Paul Tudor Jones II (born September 28, 1954) is an American billionaire hedge fund manager, conservationist and philanthropist. In 1980, he founded his hedge fund, Tudor Investment Corporation, an asset management firm headquartered in Stamford, Connecticut. Eight years later he founded the Robin Hood Foundation, which focuses on poverty reduction.
In 1976 after graduating from the University of Virginia Jones asked his cousin William Dunavant Jr. for an introduction to trading. Dunavant was the CEO of Dunavant Enterprises, one of the world’s largest cotton merchants. Dunavant sent Jones to talk with commodity broker Eli Tullis in New Orleans. Tullis represented some of the largest cotton traders in the world. Tullis hired Jones and mentored him in trading cotton futures at the New York Cotton Exchange. Eli Tullis fired Jones when he fell asleep at his desk after a night of partying in New Orleans. Many years later Jones served as treasurer in 1986 and then as chairman of the New York Cotton Exchange from August 1992 through June 1995.
As reported in Market Wizards and the press, Jones futures trading style and beliefs are as follows:
- 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 of a losing position that 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 real time.
- He believes prices move first and fundamentals come second.
- He doesn’t care about mistakes made three 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.
Jones’s global macro trading style is based primarily on technical analysis, as opposed to value investing, with an emphasis momentum factors driving markets. In a 2000 interview, he suggested however he regretted not being more involved with venture investing in technology firms during the 1990s.