The stock market is an unusual beast.
The size of it, the stories that have come out of it, the different markets that exist inside of it. For the uninitiated, it all just appears to be indecipherable numbers and graphs, but most long term traders have a story or two, and these onlookers soon get interested when people start making huge profits.
But sometimes, things happen that stupify even the most experienced stock traders.
Sometimes, the markets behave in ways that completely blow the minds of even the most tuned in investors and financial professionals.
Here we’ve assembled some stock trading statistics, facts and stories that are so crazy, you’d never believe them if you heard them anywhere else.
Let’s take a look, starting with some world firsts and world records that just go to show no matter how unexpected or unlikely something might seem to you or me, there is always somebody willing to take a chance:
World Records/World Firsts
Dan Zanger Gains 29,000% Over A Single Year
The world record for single year stock market portfolio appreciation belongs to Dan Zanger, who managed to gain over 29,000%.
In 1997, on seeing the huge growth of the Internet bubble, Dan sold his Porsche for $11,000. Within the next year, Dan managed to turn this 11k into 18 million dollars, earning his place in the record books at the same time!
Dan remains a highly regarded trader and manages chartpattern.com where he posts regular insights and trading tips.
Most Successful Systemic/Algorithmic Trader – Ed Seykota Turns $5,000 into $15,000,000 in a Client Account
Ed Seykota is a commodities trader who is believed to be the leading pioneer of Systems trading or Algorithmic trading thanks to his early successes in using punch card computers to follow trends.
He coined this early electronic trading system, simply calling it “Trading System” and went on to become known as one of the best traders of all time after turning £5,000 into $15,000,000 in a client’s account over a 12-year period.
Julian Robertson Loses $17 Billion in One of the Biggest Trading Mistakes Ever
Julian Robertson was previously one of the most successful investors of all time, with his hedge fund Tiger Management turning an investment of $8 million into $7.2 billion between 1980 and 1996.
Robertson’s big mistake came when he didn’t believe in the tech bubble, not participating in it at all. He instead tried to short multiple tech stocks, believing they didn’t show real long-term promise.
When they continued to soar, it hurt Robertson bad, with Tiger Management closing at $6 billion in 2000, compared to $23 billion in 1998.
Biggest & Most Noteworthy Single Trades
Jesse Livermore Pioneers Shorting the Market, Earning $100,000,000 in 1929
Jesse Livermore was one of the earliest traders to short the market, with his first attempt in 1906 paying out $250,000.
However, Jesse kept trying, always keeping his eyes out for his next opportunity, and with his gains growing each and every time he attempted a short. He gained a positive reputation as a successful trader, earning $3 million by shorting the wheat industry in 1925.
In 1929, Livermore cemented himself in trading history by gambling on his biggest short yet, shorting the entire market and earning $100 million in the process.
Even today, this is no amount to shake a stick at, but in today’s market Livermore’s payout works out closer to $1.4 billion.
Unfortunately, Livermore lost all his money somehow and was declared bankrupt in 1934, so he never continued his groundbreaking trading career, but regardless, he went down in history as one of the earliest successful shorters.
David Tepper Bets on Banks When Nobody Else Will – & Gains $7 Billion For His Troubles
Back in 2009 when the financial crisis had smashed some of the biggest banks and financial institutions in the world, trust in the banks was at an all-time low, several had already closed, and people were worried about the banks being nationalised.
Too busy worrying about the current situation to see promise in the future, almost nobody was willing to bet on the heavily depressed bank stocks.
Tepper, however, studied the government’s Financial Stability Plan which aimed to help protect the banks. Finding himself convinced that things would turn around successfully and that the banks would rebound, Tepper purchased low-cost common stocks of all of the major banks in huge quantities.
Throughout 2009 he saw the value of some of these stocks and commercial mortgage securities quadruple, with Tepper’s hedge fund returning 132.7% for the year, with an unbelievable profit of $7 billion.
Kyle Bass Benefits from the Big Short to the Tune of $4 Billion
While the movie industry would have you believe that Michael Burry, Steve Eisman and a few others were the first to spot the earliest signs of the 2008 financial crisis, Kyle Bass was the real winner.
Starting his own firm in only 2006 with $33 million, Bass says he was inspired to essentially bet against the global financial system due to a conversation with a New York investment banker that encouraged him to hire his own private investigation team to discover Residential Mortgage-Backed Securities had the highest risk of default.
Emboldened by the results, Bass purchased large numbers of CDSs and even brought additional investors on board, resulting in a profit of just under $4 billion.
