Apr 28, 2026 · 1h 11m · invest-like-the-best
Legendary Trader Paul Tudor Jones on AI Risk, Bubbles and Buffett · Invest Like The Best
0:00 / 0:00
▶ Watch on YouTube →
gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of Invest Like The Best, legendary macro trader Paul Tudor Jones joins host Patrick O'Shaughnessy to discuss macro trading mechanics, market bubble dynamics, existential AI risks, and the foundational values of kindness and philanthropy that shape his life.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Patrick holds 12.3% of the talking time here. How this is scored →
Patrick as informed peer 2.2 Guest teaching 6.0 Guest disagreement 1.4 Patrick pushing back 0.0
speaking balance: gold is Patrick, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 28:20 Rejection of unregulated AI and human-machine blending
Jones vehemently dissents from Silicon Valley AI researchers who view merging humans with machines as acceptable, insisting on mandatory felony watermarking and public voting.
Hardest push from Patrick ▶ 14:53 Steering back to the core trader vs. investor distinctionPatrick politely insists on bringing Jones back to the original overarching question about the life of a trader versus an investor after an extended philanthropic tangent.
Biggest teaching moment ▶ 41:20 Macro valuation lesson on equity leverage vs GDPJones systematically breaks down the historical risk of equity-market-cap-to-GDP at 252%, walking Patrick through historical mean reversions and forward return realities.
Patrick holds their own ▶ 39:00 Patrick demonstrates mastery of equity supply mechanicsPatrick steps in to precisely summarize and complete Jones's line of thought on the dotcom bust with 'Cascade of selling' and 'Through buybacks'.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Patrick as informed peer | Guest teaching | Guest disagreement | Patrick pushing back | Why |
|---|---|---|---|---|---|---|
| Reversing the Interview: Starting with Kindness | 2 | 4 | 1 | 0 | Paul Tudor Jones takes control of the interview agenda early by preempting the opening question and pivoting to the podcast's signature closing question on kindness. Patrick O'Shaughnessy willingly yields control with zero friction. | |
| Systemic Philanthropy: Bed-Stuy, Robin Hood, and Charter Schools | 1 | 6 | 0 | 0 | Jones delivers an extended monologue detailing his involvement with the I Have a Dream program, Bed-Stuy charter schools, and founding Robin Hood. Patrick listens silently as Jones imparts life lessons on philanthropy and education pedagogy. | |
| Cultural Reflections on Civility and Pre-2000 Norms | 1 | 3 | 1 | 0 | Jones reflects on cultural civility before 2000, which transitions into host sponsor reads before Patrick compliments Jones's story and pivots to the commencement speech. | |
| Aim High and Shoot Straight: The Archery Commencement Speech | 2 | 7 | 1 | 0 | After recounting his bow-and-arrow commencement speech stunt, Jones schools Patrick on the wild 1970s commodity markets and the rise and fall of the Hunt brothers' silver squeeze. | |
| Early Trading Volatility and Misunderstanding Warren Buffett | 2 | 6 | 2 | 0 | Jones discusses early career volatility, the necessity of liquidity, and his former habit of dismissing Warren Buffett's trend-following style in guest lectures at UVA. | |
| Alpha vs. Compounding and an Apology to Warren Buffett | 2 | 6 | 1 | 0 | Jones articulates the stark difference between generating pure alpha (-0.12 correlation) and Warren Buffett's compounding genius, offering an open apology to Buffett for misunderstanding him for decades. | |
| Risk Management and the Catastrophic Risks of Artificial Intelligence | 2 | 7 | 3 | 0 | Jones speaks candidly about the catastrophic risk profile of AI, sharply criticizing the lack of public governance, absent risk management, and the reckless 'build, break, iterate' mentality of frontier AI labs. | |
| Mandatory AI Watermarking, Deepfakes, and Human Rights | 2 | 6 | 4 | 0 | Jones advocates for mandatory felony-level watermarking for AI outputs and forcefully rejects tech-industry assumptions around human-machine neural merging. | |
| Mentorship Lessons from Eli Tullis: Execution and Resilience | 2 | 6 | 1 | 0 | Jones recounts formative mentorship lessons from cotton trader Eli Tullis on emotional resilience during catastrophic market drawdowns and introduces the boxing metaphor for macro trading. | |
| Macro Catalysts: Japanese Yen, Fed Rates, and Scarcity Assets | 3 | 8 | 2 | 0 | Jones delivers a masterclass on identifying macroeconomic catalysts, breaking down the Japanese Yen valuation imbalance, the 2022 Fed rate-hiking regime, and comparing Bitcoin and gold scarcity. | |
