that matter is coming to grips with the reality of the business landscape they do business in. Before you get into the water, you'd better be sure you know what lurks below. There's a reason that only a small percentage of retail investors make it in this game.
  7. "retail investors?"

    you mean retail traders

    most retail investors do fine

    generally speaking, they dollar cost average into mutual funds, and a few play stocks on the side

    retail traders are another story entirely.

    most lose money
  8. range


    Thanks for the heads-up, Algo.

    Here is first part of the article for those who do not have a sign-in:

    Trader Monthly 100: The Top 10

    The highest-earning traders of 2005.
    By: Rich Blake , A.D. Barber , Robert LaFranco
    Issue: April/May 2006 , Page 69
    The Top 10
    The Top Hedge-Fund Traders
    The Top Wall Street Traders
    The Best of the Rest
    The Top Up-and-Comers


    RANK: 1
    T. Boone Pickens

    CITY: Dallas
    FIRM: BP Capital
    AGE: 77

    "Long crude" doesn't even begin to describe T. Boone Pickens's position. With $5 billion and growing in assets under management, his fund company, BP Capital, is throwing off a small national economy via an unshakable bet that the world's oil supply can't keep up with rising demand.

    "Yes, my own money is in there," Pickens told Trader Monthly in January, describing his operation. "That always impresses the other investors."

    And what's not to be impressed with? Returns on Pickens's main commodities pool were over 700 percent in 2005. His smaller equity fund was up more than 100 percent. While Pickens may not be heavily involved in trading on a day-to-day basis (the funds overall actually trade very little), his market view -- and oft-televised table thumping -- is what has driven BP's long-term strategy since oil was $20 a barrel.

    When he's not out hyping the possibility of triple-digit crude prices or helping sink Democratic presidential hopefuls, Pickens donates money to pet rescue. Recently, he caught some flak when, as part of a tax loophole, he gave $165 million to Oklahoma State and the money ended up in his hedge fund. It's not a bad place to park a pile of dough, of course: Triple-digit returns off a 10-digit asset base that includes an oversized dose of his own money translates into what Trader Monthly believes is the largest one-year sum ever earned (in contrast to a Bill Gates–style appreciation in net worth), larger even than Michael Milken's legendary $550 million haul of 1986, adjusted for inflation.


    RANK: 2
    Stevie Cohen

    CITY: Stamford, Connecticut
    FIRM: SAC Capital Advisors
    AGE: 49

    The man is called "Stevie," as if he were everybody's favorite soul singer or the neighborhood paperboy, yet he could very well be the richest trader who ever laid down a position. Either way, Cohen is certainly among the most admired living financial figures, second only perhaps to Alan Greenspan (who might end up working for Cohen, at the rate Cohen gobbles up market studs). Says one former SAC staffer: "Stevie has the most clout on the Street, the best contacts, an army of analysts and unlimited capital." A graduate of the University of Pennsylvania's Wharton School who got started in the late 1970s as a proprietary trader at Gruntal & Co., Cohen launched SAC in 1992 with $20 million. He has since amassed more than $7 billion that he personally runs -- not to mention 500 or so traders, analysts and support staff, creating an asset-management empire that spans two management companies (SAC Capital Advisors and SAC Capital Management), three main funds (SAC Capital Associates, SAC Capital International and SAC Global Diversified), two separate offices in Stamford and additional outposts in Manhattan, London and San Francisco. When Cohen comes upon a trader with exceptional skills, he'll seed him in-house -- or help put him in business on his own.

    The SAC family had another impressive year in 2005 -- performance, for the most part, was 20 percent–plus, as it has been, amazingly, just about every year since Cohen began. With his incentive fee of up to 50 percent of total profits (though his newest fund, the SAC Multi-Strategy, is said to be 3-and-35, and we hear the rest of his vehicles going forward will follow suit), perhaps only a federal mint prints more money year in, year out than Cohen. Had it not been for an anomalous rough patch this past October (his only down month), his epic compensation amount might have been even greater. We figure the SAC empire took in revenues of at least $3 billion last year -- and if Cohen, conservatively, took one-third...


    RANK: 3
    James Simons

    CITY: East Setauket, New York
    FIRM: Renaissance Technologies Corp.
    AGE: 67

    Jim Simons is a Euclid for our times: He has a Ph.D. in math from Berkeley, has won the prestigious Veblen Prize in geometry, taught at MIT and founded Math for America. Well, here are some numbers: $6 billion, as in Simon's assets under management at year end. Or how about 5-and-44, his notoriously stiff fee arrangement? Then, of course, there's $100 billion, the lofty target Simons has set for a net-long vehicle his firm recently started. Finally, there's the 28 percent return produced by his Medallion fund, which employs scientific models to predict price movements in commodities, currencies and equities.

    "Certain price patterns are non-random," the former code-breaker cryptically told The New York Times in a rare interview last November. He could be on to something: After all, Medallion has averaged more than 30 percent, net of fees, every year over the past decade and a half -- or three times as much as the S&P 500 index over the same period.

    Simons's hundreds of millions of dollars in charitable donations support everything from autism research to augmenting inner-city math teachers' salaries to atom-smashing Big Bang replication experiments at the Brookhaven National Lab.


    RANK: 4
    Paul Tudor Jones

    CITY: Greenwich, Connecticut
    FIRM: Tudor Investment Corp.
    AGE: 51

    As the long, hot summer of 2005 wore on, the flagship fund that anchors Paul Tudor Jones's roughly $14 billion hedge-fund empire was hardly sizzling. Reports were surfacing that like a lot of funds, it had suffered losses in May and -- gasp! -- was actually down 2 percent at mid-year. But never bet against a master. Jones staged a comeback, all right: His flagship fund (with assets of $2 billion) finished the year up roughly 14 percent, an improvement over the 12 percent return registered a year earlier.

