Steven Cohen and then also Matt Grossman, who was the one that ran Intrinsic.” Root notes that both Steve and Matt would trade the book. “You’d see your position, and there would be two balances. There would be what Matt bought and what Steve bought. And Steve’s would move around, because he’d be trading in and out of it. And they were both curious at the end of the year which would do better. Because Matt would just kind of hold your position, and Steve would try to use his own prowess to go in and out of names. “Steve’s returns were almost always higher.” Root credits Cohen with learning how to trade. “To be clear, I still believe that you make your most money by finding great companies and owning them for the long term. But Steve showed me that you can improve returns by being more tactical and strategic... especially if you understand
THEWORLD’S HIGHEST- RETURNING HEDGE FUND
SAC Capital – named for its founder Steven A. Cohen’s initials – was the highest-flying hedge fund in the world. As Vanity Fair put it in 2010 in only the second interview Cohen had given up to that point... After 20 years trading stocks in obscurity, Cohen burst onto Wall Street’s radar at the end of the 1990s, when at the height of the technology-stock bubble, in 1998 and 1999, he and his firm, SAC Capital, managed to post jaw-dropping 70% annual returns. But Cohen’s legend was truly cemented the following year, in 2000, when he bet against tech stocks before they began to dive, leading to yet another 70% return. The reclusive Cohen built SAC Capital from $25 million to more than $16 billion... and at its peak, it made up as much as 3% of the total trading on the New York Stock Exchange.
“ aʼØʃ,Ü㫼¼¼«ó that you make your most ÂÊÃúúăëâ¢Øã companies and owning them for the long term. But Steve [Cohen] showed me that you can improve ØãèØÃÜú«Ã¢ÂÊØ tactical and strategic...
market sentiment and what factors will really move stock prices in the short term.” Root notes that the firm had a big investment in Xerox while he was there. “I doubted the long-term quality of the company, and frankly I think Steve did too. But our thesis was that profits could be greatly improved by cutting
Inside SAC Capital, Root worked at CR Intrinsic Investors – the fundamental investing group – directly with Cohen. “We were focused on actually finding great companies and owning them for the long- term. And the way it worked is, if I found an idea that I liked, I would pitch it to both
American Consequences
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