Abacus | Hillary Clinton: the world’s best investor or an out-and-out crook?

What do you consider a good investment return? In these days of ultra-low interest rates, with much of the government bond universe in Europe and Japan offering negative yields, many investors will be happy with the 5 per cent total return generated over the last 12 months by long-dated US Treasury bonds. Certainly that’s better than the flat performance of US and Hong Kong stocks, and a big improvement over the losses made by the typical hedge fund over the last year.

Even so, 5 per cent is thin pickings by historical standards, especially when you consider that in 1978 one novice investor made gains of 10,000 per cent in just 10 months by trading US cattle futures. And this was in the days before high-speed data feeds, electronic dealing and cheap trading algorithms levelled the playing field and made the markets more accessible to ordinary retail investors. Indeed, so impressive was this achievement that many professional traders have wondered how it was done, with some flatly declaring it to be impossible without committing fraud on a grand scale.

Others say the investor was just extraordinarily lucky. And the name of this fortunate novice? Hillary Clinton.

In 1978, Clinton was a lawyer earning US$24,250 a year, with a husband who took home US$26,500 from his job as Arkansas attorney general. Yet in October that year she deposited US$1,000 with the now defunct brokerage house Refco to open a futures trading account, and within weeks was running positions in the cattle futures market worth millions of US dollars. Such massive exposure would soon have bankrupted most novices, but Clinton, it seemed, had the Midas touch right from the start. Her very first trade generated a profit of US$5,300, and by the time she closed the account in July the following year, she had made US$99,541.