Droppin' Knowledge: Tudor Can't Forgive Himself

“If trading is like chess, then macro is like three-dimensional chess. It is just hard to find a great macro trader.”

Paul Tudor Jones, May 2008

There’s a great interview up on Institutional Investor with Paul Tudor Jones, one of the biggest and most successful hedge fund managers in the business.  It’s a bit dated (from ’08) but definitely worth a read.

One portion that stood out in particular was Jones’ inability to get over the fact that he missed out on profiting from the sub prime collapse and I found it refreshing to hear someone of his caliber and reputation talking about something that he got wrong.

I missed the subprime opportunity of 2007, and it rankles me every time I hear the term. We have studiously avoided mortgages at Tudor specifically because it is a big-carry game that does not adequately compensate for the inherent tail risk. That unfamiliarity, though, came with a huge opportunity cost.

Paul Tudor Jones is coming off of a rough year, like many of his peers, but was willing to discuss a lot of interesting themes in the piece. 

 He talks about what he thinks the end result of oil price speculation will be, his background in commodities trading and the fact that the next generation of hedgies will be held back by their unfamiliarity with the “lost art of tape-reading”

This is a really rare peek inside the mind of one of the greats, drop everything and read it.

Full Story:  Paul Tudor Jones Interview (II)