Bill Ackman turned a $27 million bet into $2.6 billion in a genius investment. Here are 12 of the best trades of all time.

Bill Ackman
Bill Ackman.
  • The hedge fund billionaire Bill Ackman is among few who minted a multibillion-dollar profit during the throes of the coronavirus pandemic. 
  • The famed investor turned a relatively modest $27 million bet into a whopping $2.6 billion windfall as the outbreak continued to drag on stocks and threatened deep economic recession.
  • From George Soros' breaking of the Bank of England in 1992, to Michael Burry's now world-famous Big Short during the financial crisis, Markets Insider decided to round up some of the best trades of all time. 
  • Visit Business Insider's homepage for more stories.

Pershing Square Capital's CEO Bill Ackman made headlines after making $2.6 billion for his hedge fund off a wise, yet controversial bet that the coronavirus would crash the stock market. 

With stock markets going into free-fall during the economic downturn, Ackman was one among a handful who landed massive profits by using credit protection on investment-grade and high-yield bond indexes.

Ackman's was the latest in a long line of renowned risky but wildly successful bets on the markets.

From George Soros' breaking of the Bank of England in 1992, to Michael Burry's now world-famous Big Short during the financial crisis, Markets Insider decided to round up some of the best trades of all time. 

Check them out below.

Read more: 'We have a depression on our hands': The CIO of a bearish $150 million fund says the market will grind to new lows after the current bounce is over - and warns 'a lot more pain' is still to come

Bill Ackman turned $27 million into $2.6 billion during the coronavirus pandemic
bill ackman
Bill Ackman, chief executive officer and portfolio manager at Pershing Square Capital Management, speaks during the SALT conference in Las Vegas, Nevada, U.S. May 18, 2017.

Ackman, the billionaire hedge-fund manager, had an intuition that the coronavirus-driven market meltdown would have a greater impact than investors expected.

That led him to mint a multibillion-dollar profit in March 2020, turning a $27 million position into a $2.6 billion windfall through defensive hedge bets as the coronavirus outbreak threatened a deep economic recession.

Ackman's bet that the debt bubble would burst was based on a hunch that investors would cast aside riskier securities in bond indexes as the coronavirus spread across the world.

The trade was so good that one columnist said it "may be the single best trade of all time."

Read more: Buy these 13 tech stocks that are abnormally disconnected from Wall Street's expectations for profit growth and poised to rocket higher, Credit Suisse says

Michael Burry's 'Big Short'
Michael Burry

Possibly the most iconic trading victory of all time, Michael Burry's fund Scion Capital built up huge short positions against the US sub-prime mortgage market starting in 2004.

When the market collapsed during the financial crisis in 2007 and 2008, Burry netted a $100 million profit for himself, and $725 million for other investors.

His successes became the subject of Michael Lewis' seminal book about the crisis "The Big Short," and then a film of the same name.

Source: Vanity Fair

David Tepper's $7 billion win during the depths of the financial crisis
David Tepper

In 2009, American billionaire David Tepper bought large quantities of distressed bank assets.

The huge investments he made in Bank of America and other burdened companies netted his hedge fund an enormous $7 billion.

Source: Wall Street Journal

Read more: BANK OF AMERICA: Investors should buy these 12 cheap stocks to bet on the coming US recovery — but they should steer clear of these 8 competitors

'Evil Knievil' Simon Cawkwell's ingenious shorts against Northern Rock
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Simon Caukwell

In 2007, British spread-better Simon Cawkwell predicted the demise of the bank Northern Rock and made a neat profit of over £1 million ($1.2 million) by short-selling its shares. 

Source: Financial Times

Kyle Bass' $4 billion win on the US housing market collapse
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Kyle Bass

In 2007, famed investor Kyle Bass and his hedge fund made a $4 billion profit by buying credit default swaps after the housing market crashed due to the ongoing US recession. 

Source: D Magazine

Read more: A real-estate investor who generates $342,000 of annual cash flow shares his unique spin on a popular investment strategy that's helped land him 114 units

Andrew Hall's $100 million profit on $100 oil futures
andrew hall

In 2003, oil trader Andrew Hall bought cheap long-dated oil futures that would pay off if the price reached $100 at some point over the next 5 years.

By 2008, oil reached $100 and Hall acquired $100 million for his employer Phibro, and a mammoth paycheck for himself.

Source: Time

Neil Woodford's unconventional bets in tobacco stocks
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Neil Woodford

In 2000, British fund manager Neil Woodford invested generously in tobacco stocks which were being shunned before the dotcom bubble burst.

By 2014, his flagship equity fund received annual returns of more than 20% from British American Tobacco (BAT).

Source: Financial Times

Read more: BTIG says to buy these 25 under-the-radar stocks that have been neglected for years because they're tempting M&A targets with big upside

George Soros: 'The Man who Broke the Bank of England'
George Soros
Chairman of Soros foundation George Soros attends the Avoided Deforestation Partners' organization conference on the sidelines of U.N. climate talks in Cancun December 8, 2010. The world's governments struggled on Wednesday to break a deadlock between rich and poor nations on steps to fight global warming and avert a new, damaging setback after they failed to agree a U.N. treaty last year in Copenhagen.

In 1992, billionaire philanthropist George Soros and his hedge fund made a profit of over $1 billion by bringing the Bank of England to its knees after betting that the price of the Pound Sterling would drop. 

Source: Forbes

Louis Bacon's 86% return through betting on oil prices
louis bacon

In 1990, American investor Louis Bacon chose to invest in oil after correctly predicting that the Iraq War would impact the commodity's prices.

He ended up with an 86% return on that bet. 

Source: Money Week

Stanley Druckenmiller's double bets on the Deutsche mark
Stanley Druckenmiller

Between 1988 and 2000, American investor Stanley Drunckenmiller made millions by making two long bets in the German currency, Deutsche Marks, while working as a trader under George Soros' hedge fund Quantum. 

Source: Trading Education

Andrew Krieger at odds with the Kiwi dollar
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Andy Krieger

In 1987, currency trader Andrew Krieger took up a short position worth hundreds of millions of dollars against the New Zealand dollar. His sell positions exceeded the entire money supply of New Zealand and ultimately led to him netting $300 million for his employer Bankers Trust.

Source: Traders DNA

Paul Tudor Jones' $100 million profit on Black Monday
Paul Tudor Jones

In 1987, famed hedge fund manager Paul Tudor Jones predicted the 'Black Monday' crash. By shorting the stock market, he ended up with 200% returns for investors besides a $100 million paycheck for himself, an almost unheard of sum at the time.

Source: New York Times

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Contributer : Business Insider https://ift.tt/3fKGZ0M
Bill Ackman turned a $27 million bet into $2.6 billion in a genius investment. Here are 12 of the best trades of all time. Bill Ackman turned a $27 million bet into $2.6 billion in a genius investment. Here are 12 of the best trades of all time. Reviewed by mimisabreena on Saturday, December 26, 2020 Rating: 5

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