The Greatest Trade Ever: $15 Billion One-Year Payout | A Simple Model (2024)

FAQs

How did John Paulson make his money? ›

Paulson, a former merger-arbitrage specialist, made his name by betting against subprime mortgages and banks as the U.S. housing market unraveled. His hedge-fund firm, Paulson & Co., generated profits of some $20 billion from the trades. In the following years, he struggled to consistently recreate that magic.

In “The Greatest Trade Ever,” Gregory Zuckerman chronicles the unparalleled and unprecedented trade executed by John Paulson, with the help of analyst Paulo Pellegrini and others at Paulson's firm. The book provides insider insight into how Paulson and others profited from the subprime market's demise.

He rose to fame at the height of the 2008 financial crisis, making $4 billion by shorting the housing market. Paulson & Co, a hedge fund he founded in 1994, generated about $15 billion for investors even as turmoil rocked the markets.

Who Is the Richest Hedge Fund Manager? Ken Griffin of Citadel is both the richest hedge fund manager and the highest paid. In 2022, he earned $41. billion, and by the beginning of 2023 his net worth was estimated at $35 billion.

John Paulson

This timely bet made his firm, Paulson & Co., an estimated $2.5 billion during the crisis. He quickly switched gears in 2009 to bet on a subsequent recovery and established a multi-billion dollar position in Bank of America (NYSE:BAC) and an approximately $100 million position in Goldman Sachs.

Despite the millions Burry made for himself and his investors, he faced substantial criticism, leading him to shut down his original hedge fund, Scion Capital, in 2008. Partly driven by public reaction to his strategy and a desire to explore other investment ventures, he made this decision.

The best trade in history is often considered to be George Soros's shorting of the British Pound in the early 1990s, making over $1 billion. This trade, along with others by notable investors, involved highly leveraged currency exploitation.

This presentation took place at a feast given by the King to celebrate the event, who, in a well-ordered speech, admitted having been taken in by the tailor's beautiful coat, but now felt the greatest pleasure in announcing that for all time the blacksmith should be regarded as the King of all the trades.

In 2008, at the peak point of the global financial crisis, the legendary investor invested $5 billion in Goldman Sachs to strengthen the firm's capitalisation and liquidy in turbulent times. The then decision of Buffett has generated a return of roughly $3.1 billion for him.

Michael Burry is an investor who profited from the subprime mortgage crisis by shorting the 2007 mortgage bond market, making $100 million for himself and $700 million for his investors.

Who went to jail in 2008? ›

Did Anyone Go to Jail for the 2008 Financial Crisis? Kareem Serageldin was the only banker in the United States who was sentenced to jail time for his role in the 2008 financial crisis. He was convicted of hiding losses by mismarking bond prices.

Paulson is renowned for making one of the largest fortunes in Wall Street history by shorting the US housing market during the subprime mortgage crisis. He earned nearly $4 billion in 2007 and $4.9 billion in 2010. As of January 2023, his net worth is estimated at $3 billion.

Subprime mortgage crisis

Sometimes referred to as the greatest trade in history, Paulson's firm made a fortune and he earned over $4 billion personally on this trade alone. Paulson worked with Goldman Sachs to provide liquidity for low-performing home loans in Arizona, California, Florida and Nevada.

The turnover rate is 13%. In John Paulson's current portfolio as of 2024-03-31, the top 5 holdings are Madrigal Pharmaceuticals Inc (MDGL), Bausch Health Companies Inc (BHC), BrightSphere Investment Group Inc (BSIG), Perpetua Resources Corp (PPTA), Novagold Resources Inc (NG), not including call and put options.