The Greatest Trades In History

by | 5 Nov, 2018

The Greatest Trades In History

We recently went back in time to look at some of the maddest moments in the history of finance. There’s certainly been a lot of them. But there’s been some extraordinary successes, too.

After all, all trades are two sided: For every loser, there’s a winner. So who are the greatest winners in the history of the markets, and how did they do it?

Jesse Livermore runs riot in the Great Crash – 1929

You probably haven’t heard of Jesse Livermore. But he is perhaps the greatest short-seller in the history of the US stock market.

Livermore was a maverick. He traded on his own, using his own proprietary system. He sold the market short as it crashed during the Panic of 1907, predicting that a sharp drop in prices would force speculators to sell. He was right, pocketed $3 million from this trade and began an investment journey that would take him to the very pinnacle of his profession.

In 1929, Livermore noticed market conditions similar to that of 1907. So he began selling stocks and building a large short position. History repeated itself, and Livermore made $100 million from the Wall Street Crash. He was a billionaire several times over in today’s money.

George Soros breaks the Bank Of England – 1992

Until the 1990s, the British pound shadowed the German mark, leaving Britain with low rates and high inflation. George Soros, a hedge fund manager, saw this was unsustainable and bet that fixed exchange rates could no longer withstand market forces. As Britain raised rates to defend the pound, Soros began shorting the currency.

Soon the British government realised it was wasting billions trying to prop up its currency, and withdrew from the European Exchange Rate Mechanism, a system designed to promote monetary stability in Europe. On 16th September 1992, otherwise known as Black Wednesday, the pound collapsed. Soros closed his short positions and made $1 billion on the deal.

To this day, he is known as “The man who broke the Bank Of England.”

John Paulson predicts the subprime crisis – 2007

John Paulson is an American hedge fund manager. He’s also a man who made one of the biggest fortunes in Wall Street history.

As anyone who’s watched The Big Short knows, few people saw the 2007 subprime crisis coming. Even fewer timed the market correctly. Paulson did both.

Paulson & Co bet big against mortgage-backed securities, convincing banks to sell credit-default-swaps on them. When the market tanked, liquidity dried up and the market was flooded with offers. Paulson cashed in to the tune of $3-4 billion.

Andrew Hall waits 5 years to make £100 million – 2008

Andrew Hall is famous for being the world’s greatest ever oil trader. But back in 2003, he was just a guy trading oil futures for a commodities house on Wall Street.

Oil was trading at around $30 a barrel and expected to remain stable in the aftermath of an ugly recession. Hall bet otherwise, buying cheap long-dated oil-futures that would pay off if the price of oil reached $100 at any point over the next five years.

This was incredibly risky. If the oil price failed to hit $100, Hall’s positions would be worthless and his employer, Phibro, would lose big time. But that didn’t happen. Oil reached $100 in 2008, and Hall generated $100 million for his employer, not to mention a monster pay day for himself.

David Tepper goes long on banks – 2009

Talking heads tend to focus on the money that was made shorting the subprime mortgage crisis, but billionaires were made betting on the recovery, too.

In the aftermath, people were scratching their heads, trying to work out how they missed the disaster heading for them. David Tepper wasn’t. He was busy working on the next opportunity.

In 2009, with the threat of nationalization looming over America’s biggest banks, Tepper bought huge quantities of depressed bank stocks, including Citigroup and Bank of America. In months, the value of his holdings skyrocketed, netting Tepper’s hedge fund $7 billion.

Tepper personally took home $4 billion. While most investors sat around scratching their heads, trying to figure out what to do, Tepper took action and made a fortune. Now he’s buying the Carolina Panthers.

Throughout history, traders have bought and sold assets and instruments. Some have made fortunes. Others, lost them. Behind every losing trade is a winner and making money from the markets takes courage, smarts and timing. These traders had those qualities in spades, and made them count when it mattered. Now it’s your turn.

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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