Obviously, Steve Cohen is a legend.
You’ve probably heard the story about how Cohen made $8,000 on his first day as a trader at Gruntal & Co, but here’s what makes it even more impressive.
In a recent interview with Paul Tudor Jones (another legend), Cohen described his first days of working on the arbitrage desk at Gruntal. So he wasn’t even really a trader. His job was to hedge the firm’s trades, and he didn’t really like it.
Dealbook describes Cohen’s account of how he transitioned from arbitrage to trading:
But he found himself quickly bored of hedging stocks because he would see the firm selling a position up 20 cents — when if he had only held on it would have gone up a dollar.
So Cohen got bored, Gruntal let him move to trading, and he started making seven figures in his twenties — in the 1980s. And, that was only 60% of his profits. Gruntal kept the other 40%.
In his twenties, Mr. Cohen said he had gotten his own “pad” at was earning “seven figures” at Gruntal. The firm paid him 60 per cent of the profits he earned for the firm — “pretty generous” terms, he said — but he eventually wanted more money to manage so he took a pay cut and started SAC.
It’s things like that that make kids in college think they can drop out and trade for a living.