Marty Schwartz: $40K → $20M
Account growth. 1984 U.S. Investing Champion
Originally a stock analyst, he grew tired of writing bullish advice on overpriced companies.
He developed and combined several technical indicators to find lower risk entry points, and found success when he shifted to technical analysis and focused on mathematical probabilities.
He ran his account from $40,000 to $20 million and won the U.S. Investing Championship in 1984. Asked whether technical analysis works, he said he used fundamentals for nine years and got rich as a technician.
A big advocate of moving averages, he identifies healthy stocks by looking for positive divergences in price action against the broad market.
Mark D. Cook: +563%
Return that won the 1992 U.S. Investing Championship
He lost all his capital several times while learning to trade, once more than his entire net worth. In 1982 he sold naked calls on Cities Service that expired deep in the money: his account fell from $165,000 to a deficit of $350,000 in days, a total loss of $815,000 including his family’s accounts.
Within five years he had fully recovered, and vowed never to sell another naked option. He credits the turnaround to his Cumulative Tick Indicator.
The NYSE ‘tick’ counts stocks on an uptick minus stocks on a downtick. When it moves outside a neutral band, his indicator adds or subtracts the ticks to a running total, which works as an overbought and oversold gauge: at extreme readings, the market tends to reverse.
In 1989 he finished second in the U.S. Investing Championship trading stocks. In 1992, after moving to options, he won it with a 563% return.
Victor Sperandeo: 18 years
Profitable in a row, averaging 72% a year
An options trader and technical analyst with 18 profitable years in a row and an average return of 72%. His first losing year was 1990.
He takes risk only when the odds are in his favour. After a two year study he identified ‘life expectancy’ profiles for market moves: an intermediate swing on the Dow in a bull market is typically about 20%, and once that is realised, the odds of further advance drop sharply.
Just as a life insurer prices an 80 year old differently from a 20 year old, he believes most technical analysts fail because they ignore the life expectancy of the move they are trading.
He later became President and CEO of Alpha Financial Technologies, known for its trend following, futures based indices.
Ed Seykota: +250,000%
One client account, by 1988
The pioneer of computerised trading systems. Inspired by Richard Donchian, he began building futures systems in the 1970s and tested them on an IBM 360 programmed with punch cards.
His systems followed trends, with pattern recognition and money management rules. By 1988 one client account was reported up 250,000% on a cash on cash basis.
His daily work is reported to take a few minutes: running his programs and generating the new signals. He credits money management, cutting losses and his technical systems, and calls fundamentals ‘funny mentals’.
James Simons (1938 to 2024): $11.0B
Net worth, Forbes 2012
The ‘Quant King’. He studied mathematics at MIT, earned a PhD at UC Berkeley, broke codes for the U.S. Department of Defense, and coauthored the Chern to Simons theory, later used in physics.
He founded Renaissance Technologies in 1982, a quantitative hedge fund that trades with computer models. A $10,000 investment in 1990 would reportedly have grown to over $4 million by 2007, and the Medallion Fund gained about 80% in 2008 after fees.
Renaissance hired scientists, not MBAs. About a third of its staff held PhDs, including code breakers, astrophysicists and speech recognition experts.
Jim Simons died in 2024.
Ray Dalio: $10B
Net worth, Forbes 2012
He placed his first trade at 12, earned an MBA from Harvard, and founded Bridgewater Associates in 1975 at age 25. From the start he kept a trading diary so his ideas could later be backtested.
Bridgewater became the world’s largest hedge fund, with about $130 billion under management in 2012. Its Pure Alpha fund averaged about 15% a year from 1992 to 2010.
He studies the cause and effect behind historical events and turns that understanding into computer algorithms. Every strategy is backtested and stress tested across periods and markets to make sure it is timeless and universal.
Well defined systems, processes and principles drive every decision, with relatively low leverage and many uncorrelated return streams.
Steven Cohen: $8.8B
Net worth, Forbes 2012
He started trading options in 1978 and made $8,000 on his first day. He founded SAC Capital in 1992 with $25 million; by 2012 it managed about $13 billion and had averaged a reported 36% net return a year.
His style is high volume, fast stock and options trading, at one point around 2% of daily NYSE volume.
Even at SAC, the best trader was profitable on about 63% of trades and most on 50 to 55%. About 5% of trades produced nearly all the profits: worth remembering the next time someone sells a ‘95% accurate’ trading robot.
He believes about 40% of a stock’s move comes from the market, 30% from its sector and 30% from the stock itself.
Paul Tudor Jones II: $3.6B
Net worth, Forbes 2012
Both a discretionary and a systems trader, he started in cotton futures under Eli Tullis, who taught him emotional control.
He started Tudor Investment Corp in 1983 with $300,000. By 2012 it managed an estimated $12 billion with a 24% average annual return.
He became famous for anticipating the 1987 crash, reportedly returning about 200% that year, because he understood how portfolio insurance would set off a chain reaction of selling.
He looks for trades where risk and reward are strongly skewed in his favour and uses little leverage. In his view, a good trader returns two to three times their largest drawdown.
