Thursday, December 18, 2014

Leon Cooperman: A Distinguished Trading Veteran


“You have to respect the stock market. If you don‘t, you‘re going to get wiped out.”

Leon G. Cooperman was born in April 25, 1943, in New York, USA. He was born to Jewish parents who immigrated to the US. He’s an astute American trader and philanthropist. He attended Hunter College and after graduation, he worked as a quality control engineer at Xerox. Later, he earned his MBA from Columbia Business School. That was 1967.

Immediately after leaving Columbia Business School, he started working at Goldman Sachs, serving that company in various capacities for the next 25 years. He then started a private firm called Omega Advisors, Inc., based in New York and managing about $6,000,000,000.

In March 2013, Leon was worth $2, 500, 000, 000. Forbes has constantly ranked him among the most influential persons, the richest persons and the highest-earning funds managers. The Institutional Investor All-America Research Team survey voted him the best portfolio strategist for 9 years. He belongs to various societies and foundations. As a philanthropist, he’s made large donations towards many education and cultural causes.

Leon’s married to a wonderful woman named Toby and they’re blessed with children and grandchildren.

Here are the lessons that can be learned from Leon Cooperman:

  1. Leon’s managed funds have been outperforming the markets for over 22 years. He makes at least, average returns of 14.6% per annum. This shows that when you have good strategies that can enable you to survive all market conditions, it is possible to make profits almost on annual basis for the rest of your trading career, though, some years can be better than others.

  1. One secret of successful traders (including other professionals) is to employ the services of those who’re more knowledgeable and more competent than they’re. Leon is aware of this secret and makes use of it. In fact he likes to use this quote from Andrew Carnegie: “Here lies a man who was wise enough to bring into his service men who knew more than he.” Really hedge funds big boys and great financial institutions have pros who’re working for them and thus contributing to their overall success.

  1. Leon uses fundamental analysis in his trading approaches and you can take note of this. Besides, you need to love trading and work hard at it. Discipline is also a must for traders who wish to attain success.

  1. There are always trading opportunities in the markets. Once the opportunities have been sighted, you can open your positions at the predetermined time. As an active trader, you need to monitor your trades and manage them properly.

  1. Leon likes to buy cheap markets and sell expensive markets. Some may call it contrarian trading – which works for those who’re good at it. Profitable speculation also has to do with entering the markets when the prices are right for your positions.

  1. Large pullbacks (called crashes) are a normal thing in bull markets, and good speculators make money from them.

  1. Some of the stocks traded by Leon are winners and some of his stocks are losers, but he knows how to recover quickly and move ahead. This fact reflects in his account history. You can’t be right all the time, but with good trading management principles, you can always recover at last and move ahead.

  1. There are chart patterns, market cycles and repetitive trends in the markets, which have very high winning probabilities. This is one of the secrets behind Leon’s success. You need to identify cycles and repetitive chart patterns that work for the financial instruments you trade.

  1. Courage is important for traders. You need to believe in your trading approach, especially if they worked for you in the past. Sometimes, things mayn’t go as expected, but with persistence, you’ll rebound. You don’t need to abandon your proven system because of temporary losing streaks.

  1. Trading is a university from which you can’t graduate. You continue to learn new things that can improve your career the more and the more. Leon said: “One thing nice about the investment business is that, even though I‘m 68, I continue to learn. You learn something every month and every quarter.”

Conclusion: There isn’t a trader without a scar; and the scar of every trader is the sacrifice being made then and now. Success comes at a cost. Your victory doesn’t lie in knowing what it takes to become a profitable speculator; your victory lies in doing what it takes to become a profitable speculator.

This article is ended by these quotes. The quote above is from Leon, and the quote below is also attributed to him:

“I think all we’ve learned is what we already knew, is that stocks have become like commodities, regrettably, and they go up to a limit and they go down to a limit. And we’ve also known over the years that when they go down, they go down faster than they go up.”

Learn from the Generals of the Markets: Market Generals

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