INSIGHTS: The Greatest Trade Ever

INSIGHTS: The Greatest Trade Ever

Posted: 03 Dec 2009 11:05 AM PST

John Paulson began his career at Boston Consulting Group before leaving to join Odyssey Partners, working under Leon Levy. He later worked in the mergers and acquisitions group at Bear Stearns. Prior to founding his own firm, he was a partner at mergers arbitrage firm Gruss Partners LP. In 1994, he founded his own hedge fund with $2 million and two employees (himself and an assistant).

In the video, Wall Street Journal columnist Gregory Zuckerman talks about how Paulson made $6 billion as his firm made $20 billion betting against the housing market. These returns included $4 billion for Paulson personally in 2007, which Zuckerman describes as the single-most lucrative payout in history.

There are plenty of lessons that we can all learn from Zuckerman’s book The Greatest Trade Ever, to better our own decisions when trading or investing.

The main one as far as I am concerned is Have the courage of your own convictions and don’t listen to the experts.

Even though Paulson was being told he would go broke doing this by the housing “experts”, he not only put the trades on, but he kept them on and let the profits run, even when clients ‘begged” him to take the money and run.

It wasn’t easy though as John had trouble raising the money for his fund, and was viewed as an “outsider” in the mortgage market and didn’t reach legendary status until after the mega-profits had been booked.


http://viewpointsofacommoditytrader.com/1288/the-greatest-trade-ever/