#546: Srivatsan Prakash On The 6 Most Legendary Trades of All-Time

— George Soros breaking the British pound in 1992 by short-selling £15 billion, capitalizing on the unsustainable exchange rate mechanism and making $1–1.5 billion in profit.

— Paul Tudor Jones predicting the 1987 crash by analyzing parallels to the 1929 crash and shorting the market two weeks before Black Monday, profiting roughly $100 million.

— Andy Krieger at Bank of America shorting the New Zealand dollar with 400:1 leverage, accumulating a position larger than New Zealand's money supply and netting $300 million.

— David Tepper buying distressed bank assets and debt during the 2008–2009 financial crisis at steep discounts, generating $7 billion in profits for Appaloosa Management and $4 billion personally.

— John Paulson purchasing credit default swaps on subprime mortgage-backed securities before the 2008 collapse, personally netting $4 billion.

— John Arnold profiting $3 billion as Amaranth Advisors collapsed in 2006 after making bad natural gas bets on the opposite side of Arnold's positions.

— Conviction and position sizing matter as much as finding the idea: Every legendary trade involved both identifying a structural mispricing and then scaling the bet aggressively; finding the trade is only half the battle.

— Stick to your edge and cut losses quickly: Successful traders avoid unfamiliar territory, rigorously cut losses when proved wrong, and develop deep obsession with mastering their domain through constant study and research.

— Asymmetric risk–reward and leverage amplify returns when you have high conviction: Paulson paid pennies for cheap insurance; Soros knew the downside was limited by the band; Krieger used extreme leverage on a one-way bet—all key ingredients in generational trades.