John Paulson
Made $15 Billion Betting Against Subprime Mortgages
John Paulson
Event-Driven & Macro
Key Stats
Net Worth
$3+ Billion
Origin
American
Lifespan
Born 1955 (71 years old)
Biography
John Paulson made the greatest trade in financial history by betting against subprime mortgages before the 2008 financial crisis. His fund made $15 billion in profits, with Paulson personally earning $4 billion in a single year.
The Greatest Trade Ever
In 2005-2006, Paulson recognized that the housing market was a bubble built on unsustainable subprime lending. He created a fund specifically to short subprime mortgage securities through credit default swaps.
Historic Profits
When the housing market collapsed in 2007-2008, Paulson's bet paid off spectacularly. His funds gained $15 billion, making it the largest one-year profit in financial history. The trade was chronicled in Gregory Zuckerman's book "The Greatest Trade Ever."
Investment Philosophy
Paulson's approach combines deep fundamental research with the patience to wait for asymmetric opportunities. He looks for situations where the downside is limited but the upside is enormous.
Trading Philosophy
"Many investors make the mistake of buying high and selling low while the exact opposite is the right strategy."
Famous Trades
Subprime Mortgages (CDS)
Shorted subprime mortgage securities through credit default swaps, generating the largest single-year profit in hedge fund history.
Historic Profit
+$15 Billion
Legendary Quotes
"Many investors make the mistake of buying high and selling low while the exact opposite is the right strategy."
"The key to success is to identify trends early and position yourself accordingly."