Monday, September 2, 2013

Trader: The Documentary - and Paul Tudor Jones

In 1987 the legendary hedge fund manager, Paul Tudor Jones, starred in an hour long documentary for PBS TV in the United States. The movie was made in late 1986 and aired in mid 1987. Jones is filmed saying:

“…yes there will be some type of a decline, without a question, in the next ten to twenty months and it will be earth shaking, it will be sabre rattling, and it will have Wall Street in a tizzy, and it will create headlines that will dwarf anything that has happened up to this point in time”.

In October of the same year stock markets, and therefore the Index Futures markets, went through one of the most traumatic falls that had been experienced since the infamous 1929 crash.

Thereafter we are treated to an excitable Paul Tudor Jones, a thoughtful Paul Tudor Jones, a mirthful Paul Tudor Jones and even a smug Paul Tudor Jones. While there are very few scenes in the movie that could be used as a basis for trading insights (they seem to have been using Elliot Wave Theory at the time), it is very interesting to be able to see the background to the activity that preceded the electronic trading that we experience today.

In 1987 the Internet had not yet been invented. The IBM PC, which can be seen often in the background in the documentary, had been developed only a short few years earlier. A hard disk was regarded as something that was at the cutting edge of technology. How quaint to see PTJ’s main lieutenant, Peter Borish, laboriously creating a graph using a pen plotter. Mind you, this graph is supposed to be a correlation of the recent (up to 1987) market with one from the late 1800s to the early 1900s. For this writer, there is something very odd about this particular sequence. Nothing, but nothing, is that closely correlated in real-life.

Borish himself has now left Tudor Jones and is running his own, very successful, fund. A 1998 Futures Magazine article on him says:

“…the key to Borish’s success is his understanding of money management, which he incorporate(s) into the systems to make them hugely profitable.”

As anyone who is familiar with our methods here at OmicronFX will know already, we say amen to that.

Paul Tudor Jones is supposed to have disliked the documentary so much that he bought up all copies of it when it appeared on VHS (remember that video standard?) and motivated the director, Michael Glyn, to claim copyright to it in order to prevent it from being uploaded to YouTube or any other video sharing site. That remains the situation to this day, so that it has come to have something of a rarity value.

This writer was lucky enough to acquire an .avi version of the movie some time ago that currently sits on my hard disk, and which I can watch whenever the fancy takes me.

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