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The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History [Kindle Edition]

Gregory Zuckerman
4.2 out of 5 stars  See all reviews (145 customer reviews)

Print List Price: $15.00
Kindle Price: $9.99
You Save: $5.01 (33%)
Sold by: Random House LLC

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Book Description

In 2006, hedge fund manager John Paulson realized something few others suspected--that the housing market and the value of subprime mortgages were grossly inflated and headed for a major fall.  Paulson's background was in mergers and acquisitions, however, and he knew little about real estate or how to wager against housing.  He had spent a career as an also-ran on Wall Street. But Paulson was convinced this was his chance to make his mark. He just wasn't sure how to do it.  Colleagues at investment banks scoffed at him and investors dismissed him.  Even pros skeptical about housing shied away from the complicated derivative investments that Paulson was just learning about.  But Paulson and a handful of renegade investors such as Jeffrey Greene and Michael Burry began to bet heavily against risky mortgages and precarious financial companies. Timing is everything, though. Initially, Paulson and the others lost tens of millions of dollars as real estate and stocks continued to soar. Rather than back down, however, Paulson redoubled his bets, putting his hedge fund and his reputation on the line.
     In the summer of 2007, the markets began to implode, bringing Paulson early profits, but also sparking efforts to rescue real estate and derail him. By year's end, though, John Paulson had pulled off the greatest trade in financial history, earning more than $15 billion for his firm--a figure that dwarfed George Soros's billion-dollar currency trade in 1992.  Paulson made billions more in 2008 by transforming his gutsy move.  Some of the underdog investors who attempted the daring trade also reaped fortunes. But others who got the timing wrong met devastating failure, discovering that being early and right wasn't nearly enough.
     Written by the prizewinning reporter who broke the story in The Wall Street Journal, The Greatest Trade Ever is a superbly written, fast-paced, behind-the-scenes narrative of how a contrarian foresaw an escalating financial crisis--that outwitted Chuck Prince, Stanley O'Neal, Richard Fuld, and Wall Street's titans--to make financial history.


From the Hardcover edition.


Editorial Reviews

Review

"Simply terrific. Easily the best of the post-crash financial books." 
--Malcolm Gladwell

"Mr. Zuckerman is a first-rate reporter who is also able to explain the complexities of real estate finance in layman’s terms. At times, The Greatest Trade Ever reads like a thriller."
--The New York Times 

“How Paulson and a handful of contrarian investors pulled off this once-in-a-lifetime coup is the subject of The Greatest Trade Ever ... a fascinating and believable counter-narrative to the growing pile of books recounting the disastrous mistakes made by many of the supposedly smartest minds on Wall Street. It is also a surprisingly dramatic work...In The Greatest Trade Ever, Zuckerman skillfully shows how Paulson and a few cohorts anticipated a disaster and figured out a way to profit.”
--BusinessWeek

"More than a cinematic narrative of how Paulson and others figured out how to short the market. We’re also reminded of how opaque and illiquid some financial instruments are, how little Wall Street executives understood them, and how difficult it was for more knowledgeable bankers to say that the subprime emperor had no clothes."
--Bloomberg.com

"Zuckerman has a story to tell, a thread to follow, and it just happens to turn out that by following the saga of John Paulson, Zuckerman reveals all kinds of fascinating perspectives on complex finance, the real estate bubble and Wall Street and Washington's difficulties in putting the two together.”
--TheDeal.com

“A magnificent insider look at how Paulson and others profited off of subprime’s demise, detailing both the formulation and implementation of such a trade…Zuckerman’s work is both insightful and gripping.”
--Marketfolly.com

"Greg Zuckerman was the first to tell the world about John Paulson's sensational trade…He's written&#...

About the Author

GREGORY ZUCKERMAN is a senior writer at the Wall Street Journal, where he has been a reporter for twelve years. He pens the widely read “Heard on the Street” column and writes about hedge funds, investing, and other Wall Street topics. Zuckerman appears on CNBC twice a week to explain complex trades. He is a two-time winner of the Gerald Loeb Award for coverage of the credit crisis, the demise of WorldCom, and the collapse of hedge fund Amaranth Advisors, and he is a recipient of other awards. 