| Historical Bubbles and Imbalanced Equity Supply Dynamics | 4 | 7 | 1 | 0 | Jones contrasts derivative-driven crashes like 1987 and 1998 with the 2000 equity-supply unlock dynamic. Patrick actively participates by supplying concise technical terms ('Cascade of selling', 'Through buybacks'). | |
| Equity Over-Leverage, GDP Ratios, and Mean-Reversion Risks | 3 | 8 | 2 | 0 | Jones educates the audience on the historic risk of the 252% stock-market-cap-to-GDP ratio and the sobering historical reality of negative 10-year forward returns when buying the S&P at peak valuations. | |
| Paul Tudor Jones's Daily Routine and Work Habits | 2 | 5 | 1 | 0 | Jones walks through his intense daily trading regimen, including working in the middle of the night during the London market open and strict cardio habits. | |
| Navigating Information Overload and Achieving Exquisite Execution | 3 | 6 | 1 | 0 | Patrick prompts Jones to define 'exquisite execution.' Jones explains the friction caused by thousands of daily emails versus focusing purely on moments of extreme market fear and greed. | |
| The Mindset of Great Traders, Nature vs. Nurture, and Longevity | 2 | 6 | 1 | 0 | Jones argues that 70% of great trading ability is innate nature rooted in gaming and probability. He shares life advice on longevity and explains his ultimate motivation to generate money to give away. | |
| Mid-Episode Sponsor Interlude | 2 | 5 | 1 | 0 | Following mid-roll sponsor spots, Jones recounts founding Robin Hood immediately following the 1987 market crash and applying rigorous metrics to poverty relief. | |
| AI's Impact on the Future of Work and Human Purpose | 3 | 7 | 1 | 0 | Jones explores human purpose in an automated future and details how journalistic inverted-pyramid writing trains disciplined principal component analysis in macro decision-making. | |
| The Principal Components of a Meaningful Life, Family, and Faith | 2 | 5 | 1 | 0 | Patrick asks Jones to apply principal component analysis to a meaningful life. Jones prioritizes family, faith, service, and legacy defined by deeds rather than trading accolades. | |
| Seeking Wonder and Spiritual Energy in Seasonal Transitions | 2 | 5 | 1 | 0 | Jones shares his passion for catching the exact day of peak seasonal transitions in spring and fall, before concluding with parting advice on leading with intentional kindness. |
Statements from this episode (32)
Tudor Jones: Bed-Stuy charter school ranked #1 of 543 NYC elementary schools
“We had hired the Absolutely dream team of educators to do it, and within about four or five years we were number one out of 543 elementary schools in New York City.”
Jones: Bunker Hunt bought 200M ounces of silver at $3.50 average
“Bunker Hunt Was squeezing silver at the time, and he bought about two hundred million ounces at an average price of about three and a half bucks.”
Jones: Silver crashed from $50 to under $10 in eight weeks
“Silver collapsed. It went from 50 bucks to under 10 bucks in the space of about eight weeks.”
Witnessing Hunt's silver crash made Paul Tudor Jones never trust assets
“Right then and there, I would never own anything or trust anything for the rest of my life.”
Jones: The greatest fortunes are made by riding long-term trends
“My number one bullet point is, you're gonna make your money by riding a trend. For the very, very longest time.”
Paul Tudor Jones's BBI fund holds -0.12 S&P correlation over 40 years
“I just take, ah, our fund, which, ah, BBI fund, for 40 years it has a -.12 correlation with the S&P 500.”
Jones: 100% of his fund's investment returns are alpha
“In trading, so a hundred percent of our returns are alpha, a hundred percent”
Paul Tudor Jones: Successful investors and traders are first and foremost risk managers
“Anyone that's really succeeded in investing or trading is first and foremost a great risk manager.”
Modelers say AI safety action requires 50 to 100 million deaths
“What's so scary when I was at this conference, which is only about 35 or 40 people, with one modeler from the four biggest model companies, and when I was able to ask them pointedly,
How do you think that AI safety gets resolved?
The, pretty much the consens…”
Paul Tudor Jones: The US President must urgently lead global AI regulation with China
“If there ever was a leadership position that needs to be taken by any, ah, president, it's on AI regulation right now, not just the United States, but convening with China, with all the other our purveyors are, to make sure that we don't do something that has …”
Paul Tudor Jones: AI risks would have been contained long ago under Tudor's risk standards
“If this was, I can tell you, if this was anything to do inside Tudor, this thing would have been so contained so long ago.
I mean, that's what a good risk manager does, and yet there's zero risk management here.”
