Paul Tudor Jones II is founder, Co-Chairman, Chief Investment Officer and the controlling principal of Tudor Investment Corporation which he formed in 1980. Tudor is part of the Tudor Group, a group of affiliated companies engaged in trading in the fixed income, equity, currency and commodity markets. Tudor manages approximately $13.6 billion and has offices in the US, UK, Singapore and Australia. Paul is a portfolio manager focusing on discretionary macro trading and is a principal risk-taker for the firm’s flagship fund, The Tudor BVI Global Portfolio L.P., and the sole risk-taker for Tudor Futures Fund.
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Paul Tudor Jones spoke at the IRA Sohn Investment Conference, also see Global Macro Kings, Tudor, Citrone And Fortress Fall In 2014. Below are notes from his presentation.
Highlights from Paul Tudor Jones’s presentation
Paul Tudor Jones RARELY speaks although he is a big philanthropist so that is likely why he is speaking at the Sohn Conference.
4:21 PM EST Paul Tudor Jones’ presentation for the Ira Sohn Conference;is entitled “Manic depressive trading in a volatility-compressed world.”
“Macro trading is about as difficult as I’ve ever seen it in my career,” says Paul Tudor Jones, quoting the late Jimmy Hendrix.
Paul Tudor Jones at comparing it to “make-up sex – you got to finish to make up.”
What is the cause? Paul Tudor Jones says that central banks are the cause for this manic depression in markets.
4:25 Paul Tudor Jones Jones, who has had gaffes himself (including his comments about women being bad traders because of motherhood), just said his presentations are “about as boring as a Joe Biden speech”
Continuing with his slightly strange humor, Paul Tudor Jones is now discussing the need for “central bank Viagra.”
Now on to some economics, Paul Tudor Jones says that “realized volatility in G7 equity, forex markets are all at multi-decade lows”
In FX, Jones notes that 2013 ended with the tightest spread since inception of the euro. He asks If you actually knew when the federal Reserve was going to hike interest rates, what would you do in response?
With FI, Paul Tudor Jones suggests investors Wait until you see the whites of the eyes.
4:32 Continuing with macro, Jones says members in the audience were not born when the Bank Of Japan last hiked interest rates.
Jones notes that the first implied rate hike not until the middle of next year for the middle 2015, and mid 2016 for Europe. He suggests investors not short bonds until three months or so before each event. No interest rate volatility, likely means that there is no foreign exchange volatility.
Friday last weeks was one of the greatest days that Paul Tudor Jones can remember in macro trading as economic data (jobs numbers) were very strong , yet bonds closed up. He asks how can anyone possibly think/predict that bonds would close up on that day? This just goes to show that what’s obvious in macro is usually wrong.
4:37: Jones says that while “fundamentals will show you one hand, and in reality there are two hands.” Therefore, Jones started a flow of funds group
He says nothing that nothing happened in fixed income in first 7 months to this year,but investors will start to see changes in bonds when taper starts to end.
Paul Tudor Jones says UK bonds are probably a ‘decent sale’ sometime in late summer.