The Greatest Trade Ever
The Greatest Trade Ever – Gregory Zuckerman
Summary: good book that uses repetition in a constructive way to get to the bottom of how some ‘outsiders’ made billions during the housing collapse. Things I liked were that they were betting against the bank (and not only hedge funds and normal people) and that they used data to see things coming from a mile away. What was interesting is that it took very long for the bubble to burst, so if I ever want to invest against the grain, it is smart to watch when to do it.
In 2006, John Paulson organized Paulson Credit Opportunity Fund that bet against bonds backed by subprime mortgages using credit default swaps. Paulson “shot to fame and fortune” when his investment strategies paid off during the subprime housing market crash. His bet against the subprime mortgage bubble has been called “the greatest trade ever” by Gregory Zuckerman. Paulson’s involvement in the Abacus-2007AC1 deals resulted in Goldman Sachs paying a $550 million penalty, the largest ever paid by a Wall Street firm.