GameStop, eBay and Russia's default: six Wall Street veterans on their best trades

When does a deal become truly outstanding? Private investors often look for universal strategies, but experienced managers know that in reality, success rarely fits into a standard formula. Sometimes the best results come not from in-depth analysis, but from a well-timed exit or a bet on an asset that others overlook. The best trades are always a combination of calculation, courage and precise execution.

Business Insider collected the stories of six professional investors who recounted the landmark deals of their careers. They range from buying tech companies with opaque structures to short positions that worked against market expectations. These cases don't provide ready-made solutions, but they do help us understand how those who make investment decisions under pressure operate - and why they recognize that luck matters, too.

Arjun Divecha is one of the most respected investors in the emerging markets segment. He founded and for many years headed the Emerging Markets division of GMO, an American investment company with assets under management of up to $13 billion.

Davecha made the brightest deal of his career on the Russian market - at the height of the 1998 crisis. After the default, he started buying up shares of the machine-building giant Uralmash (since 2016 it has been part of UZTM-KARTEX Management Company LLC). Their market price was falling rapidly, and GMO gradually collected 5% of the company. 

One night Divecha received a call from a man (his name withheld) who owned 2% of the plant's stock. He wanted to sell them for a dollar a share, even though the current price was 50 cents. Annoyed at being woken up, and knowing that several bankrupt New York hedge funds would soon begin selling their stakes in the company, Divecha made a counteroffer: 23 cents a share.

«I'm convinced that if I had said 25 cents, he would have disagreed,» Divecha says. «When I called 23, I used what I call the illusion of accuracy - it gives the impression that I did some complicated calculations and got that price.» In the end, securities bought at 23 cents were sold a few years later for about $15. The yield on this transaction was about 6400%.

Que Nguyen is the chief investment officer of equity strategies at Research Affiliates, a systematic strategy firm. Previously, Nguyen was responsible for investments at Willett Advisors and the University of Chicago Investment Office. She began her career at Numeric Investors, Morgan Stanley and State Street. 

In the spring of 2020, when the oil price turned negative for the first time in history, most investors avoided any exposure to the commodities sector. Nguyen took an unconventional route: instead of betting on rising oil prices directly, she bet on infrastructure companies - expecting these businesses to benefit from the recovery of the industry as a whole.

Instead of individual securities, she chose ETFs - exchange-traded funds that invest in publicly traded companies that serve the oil industry: transportation, storage and refining. This allowed her to cover the entire sector without having to pick a needle in a haystack: «When a haystack is full of needles, you just want to buy the whole haystack,» Nguyen says.

The bet worked: when it became clear that the global economy was emerging from its lockdown mode and energy demand was recovering, the investment yielded a 50% return. Nguyen considers this deal one of the most successful of his career, not only because of the result, but also because of his unconventional approach at a time when others were avoiding risk;

Bill Smead is the founder and chief investment officer of Smead Capital Management, which manages the Smead Value Fund. Smead began his career in 1980 at Drexel Burnham Lambert, one of the leading Wall Street players at the time, and later worked at Oppenheimer, Smith Barney and Wachovia Securities.

One of the best investments Smeed made was in the midst of the global financial crisis. In 2008, he turned his attention to eBay, whose stock had fallen to $11. At first glance, it looked like a major technology platform under pressure. But in reality, it was a resilient business with strong assets: full ownership of PayPal and StubHub, 30% in Skype, no debt and $3 per share in cash.

Smead considered such a price a «blatant underestimate»: he shared the idea with a close family friend, a broker who came to visit. «I said: 'When you get back to the office on Monday, call all your clients and ask them to buy this stock - and never sell,'» Smead recalls.

The bet worked. PayPal and StubHub were later spun off into separate companies, and eBay continued to rise. Today, the stock is trading at $77 - and, according to Smid, remains an example of how in-depth analysis and equanimity in a moment of panic can produce outstanding results.

John Barr is a manager of the Needham Aggressive Growth Fund and a director of Needham Funds. Prior to his Wall Street career, Barr spent 14 years in electronics design automation, which he says strongly influenced his investment thinking. 

Barr focuses on investing in «hidden quality compounders» - low-profile but promising companies. He found one in 2009: he bought shares in Nova, an Israeli company that makes measurement systems for semiconductor factories. The papers were cheap; analysts didn't cover them. «No one was following this company at all. But I knew one of its competitors well, also a small public company that was doing great and that I already had in my portfolio,» Barr recalls.

He invested in Nova with the expectation that the growth of the semiconductor industry would lead to increased demand for its equipment. It worked: as the chip industry evolved, especially as artificial intelligence boomed, demand for manufacturing technology began to skyrocket. Within a few years, Nova's stock had appreciated more than 60 times in value, one of the most successful deals of Barr's career.

Jason Xu is the founder and chief investment officer of Rayliant Global Advisors, a management company specializing in quantitative strategies and emerging markets. Xu is considered an expert in smart-beta strategies and systematic investing, and his funds manage billions of dollars..

One of the most successful trades of Xu's career was betting on GameStop's stock to fall - at the height of the 2021 «people» rally. At that time, retail investors united via Reddit to dramatically inflate quotes to punish hedge funds that took short positions. One of the victims was the Melvin Capital fund.

Xu watched the situation closely and saw Melvin's collapse as a signal: if the crowd takes over from professional managers, it's probably the peak. He made the same bet as Melvin and also opened a short position. But entered late - and that, he says, was the key to his success. «I made money because I entered late,» he explains. - Usually in our field this is the path to failure, but that time it was the path that allowed me to make money.

The bet paid off: GameStop's stock plummeted 87% in just a few weeks. The deal was both a financial success for Xu and a reminder that sometimes being late is an advantage.

Hank Smith is Chief Investment Strategist and a member of the Board of Directors of Haverford Trust, a private equity firm managing multi-billion dollar assets. He has overseen the company's investment philosophy since 1991. Prior to that, Smith managed assets at BNY Mellon and PNC.

One of the major decisions of his career was two timely sales before the 2008 financial crisis. The first was in October 2007, when Citigroup reported a weak quarterly report. Despite its blue-chip status, Smith saw the drawdown not as an accident, but as a more serious problem - and sold his entire stake. «We were criticized by clients: why sell a quality company on a drawdown? But Citi kept falling - and hasn't recovered since. It is now trading 79% below its late 2007 levels,» he recalls.

He made his second decisive move in September 2008. AIG, one of the world's largest insurers, was facing mounting losses and a tight credit default swap (CDS) market, and Smith decided not to wait. «We got out of the position in one day at about $15,» he says. - The next day, the securities opened at $2. A couple days later, when clients got confirmation of the trade, they called us heroes.»

For Smith, these trades were proof that investing is as much about analysis as it is about the ability to make decisions before anyone else - even when the market is still fluctuating. These investment steps did not bring profits - but they helped preserve capital. And in a crisis situation, this was the key result.