The Best Traders Alive
Paul Tudor Jones
The founder of Tudor Investment Corporation, a $12 billion hedge fund, Paul Tudor Jones made his fortune shorting the 1987 stock market crash. Jones was able to predict the multiplying effect that portfolio insurance would have on a bear market. Portfolio insurance, a popular risk management tool, involves buying index puts to lower one's portfolio risk. Thus, in a bear market, more and more investors will choose to employ their put options and drive the market down even further. Jones' bet paid off big: on Black Monday of 1987, he was able to triple his capital from his short positions. Jones is worth roughly $3.6 billion today and is currently managing his hedge fund.