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Paul Tudor Jones

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Paul Tudor Jones II

Born: Memphis, Tennessee Role: Chairman and CEO, Tudor Investment Corporation Education: University of Virginia (1976); journalism courses at Memphis State

Full-blooded example of a modern player in the tradition of J.P. Morgan — not a permanent bull or bear, but a consistent winner. Gave the afterword to Jon Markman's 2010 annotated edition of reminiscences-of-a-stock-operator as a practitioner's view on why the book endures.

Career Arc

1976: Graduated University of Virginia. Began career as a commodities broker in New York, specializing in cotton futures.

Age 25: Became a highly successful "local" on the New York Cotton Exchange — trading just for himself.

1982: On the cusp of a two-decade bull market, left the floor of the exchange to branch out into equities and bonds.

Tudor Futures Fund: Has not recorded a single losing year in 25 years of operation. Manages approximately $11 billion on behalf of institutions, pension funds, and individuals worldwide.

Exchanges: Held seats on the major exchanges; chaired the New York Cotton Exchange; innovated investment products and led efforts to educate newcomers on strategies and ethics.

Robin Hood Foundation (1988): Philanthropic organization. Has partnered with hundreds of grass-roots organizations to invest more than $1 billion in long-term solutions for New Yorkers in need. Also founded an elementary school and after-school programs for underserved children in New York, and led efforts to preserve wildlife in East Africa and Florida.

On Reminiscences

Jones has given reminiscences-of-a-stock-operator to new employees to make sure they're on the same page. His interview for the 2010 Markman edition, answered from ports of call while flying to meetings in Tanzania, India, and the United Kingdom:

Why the book is a classic: "Let's call the book what it really is, and that is a historical novel... the journalist borrowed many of the great trading tenets of the time in composing the mythical Livingston character... there is nothing new under the sun in the art of speculation, and everything that was said then completely applies to the markets of today. My guess is that the same will hold true for time eternal as long as man's basic emotions remain intact — fear, greed, happiness, sorrow, elation, dejection, excitement, and apathy."

On early losses: "I lost $10,000 when I was 22, and when I was 25 I lost about $50,000, which was all I had to my name... My father flew up from Memphis and sat me down in my tiny New York City apartment and began lecturing me as lawyers do. He commanded, 'Leave the gambling den behind. Come home and get a real job in a safe profession like real estate.' Of course, I did not."

On why loss is formative: "I think it's no coincidence that our greatest champions, our greatest artists, our greatest leaders, our greatest everything all seem to have experienced some kind of gut-wrenching loss... intense feeling of desperation that accompanies such a horrifically deflating experience indelibly cauterizes great risk management reflexes into a trader's very being."

Two unpleasant experiences every trader faces: (1) A devastatingly brutal losing streak that tests grit — does he have the stamina, courage, guts, and smarts to get up and engage the battle again? (2) The moment when he begins to ask why it is he makes money and if this is truly sustainable — "the scarier one, because it acknowledges a certain lack of control over anything."

On technology changing nothing: "The book says it the best on the second page: 'There is nothing new in Wall Street.' And even that sentiment is hardly new. King Solomon beat Lefevre to the punch by about 5,000 years when, in the Book of Ecclesiastes, he wrote, 'There is nothing new beneath the sun.'... markets will always be driven by greed and fear, valuations will always swing from too cheap to too dear, and there will always be a new generation to rationalize why this time it is different."

On journalism as trader training: Jones credited journalism — not economics or business — as "the single most important element of my development as a trader and as a businessman." Newspaper journalism teaches you to fact find, analyze, and condense a story to its most essential points — exactly what a trader does with information. Lefevre had this skill; most business book authors don't.

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