Nice graphic showing the 10 greatest — and worst — trades of all time. The lure of these outsized billion dollar wins seems to affect the psychology of many investors and traders, looking for that one giant score.

 

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Jesse Livermore
Source: 888 Markets

 

This is a huge data set — click (and then again) to see the full size graphic.

 

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888 Markets - The Best And Worst Trades of All Time

Category: Digital Media, Trading

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8 Responses to “Best & Worst Trades of All TIme”

  1. Alex says:

    Livermore also lost all or almost all his money and committed suicide. He had remarkable talents, but like most people with remarkable talents, he also had great shortcomings. He was willing to risk everything, probably because he loved to gamble, or he was sure he was right, or some combination. I have known other people with this last characteristic, none of whom were as talented as Livermore. The lucky ones lose early, and find a way to get it under control, even though none of them ever overcome it. The unlucky ones hit it big after a short streak of wins, then lose it all and spend an unhappy lifetime trying catch lightening in a bottle for a second time.

    Jesse Livermore is an interesting character to read about, and someone to learn investor psychology from, but studying and copying his investing techniques is almost certainly a very dangerous thing to do.

    • Hedge Fund Guy says:

      John Paulson, after raising almost $45 billion following his “greatest trade,” dropped between 35-40%. On a dollar basis, he wiped out eveyr prior cent he made for investors and then some.

  2. Capitalist Canuck says:

    The Dodge Brothers investment in Ford trump all these schmucks!

    They turned $3,000 into $35 million over six years.
    (and Ford spitefully bankrolled their $200 million auto company)

    That’s a 12,000,000% return, today’s equivalent of $75,000 into $900,000,000.

    Considered the single best business deal in American history.

  3. Livermore Shimervore says:

    Livermore was said to be heavily hedging his bet so there is doubt whether he actually netted $100 million in th end.
    And yes he lost tons of money after becoming famous which reminds us all why hedge funds as a class are a terrible idea in general: the human element will eventually sabotage any strategy no matter how perfect. The human brain is incapable of scaling up an immensely profitable opportunity without also scaling up its self-destructing traits.

    Livermore is the text book example of why you will never beat the index. The index has no plans for greater glory, it doesn’t want to show off how smart it is, get revenge on the all the girls who rejected him, laugh at all the investors that once passed on it, doesn’t get lazy from collecting a % of AUM.
    It only knows how to do one thing: to beat humans.

  4. Stock Soup says:

    there was this silver trader (I think silver) who lost something like 1 billion of this 1.25 billion fortune betting lehman would bounce back before it went bankrupt. he was from england but lived in the bahamas or something like that

    i don’t remember the details enough to google it

  5. Stock Soup says:

    Joe Lewis lost 1.2 billion betting on Bear Stearns before it’s collapse. at the time it was reported to be most of his net worth. I don’t believe the wikipedia page, he probably wrote it himself

    http://en.wikipedia.org/wiki/Joe_Lewis_(British_businessman)#Bear_Stearns

  6. Stock Soup says:

    According to this edition of the book Reminiscences of a Stock Operator, the original was published a a fictionalized account in the Saturday Evening Post as a series of illustrated articles.

    How do we know what’s true, and what’s embellished?

    http://www.greenapplebooks.com/ebook/9781118422038

  7. William_H says:

    …and I thought the best trade of all time was Lou Brock for Ernie Broglio. ;-)