Steven Cohen: how a card player became a financier
In many ways, our success depends on a simple chance or an opportunity that appears
once in a lifetime, and, as a rule, at such a moment you have to risk almost everything and possibly your future.
The success story of Steven Cohen successfully shows us how an ordinary student, having put his future career on the line, simply amazed the whole world with his success and, for a time, eclipsed George Soros himself and his foundation.
Stephen Cohen was born and raised in an ordinary middle-class family, where his father was a clothing manufacturer and his mother worked as an ordinary music teacher and taught piano lessons.
Born and raised in Great Neck, New York, the future millionaire grew up in a large family, so from a very young age he clearly understood the need to focus on a specific task to achieve success.
From the moment Stephen started studying at school, he had two talents: he was a very good and successful student and at the same time an avid gambler who simply had no equal in the class.
After graduating from high school, the young man decided to pursue higher education, and since he was particularly interested in economics, he decided to enroll at the University of Pennsylvania. An avid gambler, he spent his leisure time actively playing poker, but due to his penchant for gambling, he gradually became fascinated with the stock market.
The beginning of a passion for stock trading.
The Gruntal brokerage firm's office was right next door, so in his free time, he actively monitored quotes and price movements. As you can imagine, the training was fee-based, but instead of paying for another semester at university, Steven Cohen took a thousand dollars and opened his first account with Gruntal.
One could only imagine his parents' reaction, but it was this very step that completely turned Cohen's world upside down and became a great boost to his goal of becoming a millionaire. It was by putting his future on the line that fate turned around for him.
Surprisingly, his first ill-considered investment yielded excellent profits, and the active and successful student was noticed by the same brokerage firm, Gruntal, which offered him a job in 1978. Naturally, the future trader jumped at the chance.
Just imagine: on his first day on the job, Cohen managed to earn $8,000 for his employer. Seeing his significant success, management began to trust the young trader more and more and provided him with more capital.
The company's profitability began to grow so rapidly that Stephen began bringing in $100,000 a day for his company, thus offsetting the losses of many other traders. After just six years, he was entrusted with managing his own investment portfolio, which totaled $75 million.
In 1992, the now-experienced and seasoned trader decided to leave Gruntal and open his own hedge fund, with capital at that time amounting to $20 million. Because Cohen valued his work, he charged a very high management fee, so despite his fame, he only managed to raise $13 million in investor funds.
However, within a year, he doubled his capital, and by 1995, SAC's assets had grown by 400 percent. The staggering growth in profits and the influx of investor money forced Steven Cohen to open new branches and further develop his business.
Steven Cohen's Trading Strategy
Steven Cohen is the complete opposite of an investor like Warren Buffett. He was a complete proponent of short-term trading, and, as his colleagues noted, he sometimes managed to make up to 300 trades a day, without delving into any economic details.
In order to select undervalued or overvalued assets, he developed a special program that allowed it to do most of the routine work for him.
By the way, the financier claimed that his fund was disliked only because it did not invest, but traded.
At this point, if you add up all the assets across the various funds managed by Steven Cohen's associates, the total capital amounts to $1.2 trillion. According to various sources, his funds account for 2 percent of stock market trades.
