From the January 01, 2012 issue of Futures Magazine • Subscribe!

Thomas: Parlaying experience into ‘mad’ success

Trader Profile


Photography by Chris Ayers Photo

Retirement takes on a different shape for John Thomas, also known as The Mad Hedge Fund Trader, who now uses that moniker for a web site, daily newsletter and premium-priced trade alert service while also trading his own account.

In his previous 40-year career Thomas has worked as Tokyo correspondent for The Economist magazine and the Financial Times, built and headed Morgan Stanley’s international equity division, run his own hedge fund to a 1,000% return and focused on his own investments and commodities, including oil and gas development in the Barnett Shale of Texas.

He learned to trade, starting with stocks, while working for a brokerage firm on the Tokyo Stock Exchange floor after graduating from college in California. After that he went into Eurobond trading as currency trading was just getting started in the 1970s. "We basically would trade Deutsche mark, yen, Swiss francs and sterling bonds against each other," he says.

The move into journalism with The Economist followed the market crash after the 1973 oil crisis as business dried up. "So I became a journalist just to pay the bills," Thomas says. After he wrote a book in 1980 predicting that the yen would go from 300 to 100, the Nikkei would rise "astronomically" and that the Japanese government bond market and banks would become the world’s largest he was recruited by Morgan Stanley.

"I started out as the low man on the totem pole in the equities division, the first international hire, and I actually built the staff up from one to 200," he says. "We were accounting for 80% of equity division profits."

Trading in the international arena was just getting started and was very simple, mostly involving arbitrage between American depositary receipts and European listed stocks. Following the run up of gold from $32 to $900 a decade earlier most of the international stocks that were active were gold mines.

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