Bill Lipschutz is a multimillionaire. At his peak, he was making 300 million dollars a year for Salomon Brothers investment bank.
Lipschutz started his investment career early when he converted $12,000 he inherited from his grandmother into $250,000.
But his success was short-lived. Bill Lipschutz portfolio was too heavily weighted towards one position. Moreover, the market had turned against that position and Lipschutz ended up losing most of the capital.
However, the once bitten, twice shy didn’t apply to Lipschutz instead he viewed the experience as a valuable investing lesson; don’t put all your eggs in one basket.
Bill Lipschutz would apply what he learned (the hard way) to future investment decisions and he would go on to occupy number five on the top ten list of the world’s most profitable forex traders.
As a student Bill Lipschutz was studious at school, he was awarded good grades. He had an aptitude for mathematics (this is a recurring theme amongst top traders).
Lipschutz attended Cornell University and earned a Bachelor’s degree in Fine Arts. He simultaneously enrolled in business classes and earned an MBA in finance in 1982 from the Johnson School of Management, also at Cornell University.
Bill Lipschutz interned at Salomon Brothers before graduating in 1982. He would join Salomon Brothers as a full-time employee in May 1982.
Bill Lipschutz career progression at Salomon Brother was rapid. He was the principal trader for Salomon Brothers’ proprietary foreign exchange account from 1984 until he left in June 1990. In 1988, he was appointed a Director of Salomon Brothers, heading the Global Foreign Exchange Options Group and the New York Foreign Exchange Trading Desk. In 1989 he was named the Managing Director and Global Head of Foreign Exchange.
Bill Lipschutz has also held a number of elected and appointed positions in the foreign exchange industry.
They are as follows; a member of the Board of Governors of the Philadelphia Stock Exchange, vice chairman of the Foreign Exchange Options Committee of that exchange, a member of the Ad Hoc Federal Reserve Option Committee, a member of the Advisory Committee of the Chicago Board Options Exchange and as a Director of the Philadelphia Board of Trade.
Bill Lipschutz opted to take an early retirement from Salomon Brothers.
In 1991 Lipschutz founded Rowayton Capital Management, an asset and management firm where he was the President and CEO until 1995.
In 1995 he then formed Hathersage Capital Management, which is a Global Macro manager that specializes in G10 currencies.
At his peak, Bill Lipschutz “Sultan of Currencies” was making 300 million dollars a year for Salomon Brothers investment bank.
Bill Lipschutz uses technical and fundamental analyses in his trading decisions. He is also a contrarian trader.
Forex trading is all about trading off information flow. What is important is to assess what the market is focusing on at the given moment – Bill Lipschutz
Here are some of Bill Lipschutz’s quotes.
“Foreign exchange is all about relationships…” He recommends cultivating a personal relationship with your broker to ensure that you get filled at the best prices and sold at the best prices too. Personal relationships open doors for traders.
“The next big information may be from that investment banker you sit beside on an aircraft or at a wedding event. You never can tell.”
“Forex trading is all about trading off information flow. What is important is to assess what the market is focusing on at the given moment.”
“Always understand the risk/reward of the trade as it now stands, not as it existed when you put the position on…“
“If a big buyer comes in and pushes the market 4 percent, that’s an advantage.“
“A gut feeling is probably better described as a subconscious market experience.“
In other words, experienced traders subconsciously reconcile their current trading positions with previous loss-making and profitable trades.
The next big information may be from that investment banker you sit beside on an aircraft or at a wedding event. You never can tell. – Bill Lipschutz
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