Started with about $25,000
CNBC and Wikipedia say he started Moore Capital with about $25,000 from an inheritance, but the fund grew quickly thanks to outside investors. Wikipedia says the first investor put in $1.5 million
Famous Traders · Global Macro
Louis Bacon
Louis Bacon / The Global Macro Trader Who Founded Moore Capital
He started his fund with about $25,000 of his own money in 1989, made about 86% the next year during the Gulf War, managed outside money for 30 years, then turned to conserving vast tracts of land in America. On this page you can plan for the events of 1990, play a hold-or-cut game, and see how much a 3/25 fee structure eats into returns.
SURVEY PLATE · SHEET 1989Moore CapitalGLOBAL MACRO · NEW YORK · 1989–2019
BENCH MARKLBMOORE · 1989
- 1989Founded Moore Capital with about $25,000 of his own money
- AUG 1990Iraq invades Kuwait, oil prices spike
- 1990First full year profit of about 86%
- NOV 2019Returned money to outside investors
Illustration: designed as a survey map sheet, because beyond the markets he is known for land conservation. No openly licensed photo was found
Born1956
Moore Capital1989
First full year+86%
Personal starting capital$25K
1990 · first full year+86%Moore Global Investments’ gain from shorting Japanese stocks and betting on oil after Iraq invaded Kuwait
1989–2019~$19BCumulative profit the fund made for investors over its life, as reported by Forbes and financial media when he returned money in 2019
THE LAND210,600+Acres of land he had placed under conservation easements as of 2016, or about 850 square kilometres
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ProfileQuick facts
NameLouis Moore Bacon
Born25 July 1956 in Raleigh, North Carolina, USA
EducationBachelor’s degree in American literature from Middlebury College in 1979 and an MBA in finance from Columbia Business School in 1981
Before his fundStarted at Bankers Trust, then became a futures trader and broker at Shearson Lehman, rising to senior vice president of futures
His own fundFounded Moore Capital Management in 1989. The name Moore comes from his middle name. Personal starting capital of about $25,000 from an inheritance
Best known forMoore Global Investments made about 86% in 1990, its first full year, by shorting Japanese stocks and betting that oil would spike after Iraq invaded Kuwait
StyleGlobal Macro, betting on big directional moves in bonds, currencies, stocks and commodities, and known for cutting losses quickly when price moves against him
Beyond marketsA major land conservationist through the Moore Charitable Foundation, founded in 1992, who has placed hundreds of thousands of acres in Colorado under conservation easements
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Early lifeFrom literature student to futures trader and Global Macro fund
Bacon did not start out in finance. He studied American literature, worked on a fishing boat and was a clerk at a brokerage during school breaks, before taking an MBA at Columbia and entering trading through Bankers Trust and Shearson Lehman
Highly leveraged futures markets taught him to respect risk. Forbes described him as cutting losing positions faster than his rivals and liking to go to cash and rethink. He is also known for being very private, rarely giving interviews and guarding his fund’s secrecy closely
ELEVATION PROFILE · 1956–2019Tap each point on the route to read about a stage of his life
Born on 25 July 1956 in Raleigh, North Carolina. His father was in real estate. His family descends from Roger Moore, who built Orton Plantation in 1735, the origin of his middle name and his fund’s name
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Paul Tudor Jones on BaconLouis can boil a trade down to just a few key themes, and that is what separates the winners from the losers
Paraphrased from Forbes’ 2004 citation, not a direct quote
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Scenario map, 1990Lab: plan three Macro themes for 1990
In 1990 the Japanese stock bubble began to burst, and on 2 August Iraq invaded Kuwait. Oil prices spiked and stocks around the world fell. Reports say Bacon’s profit that year came from several themes at once. Size three themes, then compare the result in the real world with a hypothetical world without the war
WORLD AReal world: Iraq invades Kuwait
Long oil
—
Short Nikkei
—
Short S&P 500
—
Whole portfolio
—
WORLD BHypothetical world: no war
Long oil
—
Short Nikkei
—
Short S&P 500
—
Whole portfolio
—
If you’re right (World A)—
If you’re wrong (World B)—
Gain when right ÷ loss when wrong—
World A uses approximate price levels from public reports. Each theme covers a different period from peak to trough, so the result is adjusted by the share captured. World B is an assumption: oil −20%, Nikkei +10%, S&P 500 +8%. Size is position value relative to the portfolio, not Moore Capital’s actual positions
TRAIL PERMIT · COST OF TRADING
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Open account ↗1TRADER is a partner (IB) and earns a commission when you open an account through our link · % is the share of IB commission returned to you · How to get rebates
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Hold or cutGame: the price moves 10% against you. Hold or cut?
