SAC's Steve Cohen opens up to Paul Tudor Jones

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 about how he got started as a trader, reading the stock tables in the daily newspaper as a child and hanging around the local brokerage firm near his house in Great Neck, N.Y. There “was something in my blood, something that I loved” about trading that has stayed with him... ".

This discussion must have been something to witness in the room. I'm just glad Dealbook has provided notes on this little chat between two modern-day trading legends. Check this one out, gang.

Related articles and posts:

1. Bloomberg profiles SAC's Steve Cohen - Finance Trends.

2. Paul Tudor Jones on trading macro - Finance Trends.

Sebastian Mallaby interview: future of hedge funds

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 posts:

1. A.W. Jones and hedge fund history - Finance Trends.

2. Interview with Sebastian Mallaby: the history of hedge funds - Martin Kronicle.

Don't become complacent (Trainspotting)

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 from Paul Tudor Jones - First Adopter.

2. Paul Tudor Jones: "Trader" - Finance Trends.

Who are the top macro investors of today?

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. We'll start tomorrow with a look at one (seemingly) unlikely candidate and follow up later in the week with a rare interview from one of the recently established stars of the global macro universe.

In the meantime, check out the items in our related posts section for more on the movers & shakers in global macro trading. Know a great macro trader or hedge fund we should follow up on? Chime in at any time via the comments section.

Related articles and posts:

1. The Invisible Hands: Hedge Funds... (Stephen Drobny) - Marketfolly.

2. Paul Tudor Jones: Trader (documentary) - Finance Trends.

Paul Tudor Jones: "Trader" documentary

 

Watch legendary hedge fund manager Paul Tudor Jones in the 1987 documentary, Trader.

See especially PTJ's comments on the importance of focusing on risk management in trading and investing (near the 32 minute mark). Classic stuff.

Related articles and posts:

1. Paul Tudor Jones on trading macro - Finance Trends.

2. Steve Cohen opens up to Paul Tudor Jones - Finance Trends.

3. Sebastian Mallaby interview: future of hedge funds - Finance Trends.

Paul Tudor Jones on trading macro

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 edge on one stock than it is on the S&P 500.

When it comes to trading macro, you cannot rely solely on fundamentals; you have to be a tape reader, which is something of a lost art form. The inability to read a tape and spot trends is also why so many in the relative-value space who rely solely on fundamentals have been annihilated in the past decade. Markets have consistently experienced “100-year events” every five years.

While I spend a significant amount of my time on analytics and collecting fundamental information, at the end of the day, I am a slave to the tape and proud of it".

And for those who'd like to read more in this vein, see II's interview with Louis Bacon, of Moore Capital, as well. You'll note the Bacon-Jones connection right from the opening paragraphs. Enjoy.