LEARN FROM THE GENERALS OF THE MARKETS - PART 54
“I've found that the more focused I am on trading and
living a successful life, the fewer groups I actually fit into.” – Louise Bedford
Kenneth Griffin was born in 1968, Florida, USA. He’s an
American trader and funds manager. He attended Boca Raton Community High
School, and then Harvard University. While at the University, he began to
manage some portfolios (as well as focus on his education). His first portfolio
was worth $265,000 (including contribution from his granny). He sold short and
made gains from the markets in 1987.
As soon as he earned a degree in economics (1989), an
investor named Frank C. Meyer was impressed by his trading performance and he
gave him $1 million to trade with. Kenneth was able to maintain his success
with about 70 per cent profit. Soon, people began to hear of his trading
prowess and some were intrigued enough to start investing with him.
He founded his hedge fund firm: Citadel LLC, a Chicago-based
investment firm, in 1990. The capital base was $4.2 million. The firm grew
quickly. In fact, the business kept up growing year after year and Kenneth grew
richer and richer (year after year), until he eventually became a billionaire.
He first appeared on Forbes 400 (2003), with a net worth of $650 million. His
worth was eventually over $3 billion (some sources even say it has grown more
than that). In 2011, he was ranked as the 512th richest person in the world.
In the year 2004, he earned an income of $240 million. He
was paid $210 million in 2005, making him one of the 25 highest paid funds
managers that year. His firm continued to perform strongly, and he was paid
$1.7 billion in 2006, plus $2.6 billion in 2007. In 2011, he collected a salary
of $700 million. No wonder he was able to buy the most expensive condo in
Chicago for a mere $15 million, in 2012 (it was the most expensive there at the
time). Very recently, he was paid close to $1 billion dollars.
At first he avoided the press and rarely gave interviews.
But now, he’s more open and he’s taken a glare of publicity. He now talks about
his purchases, contributions and political views.
He makes large donations to various individuals and
programs: including education, medicine, research and politics. For example, in
February 2014, he gave $150 million to Harvard University, so that some
students could receive financial assistance in their studies. That was the
biggest single donation in Harvard’s history, to date. The financial assistance
is based on the needs of students. This would help some students who’ve
difficulties in paying for their education.
Kenneth is happily married with 2 kids.
Lessons
These are some of the lessons that can be learned from
Kenneth Griffin:
- Kenneth is a
great trader, but without doubt, he got his own weaknesses. All traders
have their strengths and weaknesses. The logic is to capitalize on your
strengths and minimize/control your weakness. Doing so will push you ahead
of the crowd who tend to be undisciplined in most cases.
- The highest paid
footballer (C. Ronaldo) in the world is far poorer than the tenth highest
paid funds manager in the world. In order word, the highest paid funds
manager (David Tepper, for Kenneth is number 5 on the list for the year
2014) is 35 times more paid than C. Ronaldo. A footballer may be more
popular because of hundreds of millions of fans and viewers worldwide; yet
a funds manager, who trades on his computers in his office, may be far
more strikingly rich. Kenneth was not born a billionaire, but he becomes
one. His wealth is self-made. You may have been born in a financially
humble family, but that shouldn’t preclude you from reaching financial
freedom.
- I beg you
profoundly; try to be the best trader you can be. Trading is full of
challenges that can be overcome. Kenneth’s faced the challenges before and
he overcame them. You too can overcome. When you become a successful
trader, you can manage others’ money and you’ll be paid handsomely when
you make money for others. Your track record will speak for you. The
effort to reach consistency in trading may be daunting, but the eventual
rewards are huge.
- Note that it
took Kenneth many years to become what he’s today; neither does he double
his gains overnight. Please map out a long-term plan to make realistic and
consistent gains each year. Trading career is a journey of a lifetime.
- Yes, Kenneth’s
beginning was humble. He started Citadel with a few million dollars and
the firm grew up to become one of the world’s largest hedge funds. The
growth was gradual, but it was sure. Don’t despise your little beginning;
though it is small. Your latter end shall increase greatly.
- Leverage has
advantages and disadvantages. It gives you some power while you’re also
exposed to more risk. The trick is to make use of the leverage you’re
given in a rational way so that you benefit from it and at the same time,
limit the adverse effect it may bring.
Conclude: Please
don’t forget that our orders in the markets are expected to bring us some
profits in the long run. So there is no need for us to stay glued to our
computer, and therefore we’d do well to leave our orders to pan out without
being micromanaged. As soon as we control our negativity, there would be
recovery, and eventual going ahead.
This article is ended with a quote from Kenneth:
“Capital markets reward you for what you learn that other
people have yet to ascertain.”
Source: www.tallinex.com
Learn from the Generals of the Markets: Market Generals