People close to him say that if a price fell from 100 to 90, a fundamental investor might think it’s cheaper and worth buying more, but Bacon would think there must be something he got wrong, and get out. Play six hypothetical trades. Each one first moves against you to −10%, and you choose whether to hold or cut
Trade 1 / 6
Your total0%
Bacon’s rule: always cut0%
Hold every time0%
Worst single-trade loss0%
The price has moved against you to −10%. Your call
All six trades are hypothetical price paths, not Bacon’s real trades. Results are percentages per trade at equal size. In real life, traders who cut losses quickly can often re-enter when the picture is clearer, which this game does not count
How an industry insider described him, as cited by ForbesSome people might say, I’m losing money but I think I’m right. Louis can’t stand that. He’ll go to cash
Paraphrased, not a direct quote
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Three and twenty-fiveLab: how much do 3/25 fees eat into returns?
Forbes reported in 2004 that Moore Capital charged management fees of up to 3% of assets a year plus a 25% performance fee on profits, above the industry standard of 2/20, and in 2019 Bacon cited fee pressure as one reason for returning money. See what this difference adds up to when compounded over many years
Investors’ actual return per year—
Total fees (on 100 invested)—
Share of profit taken by fees—
A simple model: the management fee is charged on each year’s starting capital, the performance fee on profit after the management fee, and only on gains above the previous peak (high-water mark). Returns are the same every year, excluding taxes and other expenses
RANGER STATION · FEESFees eat returns. Cut them when you canTrade with XM account through 1TRADER and get up to 90% of the IB commission on every lot
1TRADER is a partner (IB) and earns a commission when you open an account through our link · % is the share of IB commission returned to you · How to get rebates
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Beyond the marketBeyond markets: how big is the land he protects?
Bacon has used his market wealth to buy and protect large tracts of land through the Moore Charitable Foundation since 1992. Acres can be hard to picture, so compare them with some well-known places
Compare with
Area—
In hectares—
Compared with the reference area—
1 acre ≈ 0.004047 square kilometres ≈ 0.405 hectares. Reference areas are approximate. The squares are drawn to scale by area, not actual shape. A conservation easement gives up the right to develop land to an organisation so it can never be developed; it does not mean giving away ownership of the whole property
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Fact checkFact check: truth and legend
Bacon rarely gives interviews, so stories about him come from the media and people around him. We sort each one by the weight of the evidence
Made about 86% in the first year
CNBC, MoneyWeek and a widely cited Fortune article all say Moore Global Investments made about 86% in 1990, its first full year
He predicted the Gulf War
Most reports say he bet that oil would spike after Iraq invaded Kuwait and shorted Japanese stocks, with profits coming from several themes at once. Saying he predicted the war is an exaggeration; there is no evidence he knew the invasion date in advance
Returned about 24% a year
Forbes reported in 2004 a return of 24% a year net of fees since 1990, but after weaker later performance, Institutional Investor reported in 2019 that the same fund was down to about 15% a year since inception, so the figure depends on the period measured
Moore never had a losing year
Forbes says the main fund lost money in 1994, when interest rates surged, and in 2002 during the credit crisis after Enron
Steadier performance than Soros and Robertson
A widely cited Fortune article put his Sharpe ratio for 1995–1999 at about 1.77, higher than the funds of Soros and Robertson, but this is a five-year figure from a secondary source, not over the fund’s whole life
Moore Capital was fined by the CFTC
The CFTC imposed a $25 million penalty in April 2010 to settle charges that a former portfolio manager tried to push up the closing prices of platinum and palladium futures and that the firm failed to supervise. In 2013 it also paid about $48.4 million to settle a related class action
Moore Capital shut down in 2019
He returned outside investors’ money from three main funds, but Institutional Investor notes that the firm did not shut down and carried on as a fund managing its executives’ own money
Placed hundreds of thousands of acres under protection
His 2012 conservation easement covered about 90,000 acres, and when he received the Theodore Roosevelt Conservation Partnership award in 2016, his total donated easements exceeded 210,600 acres
