The top 10 professional traders in the world earned a combined total of an estimated $11.15 billion in 2017. The top 4 actually crossed the $1 billion mark in individual earnings. The question everyone wants to ask is – what makes these traders so hugely successful? We’ll be taking a look at the top 10 professional traders in 2018 and find out what makes some of them such accomplished traders.
Michael Platt is a British investor and hedge fund manager. He is also the co-founder and managing director of Europe’s third largest hedge fund, BlueCrest Capital Management. In December 2015, BlueCrest returned the money of all its other investors and focused on managing the money of Platt and his partners. This resulted in BlueCrest generating a 50% return. The company sustained its performance by generating returns of 54% on its capital. Platt earned an estimated $2 billion in 2017, making him one of the richest hedge managers in Great Britain.
So, what makes Platt so successful? In his own words “big egos get in the way of making money because they can never admit that they are wrong”. Admitting you are wrong, or have a losing trade and getting out of it, is a big part of becoming a successful trader.
Jim Simons is an American mathematician, hedge fund manager and philanthropist. He is the founder of seasoned quantitative hedge fund firm, Renaissance Technology. He is known as the “quantitative investor” and is one of the pioneers in developing quantitative trading waves, which now dominates the trading world.
His hedge fund firm manages $57 billion and generated returns of 14.5% in 2017. Renaissance’s Medallion Fund, which only invests money belonging to Simons and his Renaissance partners and employees, is Simons’ major source of income. It is estimated that Jim Simons earned $1.8 billion in 2017.
David Tepper is an American investor and hedge fund manager. He is the founder and CEO of Appaloosa Management, a global hedge fund firm. His firm manages around $17 billion in funds and most of the firm’s funds belong to Tepper and the employees. Tepper has been steadily returning money to client investors in recent years. His firm generated returns in the double digits in 2017 and he earned around $1.5 billion. Tepper is known for his tempered approach to investing. In his own words “sometimes the hardest thing to do is to do nothing”. Sometimes traders analyse trades looking for a good entry and they can’t find one – instead of continuing to look and analyse, they should just accept that their trade idea is not worth holding onto. This is essentially what Tepper has mastered.
Ken Griffin is an American investor, philanthropist and hedge fund manager. He is also the founder and CEO of Citadel, a global investment firm. The Citadel hedge fund manages assets worth $27 billion, making it one of the world’s largest alternative investment management firms. Griffin’s main hedge fund generated returns of 13.1% in 2017 and other funds by Citadel, such as Global Fixed Income and Citadel Tactical Trading, returned around 12%. The estimated earnings of Ken Griffin stood at $1.4 billion in 2017. Griffin has an estimated net worth of $8.5 billion as of October 2017, making him one of the richest people in America.
Israel “Izzy” Englander is another American investor, hedge fund manager and philanthropist. He is also the co-founder of Millennium Management, which manages funds worth $36 billion. He has developed one of the strongest multi-manager platforms, employing a number of trading teams. Millennium Management generated returns of 7.1% in 2017. He has an approximate net worth of $5.2 billion and earned an estimate of $900 million in 2017.
Ray Dalio is yet another US-based hedge fund manager, investor and philanthropist. He is the founder of the world’s biggest hedge fund firm, Bridgewater Associates, which manages assets worth around $160 billion. Bridgewater’s All Weather Fund generated returns of 13.1% in 2017.
In April 2017, Dalio stepped down as the co-CEO of Bridgewater, but still plays a key role in the operation of the firm. Ray Dalio’s net worth is estimated at approximately $16.8 billion, having earned around $900 million in 2017.
As one of the world’s best traders, he understands the role of a diverse portfolio. In his words, “I think that the first thing is you should have a strategic asset allocation mix that assumes that you don’t know what the future is going to hold.”
Christopher Hohn is an English investor and hedge fund manager. He is the founder of Children’s Investment Fund Management. His firm manages assets worth around $18 billion and the firm’s hedge fund generated returns of 27% in 2017. Hohn has been a consistent performer over the years and his hedge fund has generated double digit returns for three years in a row. His earnings for 2017 were estimated at around $600 million.
Daniel Loeb is an American hedge fund manager and investor. He is the founder and CEO of Third Point Firm, which manages assets worth $19 billion. He is known for his strategy of buying into struggling firms, changing their management and putting them back on track for generating profits. His hedge fund generated returns of 18.1% in 2017 and his estimated earnings were $750 million for the year.
Ole Andreas Halvorsen is a Norwegian hedge fund manager, investor and philanthropist. He is the co-founder and CEO of Viking Global Investors. He is a protégé of the famous hedge fund manager, Julian Robertson. Viking managed $25 billion worth of assets as of October 2017 and generated returns of 12% in 2017. Halvorsen has an approximate net worth of $3.7 billion and earned an estimated $600 million in 2017.
Steve Cohen is an American hedge fund manager, investor and philanthropist. He is also the founder of Point72 Asset Management and SAC Capital Advisors. In 2013, he failed to prevent insider trading at his firm and was banned by the SEC from managing capital for his clients. In 2018, the ban ended, enabling Point72 Asset Management to manage money for outside clients. Cohen manages his own money and is quite active. In 2017, Cohen earned an estimated $700 million.
All these traders have years of experience and it took them years to reach the heights of success they are now witnessing. And, remember, even the most successful traders see their fair share of losses. The key is to learn from experience and remain disciplined in one’s approach.