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Billionaire Paul Tudor Jones and Insiders Love These 11 Stocks
Ramish Cheema
8 min read

In This Article:

In this piece, we will take a look at the stocks that billionaire Paul Tudor Jones and insiders love. If you want to skip our introduction to Paul Tudor Jones and his hedge fund, then take a look at Billionaire Paul Tudor Jones and Insiders Love These Stocks: Top 5 Stocks.

Paul Tudor Jones is one of the most successful hedge fund bosses in the industry. According to Forbes Magazine, he was worth $8.1 billion as of November 2023, making him one of the richest people in the world. The investor started his journey in the finance industry in 1976 after graduating from the University of Virginia with a bachelor's degree in economics. Mr. Tudor's finance career would start in the commodities market, as he would work as a cotton broker. He would spend more than a decade in this field before finally taking the plunge and setting up Tudor Investment Corporation in 1980.

When it comes to making headlines, the first half of Mr. Tudor's investment career is more impressive. This is because he is known as a trend player, or an investor who senses the direction in which financial market winds are blowing and then adjusts his sails accordingly. Seven years after setting up Tudor Investment, Paul Tudor would sense an opportunity before the notorious Black Monday stock market crash of 1987. This crash came after years of bull runs on the stock market that created uncertainty about stocks being overvalued. Investors then started to submit sell orders to exchanges in bulk, and when all of these were executed, the market dropped. Mr. Tudor and his firm anticipated this, and according to some estimates, ended up booking a whopping $100 million in profits. This wouldn't be the hedge fund's last hurrah.

A couple of years later Mr. Tudor's knack of sniffing potential overvaluations would return at the precipice of Japan's lost economic decade. This era came after Japan's post war economic boom, which was aided by lax monetary policies that incentivized corporate borrowing and spending to spur economic growth. While this is a good thing for its own sake, its negative consequences came when Japanese asset valuations swelled due to easy access to capital. Sensing impending doom, Japanese authorities started to make changes, that caused the stock market to crash and allowed Mr. Tudor to profit. Back then, as the flagship Japanese Nikkei 225 index dropped by 43% in a single year, Mr. Tudor's fund would go on to post 87% in returns for the year.

If you're an avid student of U.S. stock market history and are reading this, then you might know where we're heading next. One of the biggest eras of overvaluation in America was during the time of the dot com bubble. Back then, the Internet was making its way to consumers for the first time, and personal computers were starting to become common. The potential of the Internet to disrupt industries caused ordinary people and seasoned hedge funds to pile into stocks, and most of the time, without the proper due diligence in a classic example of the fear of missing out. Naturally, valuations became overstretched, and when they came tumbling down, Mr. Tudor profited just like he had during Black Monday and the Japanese asset price crash.

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