Bruce Kovner: Billionaire Taxi Driver
Maxing out the Mastercard on his first ever trade...
Good morning, everyone.
This week’s newsletter includes: the most unlikely Wall Street story you’ll hear all year, and how Ray Dalio went from golf caddy to master of the universe.
How to Understand Risk Like A Pro
Bruce Kovner went from struggling New York taxi driver to legendary billionaire investor. Here’s how he did it, including a $3,000 credit card gamble on one trade…
In the late 1970s, Bruce Kovner was struggling.
He attended Harvard on a scholarship, but dropped out. He failed as a political campaigner, then failed as a writer. By his late 20s, Bruce had given up on a career and was driving a cab in New York City, barely scraping by.
However, he had an unusual obsession - reading about commodity trading.
Bruce wanted in, but he had no money to invest. So in 1977, he did something extreme: he maxed out his MasterCard and put all $3,000 into soybean futures.
At first, the trade exploded.
His investment soared to $45,000 and Bruce thought he had made it - until the market turned.
In just 30 minutes, half his profits vanished.
If he continued losing money so fast, he wouldn’t just be broke, he’d be drowning in debt.
Shaken, he closed the trade at $23,000. The stress made him physically ill:
“I was sick for a week. But it was the best thing that happened to me - it taught me risk.”
Most rookie traders blew up their accounts, but Bruce continued to trade and grow his personal account, demonstrating skill and discipline.
His unorthodox success caught the eye of Michael Marcus - a rising star at Commodities Corporation.
With no professional experience and no qualifications, Michael gave Bruce a shot and hired him as a junior desk assistant. Bruce made an instant impact, posting annual returns of nearly 80%. The thousands of hours reading about commodities were finally bearing fruit.
In 1983, he branched out on his own and founded Caxton Associates - who went on to become one of the most successful hedge funds in history. By the time he retired in 2011, Bruce had amassed a $5 billion fortune.
Now aged 80, Bruce reflects on his unbelievable career path:
“You have to be willing to make mistakes regularly, there is nothing wrong with it…if you apply yourself, great things can happen.”
Recommendation’s
Bruce gave a speech in 2003 to celebrate Caxton Associates 20th anniversary. A longer read at around 12 minutes, but well worth it. Click here to access.
I created a second YouTube video called The History of Ray Dalio, including his childhood, his big break, who funded him and the market call that changed his entire career trajectory. If you’re a fan of Ray or want to know more about him, check it out - and let me know what you think!
The History of Ray Dalio
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Joseph Cass