Every lot you trade with XM through 1TRADER earns cash back of up to 90% of the IB commission, lowering your costs over time
Open an account for cash back ↗1TRADER is a partner (IB) and earns a commission when you open an account through our link · % is the share of IB commission returned to you · How to get rebates
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LessonsLessons for Forex and gold traders
Your checklist
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When price moves against you, assume you’re wrong
People close to him say that when price moved against him, Bacon assumed he had got something wrong and got out first instead of averaging down. In Forex, set a stop loss before every order
Boil it down to a few themes
Paul Tudor Jones praised Bacon for boiling trades down to a few key themes. Retail traders should also know the main reason behind each order, and close it if that reason disappears
Think in scenarios before big events
Before big news, ask: if this happens, which markets move? If it doesn’t, how much do I lose? Then size so you survive both cases
Costs quietly eat returns
Fees that look small compound into big money over many years. For traders, that means spreads and commissions, which you should keep as low as possible
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Quiz5-question quiz
Question 1 / 5
Where does the name Moore Capital come from?
His full name is Louis Moore Bacon, and his family descends from Roger Moore
In 1990, roughly how much did Bacon’s main fund make?
About 86%, from shorting Japanese stocks and betting that oil would spike after Iraq invaded Kuwait
When price moved against him, what was Bacon known for doing?
He often went to cash first, then rethought when the picture became clearer
What does a 3/25 fee mean?
A 3% management fee on fund assets a year plus a 25% performance fee on profit, as Forbes reported in 2004
What happened to Moore Capital in 2019?
He cited recent performance, competition for trading talent and fee pressure
0/5
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Map before you marchPlan the map before you set off: clear themes, the right size, and knowing where you’re wrong
What you can apply is thinking in scenarios before big events, setting your exit before you enter, and keeping trading costs low.
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How to get rebates, step by step →Leveraged trading carries high risk. Study the broker’s terms and the risk disclosure before opening an account.
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Further readingFurther reading
- More Money Than GodSebastian Mallaby · 2010A history of hedge funds from the early days to the 2008 crisis, giving context for the Global Macro funds of Moore Capital’s era
- Inside the House of MoneySteven Drobny · 2006Interviews with several Global Macro fund managers explaining this style’s scenario thinking and risk management. It is not a book about Bacon himself
Sources for this article
- Wikipedia: Louis Moore Bacon
- Wikipedia: Moore Capital Management
- CNBC: Longtime trader Louis Bacon to exit Moore Capital after 30-year run (2019)
- Institutional Investor: Louis Bacon’s Moore Capital to Return Outside Capital (2019)
- CFTC: Moore Capital ordered to pay a $25 million penalty (2010)
- Forbes: Macro Money Maker (2004)
- MoneyWeek: The world’s greatest investors: Louis Bacon
- Wikipedia: 1990 oil price shock
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FAQFrequently asked questions
Who is Louis Bacon?
An American Global Macro trader born in 1956 who founded Moore Capital Management in 1989. He is known for making about 86% in 1990 and is a major land conservationist
How did he profit in 1990?
Most reports say it came from shorting Japanese stocks as the bubble burst and betting that oil would spike after Iraq invaded Kuwait in August 1990, with profits from several themes at once
Has Moore Capital closed?
No. In November 2019 he returned outside investors’ money from three main funds and carried on with the executives’ own money
What stands out about his risk management?
Cutting losses fast when price moves against him, going to cash first and rethinking, and boiling his ideas down to a few key themes instead of holding many things he isn’t sure about
How can his ideas be used with Forex and gold?
Before big news, think through what happens if you’re right and if you’re wrong, set a stop loss before entering, size so you survive being wrong, and cut trading costs such as spreads and commissions
Educational content, not investment advice. Return figures are publicly reported figures. The labs use approximate data and hypothetical models. · risk disclosure · Forex glossary