To be considered the best you would have to filter for these following quantified variables.
- Long term returns on assets under management.
- Size of assets under management.
- Consistency of returns.
- Size of drawdowns in trading capital.
- If they ever blew up accounts.
- Personal wealth built through trading.
The richest and best traders in the world aren’t trading their own accounts to pay the weekly grocery bill and monthly rent they are managing billions of dollars to grow their clients capital over the long term. Most also trade huge positions for longer periods of time. Few day trade but a few firms use high frequency trading programs for intra-day trading and scalping.
The best traders in the world are under pressure not only to make money every month but also must keep their clients satisfied with their performance so they don’t remove their individual funds. These top traders no only have to beat the market returns but trade in markets with enough liquidity to execute their trade size with minimal slippage if they phase in and out of positions.
These traders are in the major leagues of the markets and are rewarded for it. Maximum pressure, big trading size, and clients that demand results monthly and yearly. These traders are also entrepreneurs as they run firms and manage employees, a full time job in itself in addition to trading.
It would make sense that the best traders in the world are also the richest as they would have been rewarded for all the above parameters and their wealth is like a scorecard for their success.
With these metrics in mind the best traders in the world are possibly the following.
- Jim Simons has a $21.6 billion current net worth. He founded Renaissance Technologies that runs the Medallion Fund the most successful quant fund in history, it runs a $10 billion black-box trading strategy and now only manages capital for Renaissance’s owners and employees. It had to return customers capital due to the rapid growth in the assets under management due to compounded growth it could not continue to scale its systems due to market liquidity concerns.
- Ray Dalio has an $18.0 billion current net worth. He is the founder of Bridgewater Associates, the world’s largest hedge fund firm, it manages $160 billion.
- Carl Icahn has a $14.3 billion current net worth. His primary investing vehicle is Icahn Enterprises ticker symbol “IEP”. He also manages his own investment fund consisting of his own money and Icahn Enterprises funds.
- Steve Cohen has a $14 billion current net worth. He ran SAC Capital, another one of the most successful hedge funds of all time. He had to close SAC Capital after the fund plead guilty to insider trading. Cohen was fined $1.8 billion in penalties. His fund Point72 opened back up to outside investor money in 2018 after his SEC two-year supervisory bar expired.
- Ken Griffin has a $12.8 billion current net worth. Founded and manages Citadel, the legendary hedge fund that has $30 billion in assets under management. He also founded Citadel Securities, Wall Street’s largest market-making firms, which executes one in five stock trades in the U.S.
- David Tepper has a $12.7 billion current net worth. He was one of the best hedge fund managers of his generation. He is the founder and president of Appaloosa Management, a global hedge fund based in Florida.
- George Soros has a $8.3 billion current net worth. He managed the Quantum Fund, the most successful hedge fund in history generating over $40 billion in profits and produced approximately 20% per year compound returns before returning their capital and closing it to outside investors.
These are currently the richest seven traders in the world and it is highly probable that they are the best traders in the world.