1. John Paulson’s bet against sub-prime mortgages made his hedge fund
a cool $15 billion in 2007,that is billion with a ‘B’. he is only one
of a very exclusive club that was able to make this call and win with
it. That was a call of a lifetime that everyone was blind to even deep
into the crises.
2. Jesse Livermore’s call on the Crash of 1929, Jesse Livermore did
not need any computer models, technical indicators, or derivatives to
make $100 million dollars ($1.2 billion in today’s dollars) for his own
personal account during a time when everyone was bullish and then almost
everyone lost their shirts. It was an amazing day when Jesse came home
and his wife thought they were ruined and instead he had the second best
trading day of anyone in history.
3. John Templeton invested heavily into Japan during the 1960s, when
Japan was beginning its three-decade long economic miracle, Templeton
was one of the country’s first outside investors. At one point, he
boldly put more than 60 percent of his fund in Japanese assets.
From its founding in 1954, his Templeton Growth Fund grew at an
astonishing rate of nearly 16 per cent a year until Templeton’s
retirement in 1992, making it the top performing growth fund in the
second half of the 20th century.
A $100,000 stake invested in 1954, with distributions reinvested, would have grown to $55 million in 1999.
4. George Soros’ breaking of the bank of England by shorting 10
billion worth of pound sterling and forcing the U.K. to withdraw from
the European Exchange Rate Mechanism (ERM)(September 16, 1992). Soros
made $1 billion in the process, which was an unimaginable sum back then.
5. Paul Tudor Jones’ shorting of Black Monday. Paul Tudor Jones
correctly predicted on his documentary in 1986 based on chart patterns
that the market was on the path to an crash at an epic level. He
profited handsomely from the Black Monday crash of 1987, the largest
single-day U.S. stock market decline (by percentage) ever. Jones
reportedly tripled his money, making as much as $100 million on that
trade as the Dow Jones Industrial Average plunged 22 percent. Another
amazing trade to walk away from with a fortune when so many others were
ruined in the aftermath. He played it to perfection.
6. Andrew Hall’s back in 2003, when oil was trading at $30 barrel and
the economy had just recovered from the dot-com crash, Andrew Hall
wagered that prices would top $100 per barrel within five years. When
oil prices blew past $100 five years later in 2008, Hall’s employer
Citigroup made a bundle and Hall took home $100 million as a part of his
compensation for this and other successful trades. He predicted the
amount of the trade and the time frame and structured futures contracts
to profit greatly from the move to $100 or expire worthless. He did what
is suppose to be impossible, predict a price and execute a trade
perfectly far in advance for maximum profit.
7. David Tepper’s bought severely depressed shares of big banks early
in 2009, Bank of America and quadrupled in value and Citigroup tripled
in value from their bottoms earlier in the year. That was good enough
to earn Tepper’s hedge fund $7 billion. His personal cut was $4 billion.
His bet was that they would be bailed out and not nationalized. He was
correct.
8. Jim Chanos’ prescient shorts correctly predicted, and profited
enormously, from the demise of Enron. Other examples of his successful
shorts include Baldwin-United, Tyco International (NYSE: TYC), Worldcom
and recently homebuilders like KB Home (NYSE: KBH)
9. Jim Rogers’ spotted the secular bull market for commodities way
back in the 1990s. In 1996, he created the Rogers International
Commodity Index. Subsequently, he worked on ways to make that index
invest-able. Since 1998, the index has returned 290 percent through the
end of 2010. This compares to the 10 percent return of the S&P 500
Index during the same period.
10. Louis Bacon’s made a killing in 1990 by anticipating that Saddam
Hussein would invade Kuwait. Bacon went long on oil, short on stocks,
and helped his new hedge fund return 86 percent that year. In the
following year, he also correctly bet that the U.S. would quickly defeat
Iraq and the oil market would recover.