    Much of this commodities superstar's personal earnings have been plowed back into his funds over the years; thus it's astounding to speculate what he might actually be taking home. We attempted to err on the conservative side, because Jones has a reputation for paying his people extremely well. But, based on what we believe is at least a sizable personal stake, Jones's 2005 take had to be among his most enormous yet -- which is why he was able to do such things as back Harvey and Bob Weinstein's new media group, swap thousands of acres of pristine Colorado land with the federal government and help bankroll construction of a new 15,000-seat arena for the University of Virginia, his alma mater. It'll be called John Paul Jones Arena -- named after Jones's father, by the way, not the Revolutionary War naval hero.

  9. range



    RANK: 5 (TIED)
    Stephen Feinberg

    CITY: New York
    FIRM: Cerberus Capital Management
    AGE: 46

    Known as the king of the vultures, Cerberus has some $16 billion in assets -- almost double its 2003 figure. Feinberg, who began at Drexel, personally runs around $4 billion, a portfolio that logged a 15 percent return after fees. He began in 1992 with just $10 million. Among some of his investors, according to media reports, have been Secretary of Defense Donald Rumsfeld and hedge-fund pioneer Michael Steinhardt. When the buyout world meets the hedge-fund world, a three-headed beast of giant deals, controversy and hefty returns usually emerges.


    RANK: 5 (TIED)
    Bruce Kovner

    CITY: New York
    FIRM: Caxton Associates
    AGE: 61

    Bruce Kovner's roughly $7 billion flagship fund once again generated high-single-digit returns last year, which is starting to become a trend for the once unstoppable commodities/macro titan. Nevertheless, his Caxton Global Investments still generated some staggering absolute returns -- at least $500 million. Next, take into account his other funds, some of which had pretty good years (the $350 million Caxton Alpha Equity, which Kovner comanages, for example, completed its first full year up 15 percent). Finally, consider that a lot of Kovner's own money is in the fund, and even by neo-conservative estimates it's clear the man is breathing some rarefied air.

    Chairman of the board at the Juilliard School of Music -- he recently gave it one of the world's greatest music-manuscript collections -- he reportedly installed a soundproof music room in his Upper East Side townhouse so he could pound on a Steinway grand piano at night and not bother the neighbors. A staunch Republican, chairman of the American Enterprise Institute and backer, with Michael Steinhardt, of the New York Sun newspaper, Kovner has come a long way from trading soybean futures in his own account.


    RANK: 5 (TIED)
    Eddie Lampert

    CITY: Greenwich, Connecticut
    FIRM: ESL Investments
    AGE: 43

    Three years after a terrifying kidnapping and fresh off his Kmart coup, Lampert has the investment world at his command and some $15 billion under management. A value investor in the mold of Warren Buffett, he didn't have a 300 percent return on his Kmart position like last year; two of his two big long-term plays, Sears and AutoNation, were each up around 15 percent -- still not bad compared to the low-single-digit U.S. equity benchmarks. The man Richard Rainwater recently called "the greatest investor of his generation" is sitting on a mountain of assets, half of it locked up in Sears. Lampert's captors, by the way, are now locked up in prison.


    RANK: 8
    David Shaw

    CITY: New York
    FIRM: D.E. Shaw & Co.
    AGE: 55

    Now one of the biggest hedge funds on the planet, D.E. Shaw, with assets of around $20 billion, used its quantitative approach to churn out returns of roughly 20 percent in 2005. With 3-and-30 fees, this revenue stream boggles the mind. It doesn't all go to chairman Shaw, but enough does to put him in elite company. In the months ahead, we expect Shaw will be grappling with the tricky task of meeting regulatory obligations while keeping his computer-driven statistical arbitrage techniques from falling into the wrong hands.


    RANK: 9
    Jeffrey Gendell

    CITY: Greenwich, Connecticut
    FIRM: Tontine Partners
    AGE: 46

    It was yet another banner year for Gendell's enormous operation, which has been smoking the competition with a string of 100 percent–plus returns based on an activist strategy targeting industrials. When Tontine increased its stake in homebuilder Beazer Homes USA to 10 percent, Gendell demanded that management begin a share repurchase, which spurred a share-price hike of 25 percent within six weeks. On the philanthropic side, Gendell donated more than $2 million to Duke University, his alma mater, to fund two professorships in the new energy-and-environment graduate program there.


    RANK: 10 (TIED)
    Louis Bacon

    CITY: New York
    FIRM: Moore Capital Management
    AGE: 49

    A global macro maestro, Bacon orchestrated some solid performance for his $6 billion flagship Moore Global funds, which returned more than 15 percent last year. Meanwhile, several of his other funds (with some $4 billion run by several other portfolio managers) also fared well. The avid outdoorsman once again bagged quite a bounty.


    RANK: 10 (TIED)
    Stephen Mandel

    CITY: Greenwich, Connecticut
    FIRM: Lone Pine Capital
    AGE: 50

    It was a mondo-boffo year for Mandel, the Tiger Management alum, as his firm has now reached nearly $10 billion. His Lone Cedar fund, with $2 billion, was up over 20 percent. Mandel, who has expanded into long-only funds, is one of several hedgies who have indicated they don't plan to register with the SEC. We're guessing that could mean longer lockups. Clients likely won't mind.


    Illustrations by Jeff Wong
    Copyright © 2005 Doubledown Media, LLC. All rights reserved.

    Trader Monthly, 36 W. 44th Street, 4th Floor, New York, NY 10036
    #10     Mar 27, 2006