UK's biggest hedge fund star RETIRES with a $700m fortune - at the age of 41

dailymail.co.uk ^ | 18 October 2012 | By Larisa Brown

[dennisw]

Australian Greg Coffey owns sprawling estate in Scotland and mansions across world Dubbed 'the Wizard of Oz', he announced resignation to investors after 20 years in the industry

At the age of 41, he is one of the UK's biggest hedge fund stars, having amassed a fortune of $700million.

But with mansion properties spanning the globe and a family to look after, he has decided to take early retirement.

Top City trader Greg Coffey announced in a letter to investors that he is retiring from Moore Capital Management, run by billionaire Louis Bacon, after 20 years in the industry.

Mr Coffey, once tipped as a successor to Mr Bacon, wrote: 'After nearly 20 years in the financial markets, I’ve decided to leave the industry.

'The demands of my growing family mean that I am unable to commit to the market with the same intensity going forward.

'I plan on seeing much more of my wife and children and spending time in my home country, Australia.'

A source close to Mr Coffey told MailOnline that he was a 'very passionate man', who would often work throughout the night and day,

and after 20 years he felt it was time to leave.

The millionaire, from Australia, owns plush properties across the world, including a hunting estate on the Hebridean island of Jura, Scotland, and mansions in Kensington, London and Sydney.

Mr Coffey bought the sprawling Ardfin Estate on Jura in 2008, when it was on the market for £3.5million.

[dennisw]

Hats off to this rich guy who has his priorities right. I would do the same. Become a gentleman farmer but I would do it on huge scale ...say 50 million worth of farming, ranching ventures. Now he gets to relax and make more babies with his wife. The hi-IQ people need to have more children, spread their genes around

Plus he is moving to beautiful spacious Australia.

[Pecos]

And how little will have have after Inland Revenue (British version of IRS) gets thru with him?

[NonValueAdded]

tax him! bleed him white! boo and hiss at him in the public square. confiscate his property for the common good. hound him into poverty like the rest of us.

Love, Barry

[TexasRepublic]

He didn’t build that!

[E. Pluribus Unum]

My bet is he sees the global economic collapse coming and is executing his SHTF plan.

[dennisw]

My bet is he sees the global economic collapse coming and is executing his SHTF plan.

Australia is a great place to do this! And New Zealand is only 500 miles away. The Australian population is more civilized than us and will behave themselves if the SHTF

[justlurking]

I'm going to show you how you could be a billionaire in 26+ years, in 5 easy steps, starting with only $2,800.

Yes, I'm serious. It required perfect knowledge of the market, but my point is that it was possible:

1. On 1986-03-13, buy 100 shares of Microsoft, at $28/share. That's the day that MSFT went public, and $28 was the closing price. It actually varied between $25.50 and $29.25, but the key is to buy 100 shares that day, or shortly thereafter.

2. On 1996-07-19, sell all your holdings in MSFT. After multiple stock splits, you'll have 1,800 shares. Selling them at the closing price of $119.12, you'll have $174,211 after 20% capital gains taxes.

3. The following week, on 1996-07-24, invest the entire amount in Yahoo. You'll buy 11,061 shares of YHOO, hopefully at or near the closing price of $15.75/share.

4. On 2000-01-03, sell your holdings in YHOO. After multiple stock splits, you'll have 68,366 shares. Selling those at the closing price of $475, you'll have $25,219,145 after paying 20% capital gains taxes.

5. Sit on that cash for a few years, then invest it all in Apple on 2003-04-17. At the closing price of $13.12, you'll buy 1,922,191 shares.

Fast-forward to today. After one stock split, you'll have 3,844,382 shares of AAPL. If you were to sell it at yesterday's closing price of $644.61, you would have $2,106,407,954 after 15% capital gains taxes.

[justlurking]

I'll point out that this assumes that you would be able to buy or sell shares at the stated price on the specific days. However, large transactions tend to move the price more than small transactions. If you try to buy nearly 2 million shares of AAPL at one time, it will certainly cause the price to jump - as that would have been nearly 10% of the total volume of shares traded for that day.

Transaction fees aren't included in this example, either. However, you can get the per-share fee down to almost nothing when trading large blocks of shares.

Finally, if we were to expand this to 7 simple steps, we could add one small optimization: Sell your AAPL holdings on 2007-12-28, pay 15% capital gains taxes, and reinvest everything again in AAPL on 2008-11-20.

That would increase your holdings to 8,112,577 shares of AAPL, which would be worth $4.445 billion, after taxes. It would be $5.2 billion before taxes, putting you #63 on the Forbes 400 list.

[justlurking]

One more data point for comparison:

If you had used a Traditional IRA and avoided capital gains taxes on each sale, you would have $9.6 billion, before taxes, with the 7-step plan. However, to withdraw it from the IRA, you would have to pay ordinary income taxes (and possibly a 10% early withdrawal penalty, but I'll skip that).

If you withdrew everything at yesterday's closing price, you'd have to pay $3.36 billion in income taxes, leaving $6.25 billion to spend as you please. You would be #56 on the Forbes 400.

Now, all you have to do is invent a machine that sends a message back to yourself a bit more than 26 years ago. If you instead sent winning lottery numbers, everyone would know your name. But, after that initial purchase of MSFT, you would be able to do all your transactions online, and the shares would be held in the name of your brokerage. No one would know except who you chose to tell.

[jwsea55]

I can't wait that long.

Would like to find someone like this https://en.wikipedia.org/wiki/Hillary_Rodham_cattle_futures_controversy . In 4 years, should be worth $100B with $1000 up front, not factoring in taxes. But could deal with that.

[justlurking]

Yes, that's a good example of very unlikely results. And so is mine. You would have to have perfect knowledge of the behavior of the market, and buy at the bottom and sell at the top.

Just small variances in the date of the transactions I described would have a significant effect on the outcome. In one model, I used the average closing price for the week of the hypothetical transactions, rather than the highest closing price on a single day, and it reduced the final total by about 20%.

However, there would be a lot of volatility, and you would have to have a lot of patience. And fight a lot of temptation to spend some of it. :-)

[jwsea55]

Would have to say the second approach leads to almost certain results, particularly since some of those trades might have been posted after the event. Seems better to stick with a sure thing. Doesn’t it?