FLASHBACK FRIDAY: RENOWNED CURRENCY TRADERS
In the very first edition of Forexpedia’s Flashback Friday, we will look back at five of the most notable forex traders (in no particular order).
Stanley Druckenmiller and George Soros crumbled the Bank of England by shorting $10 billion in British pound in 1992. As a result, they generated $1 billion. He even became more popular when Jack Schwager’s 1994 book, The New Market Wizards, featured the Philadelphia native.
Druckenmiller graduated at Bowdoin College and took a doctorate degree at the University of Michigan. In 1977, he dropped out and began his financial career at Pittsburgh National Bank as as management trainee. Four years later, he founded his own company Duquesne Capital Management. He also worked as Quantum Fund’s lead portfolio manager and managed Soros’ money for several years.
Although Duquesne surpassed the 2008 economic downfall, the renowned hedge fund manager shut his own fund because the necessity to maintain his successful track record was taxing.
Once upon a time, the cab driver took courses at Juilliard School. Bruce Kovner made his first trade until 1977 by borrowing against his personal credit card to purchase soybean futures contracts and earned $20,000 from that trade. He booked millions in profits when he joined Commodities Corporation.
The reputable trader formed Caxton Alternative Management (now Caxton Associates LP) in 1982. Caxton’s division between commodity and currency positions, as well as its $14 billion in assets made the company as one of the world’s most successful global macro hedge funds.
Kovner, who retired from managing the firm in 2011, is a major philanthropist as well who is passionate on reforming education.
This young currency trader kicked off his career at Salomon Brothers in which the company raised his capital limit to $700 million. In 1986, Andrew Krieger joined Banker’s Trust in 1986 and reaped $300 million for the company for trading the New Zealand dollar. At that time, he applied the leverage of 400:1 and secured a short position larger than New Zealand’s money supply. However, the bank only gave Krieger a $3 million bonus for his remarkable trade.
Krieger left the firm and worked as senior portfolio manager at Soros Fund Management Inc. He eventually left Soros’ company to launch Krieger & Associates Ltd., saying it was his dream to create his own trading firm.
The Cornell University alumnus turned $12,000 into $250,000. But a poor trading decision wiped out all of his earnings that taught him a lesson the hard way - risk management. That unfortunate incident did not stop Bill Lipschutz from pursuing his aspiration, though.
Lipschutz pursued his MBA degree and worked for Salomon Brothers’ foreign exchange unit in 1982. During his stint, the trader gained $300 million a year and became the institution’s principal trader for its forex account from 1984 to 1990. In 1995, Lipschutz established Hathersage Capital Management with some of his Cornell classmates.
During World War II, the young Jewish-Hungarian teenager overcame the Nazi occupation of Hungary by leaving the country. George Soros, who used to work as a waiter and a railway porter in London, built Soros Fund Management in 1970, with more than $30 billion in assets as of this writing.
Soros and Druckenmiller made headlines when they broke the Bank of England in 1992, earning the reputation as one of the best traders in the industry. But their trade affected the United Kingdom, as British government was forced to withdraw the currency from the European Exchange Rate Mechanism because of failure to maintain the mandated trading band. That incident was called Black Wednesday.
Soros is widely known for backing progressive and liberal political advocacies, as well as targeting drug legalization, end-of-life care programs, and immigration policy reforms.
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