(born 1974) is an American billionaire and formerhedge fundmanager who specialized innatural gastrading. His firm, Centaurus Advisors, LLC, was aHouston-based hedge fund that specialized in trading energy products.Arnold announced his retirement from running the hedge fund on May 2, 2012.
Arnold was raised inDallas, Texas, and he was the younger of two sons. His father was a lawyer, and his mother worked as an accountant at Arnolds Centaurus.49His father died when Arnold was 17.49A 1995 graduate ofVanderbilt University, he completed a degree in mathematics and economics in only three years.9He is a member ofLambda Chi Alpha.10
After college, he began his career atEnronas an oil analyst but was soon promoted to assistant trader.9In 1996, he moved to the Natural Gas Desk upon the departure of Jeff Bussan11, trading natural gas derivatives.9Using their newInternet-based trading network,EnronOnline,citation neededhe is credited with making three quarters of a billion dollars for Enron in 2001 and was rewarded with an $8 million bonus.912One of his former colleagues dubbed him king of natural gas.131415(His brother, Matthew, also traded atEnron.)4
When Enron collapsed in 2002, he founded Centaurus with his previous years bonus. According to Arnold, After Enron collapsed, there was a general revaluation ofcredit riskamong energy companies. The better credits were less willing to take on the lesser credits as counter parties. So the lesser credits found themselves with fewer counter parties willing to trade with them, even though they still needed to hedge the pricing risks in their business. Hedge funds previously had not been involved in theover-the-countermarket, except for the very largest, because the other participants were reluctant to grant credit to that type of entity.16
During the collapse ofAmaranth Advisors, Centaurus is widely credited as being one of the major players on the other side of their position, returning as much as 150% in 2005.17
At an energy conference, Arnold stated that he looks to place bets on a market that he determines is biased… we ask ourselves can we identify what is forcing a market to price a product at an unfair value, and then, what will push it back to fair value. Referring to the speculative trading taking place on the unregulated over-the-counter Intercontinental Exchange (ICE) andNYMEXs Clearport Trading, he said: Trading never went away… what has changed is the non-commercial type of interest… because of this there has never been as much investor interest as there is today.18
During August 2008, Centaurus acquired around 10% of the shares of National Coal Corporation (NCOC).19
Arnold gave a public speech to the modity Futures Trading Commission(CFTC), in which he opposed limits on financially settled trading positions but supported limits in the physical energy futures as they near expiration. Arnold said, I try to buy things whenever theyre trading below what [our] analysis shows to be fair value and sell things whenever our analysis shows that the forward curve is higher than our analysis of fair value.202122
TheLaura and John Arnold Foundationis aprivate foundationfounded by Arnold and his wife Laura.23The organization was founded in 2008, the same year that the Arnolds signed theGiving Pledge, a pledge by somehigh-net-worth individualsto donate a large fraction of their income to philanthropic causes during their lifetimes.24
In October 2018, it was reported that Arnold had spent more than $100 million in health-care related grants since 2014, with a particular focus on reducing pharmaceutical drug costs.25
Arnold is married to Laura Elena (Muñoz) Arnold. She is co-chair of the Laura and John Arnold Foundation She is a graduate ofHarvard CollegeYale Law Schooland has aMaster of Philosophydegree inEuropean Studiesfrom theUniversity of Cambridge.26She was formerly an attorney inHouston, Texasand an oil company executive. They have three children.27
Forbes: The Worlds Billionaires – John ArnoldMarch 2013
Ahmed, Azam (2012-05-03).John Arnold Is Said to Close Hedge Fund and Return Investor Money.
Kumar, Nishant (2013-05-02).Hedge fund Centaurus to return cash, shut Asia office: source. Reuters
When a billionaire trader loses his edge – The Term Sheet: Fortunes deals blogTerm Sheet. n.com. 2012-05-04. Archived fromthe originalon 2013-09-20
Houston billionaire trader John Arnold retiring at 38 – Houston Chronicle. Chron.com. 2012-05-02
Kate Kelly (2012-05-02).Legendary Energy Trader John Arnold to Retire. Cnbc.com
Kroll, Luisa.Hedge Fund Billionaire John Arnolds Fund Was Up When He Announced He Was Getting Out. Forbes
Ex-Trader at Enron to Retire From Hedge Fund. Online.wsj.com
New York Times: CORPORATE CONDUCT: THE TRADER; Enron Trader Had a Year To Boast of, Even If… By DAVID BARBOZAJuly 09, 2002
Lambda Chi Alpha – Notable Alumni. lambdachi.org. 2013-08-14
A speculator who is in for the long haulFinancial Times. May 14, 2008.
, Energy Trading, Post-Enron, January 15, 2006
King of Natural Gas John Arnold retiring. MarketWatch
Vardi, Nathan.The King Of Natural Gas Quits. Forbes
Demos, Telis (2009-11-24).Centauruss John Arnold: The king of natural gas – Nov. 24, 2009. Money.cnn.com. Archived fromthe originalon 2013-12-13
Futures & Options Trading for Risk Management – CME Group. Nymex.com
Tett, Gillian (2006-12-20).Smart trades that made this a good year for some. FT.com
The Role of Market Speculation in Rising Oil and Gas Prices: A Need To Put The Cop Back On The Beat
Demos, Telis (2009-11-24).Centauruss John Arnold: The king of natural gas – Nov. 24, 2009. Money.cnn.com
Energy Trading Mogul Warns on Trading Limits.
John D. Arnolds CFTC (U.S. Commodity Futures Trading Commission) speech
Apple, Sam (January 22, 2017).The Young Billionaire Behind the War on Bad Science.
Preston, Caroline (October 16, 2011).A Thirtysomething Billionaire Couple Take on Tough Issues Via Giving.
Loftus, Peter (2018-10-21).A Billionaire Pledges to Fight High Drug Prices, and the Industry Is Rattled.
Baylor College of Medicine: Laura Arnold named to BCM Board of Trustees by Lori WilliamsSeptember 26, 2008
Our Team Laura and John Arnold Foundation. Arnoldfoundation.org. Archived fromthe originalon 2015-02-08
Articles with unsourced statements from March 2013
This page was last edited on 30 January 2019, at 04:48