Years before hedge fund titan Paul Tudor Jones learned to brave the ups and downs of financial markets, he got his lesson in coming back from failures while playing sixth grade basketball. Then the smallest and youngest boy on the team, Jones had failed to get a point all year -- prompting the coach to ask his teammates to pass him the ball so he could try to score in the last game of the season.
But the other team knew what was going on and blocked Jones at every turn, then celebrated shutting him out -- even though the opposing squad had lost the game. Jones left the gym in tears and hid in the bathroom, but didn’t give up on sports. He eventually found boxing in tenth grade, where as a slightly-built teenager he could finally compete against rivals his own size. Jones thrived as a welterweight boxer, and later boxed on the team at the University of Virginia. But he never forgot his fruitless basketball season. “That failure haunted me even as I won a collegiate boxing championship,” says Jones in an email interview. “But it helped me get there.”
Jones flourished in other ways in college, becoming the president of the Sigma Alpha Epsilon fraternity (he joked that his other sport was beer pong) and graduating with a degree in economics. To help pay for school, the Tennessee native wrote for The Memphis Daily News under the pseudonym “Paul Eagle,” and even served a stint as the paper’s front page editor.
The legendary trader went on to work at the New York Cotton Exchange and stock brokerage firm E.F. Hutton, before founding his own hedge fund in 1980 -- just four years out of the University of Virginia. He dubbed the company Tudor Investment Corporation, and soon earned fame on Wall Street when he foresaw and bet correctly on the 1987 stock market crash. Around the same time, Jones began his foray into supporting educational causes -- where he learned once again that failure and success go hand in hand.
Inspired by an episode of CBS News’ 60 Minutes, Jones decided to “adopt” a class of sixth graders in Brooklyn’s Bedford-Stuyvesant neighborhood in 1986. The hedge fund manager promised that he would pay for college if the students graduated from high school, then poured his heart into the project for the next six years. Aiming to get 90% of the kids to graduate, Jones took the students on ski and overseas trips, hosted weekends at his Virginia home, organized report card nights, and hired a counselor who helped arrange after school activities.
Yet in the end, a Harvard researcher compared Jones’ class to kids in nearby schools and found no significant difference in graduation rates, dropout rates, academic scores, and teenage pregnancies between the two groups. “I learned that getting involved with 12-year-old students is way too late to counter the effects of the public education system’s structural failures,” says Jones. “The money and the will to help are useless without the brains to help.”
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In 2004, Jones tried again, cofounding the Excellence Boys Charter School, the first all-boys charter school in the nation. The Brooklyn school opened its doors with kindergarteners and first graders, then expanded to a K-8 institution with over 800 students. By 2015, the school’s third and fourth graders were testing above the city’s and state’s averages for math, even though more than three quarters of the students qualified for free and reduced price lunches.
Jones also applied what he learned from his first failure to the nonprofit group Robin Hood, a New York City anti-poverty charity that he cofounded in 1988. The organization gives grants to over 200 programs that provide job training, food and shelter, and legal assistance, but its biggest area of spending is on education. “The only solution to poverty is through education,” Jones says. “The disparities in our educational system are the worst racial crisis since slavery.”
With backing from other hedge fund heavyweights such as Greenlight Capital’s David Einhorn, Two Sigma’s John Overdeck, Och-Ziff Capital’s Daniel Och and Appaloosa Management’s David Tepper, Robin Hood has funded public charter schools in Brooklyn and counseling for first generation college students. In 2016, a high school in Bedford-Stuyvesant receiving its grants achieved its fourth straight year of 100% college acceptance for its graduating class. “Three decades later we’re three decades smarter,” Jones remarks. “They’re doing even better than what we imagined was possible 30 years ago.”
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