The Greatest Trade Ever

The Greatest Trade Ever, written by the Pulitzer Prize-winning reporter who broke the story in The Wall Street Journal, is a superbly written, fast-paced, behind-the-scenes account of how a contrarian foresaw an escalating financial crisis, outwitting Chuck Prince, Stanley O'Neal, Richard Fuld, and Wall Street's titans to make financial history.

In 2006, hedge fund manager John Paulson saw something few others did: the housing market and the value of subprime mortgages were excessively overvalued and on their way down. However, Paulson's background was in mergers and acquisitions, and he knew nothing about real estate or how to bet against housing. He'd spent his entire career on Wall Street as an afterthought. But Paulson was certain that this was his moment to shine. He simply didn't know how to go about it. Investment bank colleagues mocked him, and investors dismissed him. Even real estate professionals who were dubious about the housing market avoided the sophisticated derivative deals that Paulson was only learning about. However, Paulson and a few other rogue investors, including Jeffrey Greene and Michael Burry, began to wager aggressively against bad mortgages and unstable financial firms. However, timing is everything. Initially, Paulson and his colleagues lost tens of millions of dollars as real estate and stock prices skyrocketed. Rather than backing down, Paulson increased his wagers, putting both his hedge firm and his reputation at risk.

The markets began to crash in the summer of 2007, providing Paulson early profits but also igniting efforts to save real estate and derail him. By the end of the year, however, John Paulson had pulled off the largest trade in financial history, earning his firm more than $15 billion- a number that surpassed George Soros's billion-dollar currency trade in 1992. Paulson gained billions more in 2008 by repurposing his audacious maneuver. Some of the underdog investors who took the risky gamble also made a fortune. Others, on the other hand, who failed due to poor timing discovered that being early and correct wasn't nearly enough.

Author: Gregory Zuckerman

Link to buy: https://www.amazon.com/gp/product/0385529945

Ratings: 4.6 out of 5 stars (from 662 reviews)

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