Paul Tudor Jones is one of the richest people in the world. According to Forbes Magazine, his current net worth sits at a cool $7.5 billion - making him rank among the top three hundred richest people in the world today. Like a lot of other billionaires and centi-millionaires, he attributes this unthinkable fortune to the world of investing. Mr. Jones set up the hedge fund Tudor Investment Corporation in 1980 and since then his fund has grown to have a portfolio worth a whopping $6.4 billion as of March 2023.
Mr. Jones's entry into the investment world provided him with the perfect skill set to play the market conditions that have been in place for more than twelve months now. He started his career by trading cotton futures on the New York Stock Exchange - which provided him an opportunity to gain experience in trading commodities. A couple of years later he would set up his own hedge fund and its first investment would come from a commodities trading firm. He rose to fame in 1987, when he understood that a stock market crash was coming. This manifested itself in the form of the Black Monday crash of 1987, and the short bets that he placed enabled Tudor Investment to mark a whopping 200% gain while others bled losses.
A couple of years later, Mr. Jones's genius would make its mark again when he would profit by holding options that enabled him to sell shares at high prices when they were plummeting during a stock market crash. His hedge fund leverages the experience that Mr. Jones gained during his earliest days in the financial market, and these days it focuses primarily on discretionary macro trading. This strategy takes a broader look at the global macroeconomic environment and crafts trading strategies accordingly. As you're likely aware, the global commodities market was upended last year as the Russian invasion of Ukraine shook oil prices and created grain shortages.
This enabled Tudor Investment to take a crucial role in the market and once again make its market in a tumultuous environment. While there's little data available on how well the hedge fund performed last year, we can get a semblance of its fortune by taking a look at the portfolio size. Insider Monkey's research shows that Tudor Investment's portfolio was worth $6.5 billion as of March 2023. This marks a 30% growth since the fourth quarter of last year when the portfolio had stood at $5 billion. The portfolio was worth $4.2 billion in Q1 2022, enabling the latest figures to mark a whopping 55% gain. Looking at this, it appears as if Mr. Jones is definitely doing something right even as the stock market recovers from another historic bloodbath in less than five years.
Jones has made some interesting statements recently which should be crucial for anyone looking to invest in the stock market. However, before we get to this, a brief stock of the current macroeconomic conditions is warranted. The Federal Reserve has been on an aggressive interest rate hiking spree to control inflation. This makes doing business harder and that is precisely the effect the Fed aims to have since lower output means a slower economy and in effect lower spending to usher in lower prices. The consequence of this is a potential recession, but the Fed chairman Jerome Powell believes that this might not be the case as he recently stated:
So I think that—I think it’s still possible. I—you know, I think, you know, the, the case of, of avoiding a recession is, in my view, more likely than that of having, having a recession. But it’s not—it’s not that the case of having a recession is—I don’t rule that out, either. It’s, it’s possible that we will have what I hope would be a mild recession.
However, Mr. Jones begs to differ from Chairman Powell. In a fresh interview given in May 2023, he outlined that
Then we have, in a more intermediate basis, we have the financial cycle. The financial cycle, which is what we kind of look at internally, is the combination of the historical debt and asset valuation boom-bust. So if you think about post covid, we had this massive increase in debt. Massive increase in equity valuation. It creates this boom in the financial cycle, that's happened in 1990, that happened in 2000. That happened 2008. Our financial cycle, the peak of total debt growth plus stock market valuation occurred in September of 2021. Historically, it's about a two year lag, when that really really bites and you go into recession. That would be third quarter this year; there's a good chance based on our most recent financial episodes, there's a really good chance that we're going to be on the verge of looking like, or, actually going into recession.
With these details in mind, let's take a look at the top stocks that were on Mr. Jones's mind as he headed into what might be a recession year. Some top picks are Colgate-Palmolive Company (NYSE:CL), Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), and Phillips 66 (NYSE:PSX).
