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Bruce Kovner: A Former Taxi Driver Who Mastered Intermarket Analysis

Dropping out of Harvard University, becoming a taxi driver, and losing thousands of dollars when starting trading didn't dampen Bruce Kovner's spirit. Successful traders and investors often share their knowledge and time to develop the world of trading and investment, including founding investment firms, becoming consultants, developing trading software, and writing books. One of the most inspirational figures in trading is Bruce Kovner.


Bruce Kovner, Master Commodity Trader and Former Taxi Driver

Kovner began his career as a commodity trader. By March 2011, his personal wealth was estimated at $4.5 billion. He is also known as a philanthropist and has served as Chairman of the American Enterprise Institute. Additionally, Kovner is a politician from the US Republican Party and a campaign donor for presidential candidate Mitt Romney.

Bruce Kovner was born in the Bronx, New York, in 1945 and grew up in San Fernando. He studied economics at Harvard University but dropped out and failed to earn his Ph.D. Kovner then worked as a writer and taxi driver before getting the idea to trade in the commodity markets. He started trading in 1977 with soybean futures contracts using $3,000 borrowed from a MasterCard credit card. In a short time, his funds were halved. He realized that he was very tense while trading and completely ignored risk management, something he was unfamiliar with at the time.

In his trading career, Kovner worked as a trader for Michael Marcus at Commodities Corporation (now part of Goldman Sachs) and reportedly made millions of dollars in profits. Since then, Kovner has been known as a master commodity trader and founded Caxton Associates in 1983, which at one time managed over $10 billion in funds. Since 1992, Caxton has no longer accepted new investors.

Expert in Intermarket Analysis

Kovner's trading strategy is a combination of fundamental and technical analysis. In fundamental analysis, he pays close attention to intermarket influences and excels in analyzing global economic and political conditions. In technical analysis, he is a trend follower and tends to enter positions during breakouts (when prices break key levels).

Kovner emphasizes the importance of confidence in trading: "You have to believe that you will make a profit. Although no position can be 100% certain, you must still have confidence. If you follow another trader's position that you do not believe in, it will be difficult to consistently profit." His staff must be on call 24 hours, especially during breakouts in forex, commodities, or futures markets, or during significant fundamental events that could affect market movements.

Bruce Kovner's Advice for Traders

"Whatever your trading style, you must understand risk management. You don't need to simplify your trading approach to the point of over-trading. Enter only when you are truly confident," explains Kovner, who is also a classical music enthusiast.

Here are some trading tips from Bruce Kovner:

  1. Take Time to Analyze Different Countries' Economies: Although complex, integrate various analyses into a specific picture.

  2. Have a Strong Strategy and Anticipate Risks: Always be prepared for various possibilities.

  3. Stay Rational and Disciplined Under Pressure: Do not let emotions take control.

  4. Use Fundamental Analysis Wisely: Wait for official news, then observe the market's reaction.

  5. Set Stop Loss Orders: Always use stop loss to limit losses.

By studying and following Bruce Kovner's guidance, traders can improve their chances of success in the challenging world of trading.

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