Louis Bacon Returns 86% Betting on Saddam Hussein
In 1989, Louis Bacon was already a successful trader with a large win under his belt, but his greatest victory hadn’t occurred yet.
Bacon was unique amongst his fellow students at Columbia Business School because he actually had some experience, trading with borrowed money during his time at the School and often losing.
The experience was clearly a benefit though because his luck soon changed after graduation, as he set up his own business and began to make some successful trades.
In 1990, taking note of the increasing tensions between Iraq and Kuwait, Louis thought a little outside of the box compared to others at the time, and decided to start trading in macro investments, going long on oil and short on stocks.
We’re sure you can guess the rest – Iraq invaded Kuwait, and Louis’s profits exploded.
His company started 1990 with around $100 million and managed to return an insane 86% on that year alone, thanks to one of the greatest stock trades in history.
Bacon’s ability to read the markets through knowledge of the world around him hasn’t diminished, with his annual returns remaining between 25 and 35% for the last decade.
JPMorgan Chase Experiences the Biggest Loss Ever in 2012
In 2012, JPMorgan Chase experienced the biggest trading loss of all time (outside of Bernie Madoff’s Ponzi scheme) when it’s London branch entered a series of transactions involving credit default swaps, and a trader by the name of Bruno Iksil accumulated outsized CDS positions.
The end result was a loss of 9 billion USD, with $6.2 billion of that loss coming from 3 positions that had slightly offset each other.
As a result of this massive trading loss, the Chief Executive of JPMorgan Chase had his salary cut in half, and the bank agreed to pay $920 million in fines.
Andy Krieger Shorts the New Zealand Dollar in 1987
Andy Krieger, a trader working for the Banker’s Trust, was always known as an aggressive trader, earning him trust and respect to the point that he was allowed to trade with a $700 million limit compared to $50 million for most of his colleagues.
In the aftermath of Black Monday, Krieger began watching the currencies that were rapidly rallying against the dollar and noticed that the New Zealand Dollar was being overvalued by a considerable amount.
In response, Krieger used Options to short the NZD by hundreds of millions of dollars. It has been claimed that the short was so large that for a time, Krieger had control of more of the NZD than were in circulation in New Zealand.
As other traders started to follow the short, the New Zealand Dollar decreased by 5%, enough to give Krieger (or the Banker’s Trust) a profit of $300,000,000 – a sum of which Krieger himself only received a comparatively paltry $3 million.
One of the Biggest Trading Mistakes Ever Was Caused by The New Guy Entering Two Numbers the Wrong Way Around
In 2005, a new employee and inexperienced stock trader working for a Japanese bank attempted to sell a single share of stock in J-Com (Jupiter Telecommunications) for ¥640,000.
Getting the quantity and price fields confused, the trader instead sold 640,000 shares for a single yen each – the equivalent of earning only $5,000 from a sale of stocks worth $3 billion.
Now you know about some of the biggest trades of all time, but there are some even more surprising statistics and stories from around the world of stock investment:
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Surprising Stock Market Statistics & Stories
- In 2014, a penny stock called Nestor grew by 1900%, fueled by confused traders mixing it up with Nest, a company Google had recently purchased
- Apple’s stock hit a 12 year low in 1997, in part due to a single anonymous sale of 1.5 million shares. CEO Gil Amelio was ousted by directors and Steve Jobs became CEO soon after. Jobs was later revealed to have been the anonymous seller.
- The worst year of the stock market was 1931 during the Great Depression, with an overall loss of 47%
- The best year of the stock market was 1933 rebounding from the Great Depression with a gain of 46.59%.
- In another story from 2014 (it was a crazy year!) the collective panic around Ebola led to a US hazmat suit company known as Lakeland Industries gaining by 60% in a single day
- The exchanges in the United States (NASDAQ & the NYSE) take up 39% of the global stock market value, worth more than the next 7 exchanges combined (Source)
- Since 1916, the Dow is up 25,568%, despite only reaching new all-time-highs on 5% of days
- Regarding the difference between commodities and cash flows, in 1980 both Gold and Dow were at $800. Now, Gold is $1300 and the Dow is $26,000.
- Over 93% of the global stock value is divided between only 3 continents (North American, Europe & Asia)
- A penny stock trader in his early 20s known as Tim Grittani managed to beat the risky odds of penny stock trading between 2010 and 2013, turning his $1,500 life savings into over $1 million in under 3 years.
Ronald Wayne, alongside Steve Wozniak and Steve Jobs, was one of 3 Apple cofounders. However, he sold his 10% share in the company for $800 in 1976. Today, that 10% would be worth over $40 billion.
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