Paul Tudor Jones

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Paul Tudor Jones II (September 28, 1954, Memphis, Tennessee) is a well-known commodity trader. Having made $750 million in 2006, he is worth an estimated $2.5 billion, and was ranked by Forbes in March 2007 as the 369th richest person in the world.^[1]

1 Business life
2 Trading style and beliefs
3 Philanthropy
4 Personal life
5 References

[edit] Business life

Jones attended Memphis University School and then University of Virginia, earning an undergraduate degree in economics in 1976 as well as a welterweight boxing championship. ^[2]

In 1976 he started working on the trading floors as a clerk and then became a broker for E.F. Hutton. In 1980 he went strictly on his own for two and a half profitable years, but "really got bored." He then applied to Harvard Business School, was accepted, and packed to go when the idea occurred to him that: "this is crazy, because for what I'm doing here, they're not going to teach me anything. This skill set is not something that they teach in business school."

He consulted his cousin, William Dunavant Jr., for advice. Dunavant, whose Dunavant Enterprises is the world's largest cotton merchant, sent Jones down to New Orleans to talk with commodity broker Eli Tullis, who hired and mentored him to trade cotton futures at the New York Cotton Exchange.

Jones later said:

"He was the toughest son of a bitch [Eli Tullis] I ever knew. He taught me that trading is very competitive and you have to be able to handle getting your butt kicked. No matter how you cut it, there are enormous emotional ups and downs involved."^[3]

In 1980 he founded Tudor Investment Corporation which is today a leading asset management firm headquartered in Greenwich, Connecticut. The Tudor Group, which consists of Tudor Investment Corporation and its affiliates, is involved in active trading, investing and research in the global equity, debt, currency and commodity markets.

One of Jones' earliest and major successes was predicting Black Monday in 1987, tripling his money during the event due to large short positions.^[4]

Jones uses a global macro strategy when trading in some of his funds. This strategy can be seen in the 1987 PBS film "TRADER: The Documentary". ^[5] The film shows Mr. Jones as a young man predicting the 1987 crash using methods similar to market forecaster Robert Prechter.

Although the video was shown on public television in November 1987, very few copies exist. Those that do are hoarded by traders who watch the hourlong movie in the hope of gleaning possible trading tips from Mr. Jones. On the Internet, bids for the video start at $295. According to Michael Glyn, the video’s director, Mr. Jones requested in the 1990s that the documentary be removed from circulation. ^[6]

Jones' firm currently manages $17.7 billion (as of June 1, 2007). Their investment capabilities are broad and diverse, including global macro trading, fundamental equity investing in the U.S. and Europe, emerging markets, venture capital, commodities, event driven strategies and technical trading systems.

[edit] Trading style and beliefs

As reported in Market Wizards, Jones futures trading style and beliefs are summarized as follows ^[7]:

Contrarian attempt to buy and sell turning points. Keeps trying the single trade idea until he changes his mind, fundamentally. Otherwise, he keeps cutting his position size down. Then he trades the smallest amount when his trading is at its worst.

Considers himself as a premier market opportunist. When he develops an idea he pursues it from a very-low-risk standpoint until he has been proven wrong repeatedly, or until he changes his viewpoint.

Swing trader, the best money is made at the market turns. Has missed a lot of meat in the middle, but catches a lot of tops and bottoms.

Spends his day making himself happy and relaxed. Gets out if a losing position is making him uncomfortable. Nothing’s better than a fresh start. Key is to play great defense, not great offense.

Never average losers. Decreases his trading size when he is doing poorly, increase when he is trading well.

He has mental stops. If it hits that number, he is out no matter what. He uses not only price stops, but time stops.

Monitors the whole portfolio equity (risk) in realtime.

He believes prices move first and fundamentals come second.

He doesn’t care about mistakes made 3 seconds ago, but what he is going to do from the next moment on.

Don't be a hero. 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.

[edit] Philanthropy

Paul Tudor Jones is the founder of the Robin Hood Foundation, an organization dedicated to fighting poverty in New York City. He also formed a $125 million commodity pool with LBO executive Ray Chambers, called the One to One Charitable Fund, that devoted most of its profits to helping disadvantaged children.

He is the Chairman of the Board of the Excellence Charter School, the country's first all-boys charter school, located in the Bedford Stuyvesant neighborhood of Brooklyn, New York.

He owns Grumeti Reserves in Tanzania’s Western Serengeti and was recently lauded by the East African country’s Parliament for not permitting hunting in his reserve.^{[citation needed]}

He has also made large donations to his alma mater, the University of Virginia, including a $20 million donation which went to the construction of a new basketball arena, named John Paul Jones Arena in honor of his father.^[8]

Jones is a director of the National Fish and Wildlife Foundation and The Everglades Foundation.

[edit] Personal life

Jones' father, John Paul Jones, was an attorney who attended the University of Virginia. Paul Tudor Jones has been married to his wife, Sonia, a former Australian fashion model, since 1988. They have 4 children.^[9]^[10]