- The hedge fund billionaire Bill Ackman is among few whominted a multibillion-dollar profit during the throes of thecoronavirus pandemic.
- The famed investor turned a relatively modest $27million bet into a whopping $2.6 billion windfall as theoutbreak continued to drag on stocks and threatened deepeconomic recession.
- From George Soros’ breaking of the Bank of England in1992, to Michael Burry’s now world-famous Big Short during thefinancial crisis, Markets Insider decided to round up some ofthe best trades of all time.
- VisitBusiness Insider’s homepage for more stories.
Pershing Square Capital’s CEO Bill Ackman made headlines after making $2.6 billion for his hedge fund off a wise, yet controversialbet that the coronavirus would crash the stock market.
With stock markets going into free-fall during the economicdownturn, Ackman was one among a handful who landed massiveprofits by using credit protection on investment-grade andhigh-yield bond indexes.
Ackman’s was the latest in a long line of renowned risky butwildly successful bets on the markets.
From George Soros’ breaking of the Bank of England in 1992, toMichael Burry’s now world-famous Big Short during the financialcrisis, Markets Insider decided to round up some of the besttrades of all time.
Check them out below.
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Bill Ackman turned $27 million into $2.6 billion during the coronavirus pandemic
Ackman, the billionaire hedge-fund manager, had an intuition thatthe coronavirus-driven market meltdown would have a greaterimpact than investors expected.
That led him to mint a multibillion-dollarprofit in March 2020, turning a $27 million position into a $2.6 billion windfallthrough defensive hedge bets as the coronavirus outbreakthreatened a deep economic recession.
Ackman’s bet that the debt bubble would burst was based on ahunch that investors would cast aside riskier securities in bondindexes as the coronavirus spread across the world.
The trade was so good that one columnist said it “may be thesingle best trade of all time.”
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Michael Burry’s ‘Big Short’
Possibly the most iconic trading victory of all time, MichaelBurry’s fund Scion Capital built up huge short positions againstthe US sub-prime mortgage market starting in 2004.
When the market collapsed during the financial crisis in 2007 and2008, Burry netted a $100 million profit for himself, and $725million for other investors.
His successes became the subject of Michael Lewis’ seminal bookabout the crisis “The Big Short,” and then a film of the samename.
David Tepper’s $7 billion win during the depths of the financial crisis
In 2009, American billionaire David Tepper bought largequantities of distressed bank assets.
The huge investments he made in Bank of America and otherburdened companies netted his hedge fund an enormous $7 billion.
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‘Evil Knievil’ Simon Cawkwell’s ingenious shorts against Northern Rock
In 2007, British spread-better Simon Cawkwell predicted thedemise of the bank Northern Rock and made a neat profit of over£1 million ($1.2 million) by short-selling its shares.
Kyle Bass’ $4 billion win on the US housing market collapse
In 2007, famed investor Kyle Bass and his hedge fund made a $4billion profit by buying credit default swaps after the housingmarket crashed due to the ongoing US recession.
Read more:A real-estate investor whogenerates $342,000 of annual cash flow shares his unique spin ona popular investment strategy that’s helped land him 114units
Andrew Hall’s $100 million profit on $100 oil futures
In 2003, oil trader Andrew Hall bought cheap long-dated oilfutures that would pay off if the price reached $100 at somepoint over the next 5 years.
By 2008, oil reached $100 and Hall acquired $100 million for hisemployer Phibro, and a mammoth paycheck for himself.
Neil Woodford’s unconventional bets in tobacco stocks
In 2000, British fund manager Neil Woodford invested generouslyin tobacco stocks which were being shunned before the dotcombubble burst.
By 2014, his flagship equity fund received annual returns of morethan 20% from British American Tobacco (BAT).
Read more:BTIG says to buy these 25under-the-radar stocks that have been neglected for years becausethey’re tempting M&A targets with big upside
George Soros: ‘The Man who Broke the Bank of England’
In 1992, billionaire philanthropist George Soros and his hedgefund made a profit of over $1 billion by bringing the Bank ofEngland to its knees after betting that the price of the PoundSterling would drop.
Louis Bacon’s 86% return through betting on oil prices
In 1990, American investor Louis Bacon chose to invest in oilafter correctly predicting that the Iraq War would impact thecommodity’s prices.
He ended up with an 86% return on that bet.
Stanley Druckenmiller’s double bets on the Deutsche mark
Between 1988 and 2000, American investor Stanley Drunckenmillermade millions by making two long bets in the German currency,Deutsche Marks, while working as a trader under George Soros’hedge fund Quantum.
Andrew Krieger at odds with the Kiwi dollar
In 1987, currency trader Andrew Krieger took up a short positionworth hundreds of millions of dollars against the New Zealanddollar. His sell positions exceeded the entire money supply ofNew Zealand and ultimately led to him netting $300 million forhis employer Bankers Trust.
Paul Tudor Jones’ $100 million profit on Black Monday
In 1987, famed hedge fund manager Paul Tudor Jones predicted the’Black Monday’ crash. By shorting the stock market, he ended upwith 200% returns for investors besides a $100 million paycheckfor himself, an almost unheard of sum at the time.
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