Paul Tudor Jones: Mandating AI watermarking with felony penalties is essential
“The one thing that I think should be part of this next election, the simplest, most important thing that we can do is we can demand that all AI is watermarked. That's the single most transformative thing that we could possibly do for the country, for the world…”
Jones: Mentor Eli Tullis excelled at executing at extreme fear and greed
“He was really good at executing at the maximum apogee of fear as well as, ah, greed. He was so good at smelling that. Because he traded hardly anything but cotton, he would just sit there and he would just focus and he could just, he was just so good at waitin…”
Jones: Bitcoin in 2020 and Two-Year Rates in 2022 Were Knockout Trades
“If I think about big shots, just Bitcoin, 2020, a knockout. Two year rates, 2022, knockout.”
Jones: Macro Traders Must Wait Patiently for Rare, Highly Material Openings
“You have these incredible opportunities at times if you just sit and wait. The whole time in the interim, some of it you're just gathering information, looking for those openings. You're always trying to make progress. You're always trying to win the round, bu…”
Paul Tudor Jones: Currencies jumped 10% after Reagan, Thatcher, and Trump elections
“If you look at what those local currencies did, they all appreciated pretty quickly 10% off the bat.”
Jerome Powell kept policy easy to secure Biden reappointment, says Jones
“Powell, he overstayed being easy way too long because he wanted Biden to reappoint him.”
Paul Tudor Jones: Bitcoin is unequivocally the best inflation hedge, beating gold
“Bitcoin is unequivocally the best inflation hedge that there is, more than gold, because Bitcoin is finite. There's only so much Bitcoin that can be mined.”
Jones: 1987 crash was 100% caused by derivatives and portfolio insurance
“1987, that crash was 100% portfolio insurance. Hundred percent. Had they had limits, Which they didn't. It had been a 10%, maybe 15% max, but that was a hundred percent derivatives.”
Paul Tudor Jones: US stock market capitalization is at 252% of GDP
“When I say leveraged, we're 252% of stock market cap of GDP. So, in 1929, we were, I think at the top, we were 65%, and then in 87, we got to about 85 or 90%. In 2000, We got to a 170%, and now we're at two 52”
Paul Tudor Jones: Institutional PE allocation jumped from 7% to 16%
“If you look at private equity in 2007, 2008, that was about seven percent of institutional portfolios. Now it's about 16% of the institutional portfolios.”
Buying the S&P 500 at 22 P/E yields negative ten-year returns
“The problem is that if you buy the S&P at this current valuation, the ten-year forward returns negative when you buy the S&P of 22. That's what history shows.”
Paul Tudor Jones wakes at 2:30 AM daily to trade London open
“I wake up at probably two 30 or three and I I'll work for half an hour, watch London open for 45 minutes, half an hour. And I'll do a lot of analytical work then. It's a quiet time, it's good. Then I'll go back to sleep and wake up at six 15.”
Jones: Information Overload Distracts Macro Traders from Exquisite Execution
“I think today, for me at least, It's just a lot, lot harder, I think, because the information overload distracts me from exquisite execution.”
Jones: Traders Need Pre-Planned, Self-Executing Strategies for Volatility
“You better have a plan ahead of time, and it better be self-executing, and you better have thought through that.”
Paul Tudor Jones believes 70% of great trading ability is genetic
“We had a dinner about, I guess it was a year ago Christmas, and I had four or five of my best risk takers at dinner, and we had the debate, is, is, ah, a great trader's born or made? I'd say it was unanimous agreement at the table that 70% of it is, ah, is nat…”
Jones: Great Traders Are Type A, Inquisitive, and Love Games of Probability
“If I had to pick out the number one traits. Type A personality. Incredibly curious and inquisitive. And loves, loves competition, loves games. Because again, the whole, our whole business is just another form of probability theory.”
Jones: Robin Hood was founded expecting a 1929-style depression
“Robin Hood happened the day after the crash. And I maybe the worst macro call of my life was thinking we were gonna go into depression. I thought, for sure. I'd been looking at the parallels of 1929 for a year.”
Jones: Finance philanthropy shifted from arts to poverty relief post-1987
“In the eighties it was completely different. Everyone wanted to be associated with the Philharmonic, and these are all great, but they wanted to be with the named social charities. And I'd say after the crash everyone found their significance by helping others…”
Jones: AI Replacing Jobs Will Be Society's Biggest Challenge in 4–5 Years
“I think that's going to be the biggest challenge potentially in four or five years is what do we do when so many of our jobs have been replaced by AI.”
Paul Tudor Jones: College journalism courses are better than business school degrees
“I have long maintained that better than a business school degree, Journalism, one-on-one, should be a mandatory subject in every college, which is newspaper running in particular.”
Paul Tudor Jones: The Japanese yen is ripe to rally sharply
“Again, the Yen's a great example. It's been completely undervalued for the past 24 months. Way off sides. It's so ripe to rally sharply, but it needed a catalytic moment, and that catalytic moment was this new president that was just, a new prime minister that…”