Paul Tudor Jones: Every Day I Assume Every Position I Have Is Wrong
PTJ is one of the all-time hedge fund greats and in this post I have accumulated some of his most valuable insights
Paul Tudor Jones, the legendary hedge fund manager and founder of Tudor Investment Corporation, is known for his sharp insights into trading, risk management, and macroeconomic investing.
I enjoyed listening to one of his recent interviews on Bloomberg (at end of article) and was reminded of how he thinks and sees the world/financial markets.
Here are some of his most famous and widely quoted remarks:
🧠 On Trading Philosophy & Risk Management:
"The secret to being successful from a trading perspective is to have an indefatigable and undying and unquenchable thirst for information and knowledge."
"Don't focus on making money; focus on protecting what you have."
"Where you want to be is always in control, never wishing, always trading, and always, first and foremost protecting your butt."
“While I spend a significant amount of my time on analytics and collecting fundamental information, at the end of the day, I am a slave to the tape and proud of it.”
“One principle for sure would be: get out of anything that falls below the 200-day moving average.”
“We learned just to go with the chart. Why work when Mr. Market can do it for you?”
“While I spend a significant amount of my time on analytics and collecting fundamental information, at the end of the day, I am a slave to the tape and proud of it.”
"Losers average losers."
📉 On Market Timing and Discipline:
"You adapt, evolve, compete or die."
"That was when I first decided I had to learn discipline and money management. It was the most important lesson I ever learned."
"You always want to be with whatever the predominant trend is."
“I believe the very best money is made at the market turns. Everyone says you get killed trying to pick tops and bottoms and you make all your money by playing the trend in the middle. Well for twelve years I have been missing the meat in the middle but I have made a lot of money at tops and bottoms.”
"Every day I assume every position I have is wrong."
💡 On Macroeconomics & Opportunity:
14. "The whole world is simply nothing more than a flow chart for capital."
"Intellectual capital will always trump financial capital."
“I love trading macro. If trading is like chess, then macro is like three-dimensional chess. It is just hard to find a great macro trader. When trading macro, you never have a complete information set or information edge the way analysts can have when trading individual securities. It’s a hell of a lot easier to get an information edge on one stock than it is on the S&P 500. When it comes to trading macro, you cannot rely solely on fundamentals; you have to be a tape reader, which is something of a lost art form. The inability to read a tape and spot trends is also why so many in the relative-value space who rely solely on fundamentals have been annihilated in the past decade. Markets have consistently experienced “100-year events” every five years.”
In his latest appearance on Bloomberg, PTJ delivered some great insights on the next Fed Chair, the US Treasury Yield Curve, AI, and the US dollar:
On the next Fed Chair & financial repression:
“I also think, again, the playbook is pretty clear historically and right now where we are fiscally constrained, we're in a debt trap. You're going to have to run negative real rates to get out of it. That's what we did in the ‘50s. We had, if you'll remember, we had a variety of prices fixed by the Treasury while we had 5-6% inflation for a period of time. We're going to have negative real rates. And that's that's why you have to think about what is facing our policymakers in this debt trap as you construct your portfolio.”
On the best portfolio to fight inflation:
“…some combination of gold, vol adjusted, Bitcoin, gold, stocks. That's probably your best portfolio to fight inflation, vol adjusted, because the vol (volatility) of Bitcoin is obviously 5x that of gold. So you're going to you're going to do it in different ways.”
On the direction of interest rates:
“We know 12 months from now, rates are going to drop precipitously with a new Fed chair…. was it last week when Donald Trump said after the ADP number that he wants a steep drop in rates, 100 basis points?…. that’s a tail wind for the bond market.”
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