John Paulson
John
Paulson is one of the most famous hedge fund managers nowadays. Paulson became
world-famous in 2007 by shorting the US housing market, as he foresaw the subprime
mortgage crisis and bet against mortgage backed securities by investing in credit
default swaps.
In 2006 John Paulson realized something that few others suspected - the housing market and the value of subprime mortgages were grossly inflated and headed for a dramatic fall.
In the summer of 2007, the markets began to implode, bringing Paulson early profits, but also sparking efforts to rescue real estate and derail him. By the end of the year John Paulson earned more than $15 billion for his company, although he had pulled off the greatest trade in financial history.
In 2006 John Paulson realized something that few others suspected - the housing market and the value of subprime mortgages were grossly inflated and headed for a dramatic fall.
In the summer of 2007, the markets began to implode, bringing Paulson early profits, but also sparking efforts to rescue real estate and derail him. By the end of the year John Paulson earned more than $15 billion for his company, although he had pulled off the greatest trade in financial history.
Paulson
made billions more in 2008 by transforming his brave
move. Some of the underdog investors who attempted the daring trade also earned fortunes. But others who got the timing wrong met
devastating failure, discovering that being early and right wasn't nearly
enough.
What Paulson
has done is truly remarkable. There are many analysts who have been
able to predict this balloon, but people who have made a fortune as a result of
this are few.
The conclusion from his story is that big money make those who bravely stand against the opinion of the crowd.
The conclusion from his story is that big money make those who bravely stand against the opinion of the crowd.
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