10 Best Stocks to Buy According to Billionaire Paul Tudor Jones
Our Methodology
To compile our list of the best stocks to buy according to Paul Tudor Jones, we used his hedge fund's filings for the first quarter of 2023 with the SEC to sift out those stocks that had the largest investment in dollar terms.
Best Stocks to Buy According to Billionaire Paul Tudor Jones
Tudor Investment's Q1 2023 Investment: $29 million
Johnson Controls International plc (NYSE:JCI) is an Irish company headquartered in Cork, Ireland. The firm was set up in 1885 and it makes and sells a variety of products. These include ventilation systems, air conditioning products, and fire detection sensors along with other products.
By the end of last year's fourth quarter, 45 of the 943 hedge funds part of Insider Monkey's database had held a stake in Johnson Controls International plc (NYSE:JCI). The firm's largest shareholder is Ken Fisher's Fisher Asset Management since it owns 11 million shares that are worth $682 million.
Along with Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), Colgate-Palmolive Company (NYSE:CL), and Phillips 66 (NYSE:PSX), Johnson Controls International plc (NYSE:JCI) is a stock on Paul Tudor Jones' radar.
9. Radius Global Infrastructure, Inc. (NASDAQ:RADI)
Tudor Investment's Q1 2023 Investment: $30.3 million
Radius Global Infrastructure, Inc. (NASDAQ:RADI) is an American company headquartered in Bala Cynwyd, Pennsylvania. The firm is a relatively younger entity since it was set up in 2010. It consolidates rental payments from telecommunications infrastructure and the land on which it is built into a single stream.
Insider Monkey dug through 943 hedge fund portfolios for their December quarter of 2022 shareholdings and found out that 30 had bought the firm's shares. Radius Global Infrastructure, Inc. (NASDAQ:RADI)'s largest investor in Q1 2023 was Mark T. Gallogly's Centerbridge Partners with a $160 million stake courtesy of 10.9 million shares.
Tudor Investment's Q1 2023 Investment: $30.4 million
Airbnb, Inc. (NASDAQ:ABNB) is one of the more popular companies and one that has disrupted the real estate sector. It enables property owners to temporarily rent out their properties to travelers and other users. The firm was set up in 2007 and is based in San Francisco, California.
54 of the 943 hedge funds part of Insider Monkey's database had invested in Airbnb, Inc. (NASDAQ:ABNB) during Q4 2022. The firm's largest hedge fund investor is Jim Simons' Renaissance Technologies with a $753 million stake.
Tudor Investment's Q1 2023 Investment: $31 million
Synopsys, Inc. (NASDAQ:SNPS) is an American technology company headquartered in Mountain View, California. The firm is a crucial player in the global semiconductor industry, with its products enabling chip manufacturers to design and validate their products through the manufacturing lifecycle.
As of December 2022, 44 of the 943 hedge fund holdings surveyed by Insider Monkey had held a stake in the company. After Q1 2023, the largest hedge fund shareholder was Panayotis Takis Sparaggis's Alkeon Capital Management since it owns 1.4 million shares that are worth $556 million.
Tudor Investment's Q1 2023 Investment: $33.50 million
Johnson & Johnson (NYSE:JNJ) is one of the oldest and largest pharmaceutical and consumer products manufacturers in the world. Set up in 1886, the firm makes and sells a variety of products such as beauty products, flu medicines, arthritis medicine, and cancer treatments.
After scouring through 943 hedge fund portfolios for their Q4 2022 shareholdings, Insider Monkey found that 84 had invested in Johnson & Johnson (NYSE:JNJ). The firm's largest hedge fund investor is Ken Fisher's Fisher Asset Management with a $967 million stake that comes courtesy of 6.2 million shares.
Colgate-Palmolive Company (NYSE:CL), Johnson & Johnson (NYSE:JNJ), Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), and Phillips 66 (NYSE:PSX) are some best stocks according to billionaire Paul Tudor Jones.
