5 Key Lessons from Billionaire Kenneth Griffin

5 Key Lessons from Billionaire Kenneth Griffin

Kenneth Griffin – Introduction

This article is part of a series where I look at number of investing legends and highlight a number of things we can learn from them. Previously, I have covered Bill Ackman, WD Gann, and Alexander Elder.
In this article, I will look at Kenneth Griffin. Ken is one of the world’s leading hedge fund managers. He is the founder and chief investment officer of Citadel which has more than $35 billion in assets. In the last few years, he has been ranked as one of the best performers in the hedge fund industry. This article will look at a number of key lessons traders can learn from this legendary investor.

#1 – Start as early as you can

The first major lesson from Ken is on the role of starting early. Kenneth Griffin started his investment firm when he was a college student in 1987. As a student, Kenneth Griffin was intrigued by the world of finance and the numerous opportunities that existed. He decided to get in even though he had little capital to start with. In his college dorm, he installed a satellite dish which relayed him the financial quotes. Today, you don’t need to do all these. If you have a computer and an internet connection, you can access all the financial data you need. After installing the satellite, he went ahead and started to invest the little funds that he had. As he increased his cash, he reached out to other investors who invested in him. The lesson here is to start as early as you can if you have dreams of making it big in the financial market. Even if you have just $1000, you can get started right now. As your reputation grows, you will then attract more money.

#2 – Losses are Inevitable

In the financial market, you will make losses at times. This is inevitable. In fact, all investors have made their losses in the past. In the financial crash of 2008, Kenneth Griffin’s fund lost a considerable amount of money. In fact, Kenneth Griffin stated in an interview that he was losing hundreds of millions of dollars every day. As a trader, you need to understand that not all trades will make you money. Some trades will be really good but at the same time others will be really tough. How you adopt to the losses is what really matters. So far, Kenneth Griffin has already recovered from his losses and his fund is doing better than ever.

#3 – Adapt to Change

In any career path you follow, change is inevitable. If you decide to get into trading or investments, you will find that the industry is very change oriented. For instance, trading in the 80s is very different from trading in today’s times. When Kenneth Griffin was starting out, he invested mainly in the arbitrage market. With time, he has grown his fund to include among others one of the largest quantitative strategy firms in the United States. His firm is also a leading broker which processes high frequency orders on a daily basis. Adopting to change will help you become a better trader.

#4 – Power of Giving

If you become a successful trader, you will realize the amount of money that comes in will be enormous. The same has happened to Ken who is now listed as one of the richest men in the United States. This enormous amount of money has come with a lot of responsibility. Kenneth Griffin has given millions of dollars to charitable organizations. He has also signed up with the giving pledge which means he has pledged to give half of his net worth to charitable courses. In a recent interview, he stated that giving to charity has been the most important thing in his career.

#5 – Team

As a trader, you can decide to do it all by yourself or get a team. Each of these strategies has its own advantages and disadvantages. In terms of Kenneth Griffin, he has invested a lot in having the best team. He pays his traders very well. Also, Citadel has been ranked as one of the best places to work in America. If you decide to have a team to trade with, you should always go for the best people. These people should have a great track record.

Kenneth Griffin – Useful Links

  • Read more about Kenneth Griffin biography on Wikipedia
  • Discover more on Kenneth Griffin life on NYmag