Although some people were left with nothing after this crisis
it is important to note that some people made a fortune by recognising that the
housing bubble was going to burst. There are several individuals who bet
against the housing bubble and the first is John Paulson. He became one of the
richest men in the world in the space of a year through his own hedge fund. By betting
against the housing market as early as 2005 and in 2007 his fund was up 590%
net of fees. He went from owning a relatively small and unknown hedge fund in
2005 to having the third largest in the world with assets of $32 billion in
2010. Although not officially reported it is believed that the fund made $1
billion in one day in 2007.
The second is Philip Falcone who founded Harbinger capital partners and just like Paulson bet that subprime mortgages would fail. The fund made $10 billion in 2007 from this one transaction and Falcone himself brought a staggering $1.7 billion home. This guy was seriously swimming in money from being one of the only people in the world to recognise what was going to happen to subprime mortgage loans.
Kyle Bass is another hedge fund owner who made an astonishing
amount on gambling against the subprime mortgage saga. He himself made $500
million in betting against the subprime saga and he obviously has an eye for
this. He has started to bet against European countries and if Greece were to
default he is set to make a 650% profit. This link leads to a very interesting video
of an interview with him. He explains how it occurred, when he recognised the problem and then goes on to talk about the current European problem.
http://www.thedailyeconomist.com/2011/11/hedge-fund-manager-kyle-bass-lays-out.html
Warren Buffet made an extraordinary comment "Be fearful when others are greedy, and greedy when others are fearful." These three hedge fund managers did exactly this and they were wary when others were being greedy and turned out to be the winners of the crisis.
Warren Buffet made an extraordinary comment "Be fearful when others are greedy, and greedy when others are fearful." These three hedge fund managers did exactly this and they were wary when others were being greedy and turned out to be the winners of the crisis.
Thank you very much for reading my blog, I hope you enjoyed.
