Steve Cohen and Paul Tudor Jones had a fireside chat at the two-day ISI conference at the Waldorf Astoria today.
PTJ interviewed; Cohen responded.
They covered a lot of ground — stock picks, the 90s, Greenmountain, back pain… In fact, pretty much everything except the recent hot water in which Cohen’s hedge fund finds itself because of insider trading-gate, Dealbook reports.
Not that that’s surprising, but nonetheless, we’re sure the same thought popped into the heads of everyone who managed to score a seat.
Jones, channelling Charlie Rose (his call, not ours), asked Cohen what the biggest mistakes he ever made were. There are two. And one is worse because of the night that followed it.
The first was his October 2008 Volkswagen short, in which he lost $250 million in one week.
The second was his long position in Tenet Healthcare in 2002. According to Dealbook, Cohen, “described the stock drop in Tenet due to a scandal as one of the worst days of his life.”
Now, he lost $75 million on that bet, which is far less than the Volkswagen nosedive. But that’s not what was so bad…
Cohen said it got worse when he came home that night and his wife was orchestrating their Christmas card photograph and made him dress up as the King of Clubs. Sure enough, the picture eventually showed up on the Wall Street blog, Dealbreaker.
Five other things we learned:
- Always be charting: “Any time I get into a position I’ll look at the chart first. I always default to the chart. It is critical for entry points.”
- His top stock picks: Williams Companies, Plains Exploration and Green Mountain Coffee Roasters
- Three deadly words: “Leverage, concentration and illiquidity are the three things that can kill you.”
- Diversification-smersification: “A shoemaker makes shoes. You have to stick with what you’re good at.”
- Devote most of your time to the losers: “I spend most the day watching my losers because if those are being managed correctly the winners take care of themselves.”
Business Insider Emails & Alerts
Site highlights each day to your inbox.