Of course it´s 2nd rate journalism - as always you have to read between the lines... Another important part of "the" trade : The index weakened in the second half. By year end, the new Paulson Credit Opportunities Fund was up about 20%. Mr. Paulson started a second such fund. How many traders do you know aggressively leveraging a position when resuming "the" trade ? George Soros and others made fortunes being "convinced" of certain assessments but also because they were aggressive and decisive in doing so ! Congrats to Paulson, btw !
Phenominal trade, though I think he made a mistake with being so public about his winnings. After all, they were made betting against housing market, and when scape goats will be needed for the whole subprime mess, he might be looked at.
Not to mention the 150 reality TV shows called Flip this House ! lol In his defense timing was everything and you have to give him that.
one more thing, there were probably many traders that implemented that same stratagy but were early and ran out of funding. this guy Paulson had the advantage of obtaining more money to keep his bet alive.
Just a quick side note, Microsoft One note is my favorite product for keeping a complete reseach file on all these types of interesting articles. You can make an exact copy, paste it in your notebook, Label, keep your own notes, shift it into different notebooks as you need to. Paperless, portable, and easy to use! Just an all around great product. Thanks for the link, Nitro, a great read!
It's interesting. I read all the time about cutting losses, but I still have to see a comment about this part of the article: Housing remained strong, and the fund lost money. A concerned friend called, asking Mr. Paulson if he was going to cut his losses. No, "I'm adding" to the bet, he responded, according to the investor. He told his wife "it's just a matter of waiting," and eased his stress with five-mile runs in Central Park. "Someone from more of a trading background would have blown the trade out and cut his losses," says Peter Soros, a George Soros relative who invests in the Paulson funds. But "if anything, the losses made him more determined."