The Greatest Trades of All Time: Top Traders Making Big Profits from the Crash of 1929 to Today

CHAPTER 6

John Paulson: The Greatest Trade of All Time

John Paulson was relatively unknown to the retail investing public up until the financial crisis of 2007-2009. Paulson's upbringing and background was pretty average and not your typical “stuff of legends.” Born in 1955 in Queens, New York, he attended Public Schools 193 and 194 and Bayside High School, participating in the gifted-class programs. After graduating from high school, he attended one of the top business schools in the world of finance, New York University's College of Business and Public Administration (now known as Stern Business School).

After finishing his undergraduate degree at NYU, Paulson earned his MBA from Harvard Business School, where he was designated a Baker Scholar for graduating in the top 5 percent of his class. It was time for Paulson to begin climbing the corporate ladder. Paulson went on to become the largest merger arbitrage specialist and major player in many M&A and event-driven transactions. Little did anyone know that nearly 25 years after beginning his career, John Paulson would become one of the richest men in the world because of one trade.

PAULSON'S EARLY CAREER

Paulson earned his chops by beginning work as a management consultant at Boston Consulting Group, the firm behind the famous “growth-share matrix,” which helps companies identify how to best allocate cash within their business.

He spent 1980 to 1982 at Boston Consulting Group before moving to Odyssey Partners, a smart, sophisticated ...