From the Hardcover edition.

Product Details

  • File Size: 1138 KB
  • Print Length: 322 pages
  • Page Numbers Source ISBN: B004C7F4GW
  • Publisher: Crown Business (November 3, 2009)
  • Sold by: Random House LLC
  • Language: English
  • ASIN: B002UBRFFU
  • Text-to-Speech: Not enabled
  • X-Ray:
  • Lending: Not Enabled
  • Amazon Best Sellers Rank: #91,354 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
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Customer Reviews

Most Helpful Customer Reviews
145 of 157 people found the following review helpful
5.0 out of 5 stars Fantastic Read! November 25, 2009
Format:Kindle Edition|Verified Purchase
This is an incredible book about John Paulson, and in general, the trade against the housing market. This is a great read for anyone who is interested in how an investment thesis is constructed and executed.

There were two pleasant surprises of the book:

1. Cast of Characters - How different investors, besides John Paulson, also saw the similar trade opportunity and went for it. As the crisis unfolded John Paulson, George Soros and a host of other investors were revealed to have been shorting the housing market. The surprise was learning about the host of other, "unknown" investors from a medical school dropout to a cocky Deutsche Bank trader to wealthy real-estate mogul to a recently graduated MBA, each of whom recognized the crisis before most others and were able to trade against the rest of the investment community.

2. The transformation of John Paulson - He was initially described someone who was smart, but not as someone who always "had to be the best" or a natural leader; in other words he was not the classic alpha male. John Paulson was portrayed as a random i-banker with awkward communication skills, a weak handshake and an affinity for the NYC club scene. Many actually saw his career as stalled and unexceptional. The book is very good at showing how he transformed himself from a run of the mill finance professional to someone whose ambition grew and grew....and once he saw the opportunity he calmly executed his trade and transformed his life.

(A small side note...this is also the one of the best books describing the technical terms of the housing crisis (e.g. CDS, MBS).)

Finally, even though the ending is essentially known (the collapse of the housing market), the description and narrative of the sequence of events is riveting.

A great read for anyone interested in finance, the markets, and the real estate crash.
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37 of 40 people found the following review helpful
5.0 out of 5 stars Greatest Tome On the Subprime Anti-Heroes June 2, 2010
Format:Kindle Edition|Verified Purchase
"Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally." - John Maynard Keynes.

If "The Big Short" theme was that Wall Street bond traders were corrupt and stupid and it was inevitable that they would blow up, "Greatest Trade Ever" covers the same ground but instead argues that it is nearly impossible to profit from a wildly out of consensus trade. Lewis opens his book with a quote by Tolstoy, which emphasizes that the experts could not be convinced because they know too much. Zuckerman instead opens with the Keynes quote above which explains why there are so few independent thinkers on Wall Street. The amazing thing about the subprime debacle was not that a few smart contrarians figured it out, but rather that so few did, and perhaps most amazing of all, the pain they endured during the process. (Although their massive, deserved riches may be a salve for those wounds).

The Greatest Trade Ever is mis-named. It is not really a story about a trade, but about the fascinating few people that were able to make this trade. Zuckerman, in vivid detail, helps us to understand what drove these men to bet everything they had against the rest of the world. The book succeeds on several levels. It explains the actual mechanics of how traders spotted and profited from the subprime meltdown. On a very subtle level, it gives serious investors some amazing insights in successful investing, but it is no "how-to" book. Most important, it tells the stories of these fascinating people who rode the wave.

The author compares these contrarian investors to people who climb K2 or surf Pipeline in Hawaii. In the investing world, there is no more treacherous challenge than betting against a mania.
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151 of 188 people found the following review helpful
2.0 out of 5 stars Did Paulson Himself Charter this Book? March 8, 2010
By S. Bern
Format:Hardcover
This book is a 30k foot level view of the financial crisis, poorly conceived, poorly executed. I've read just about all of Michael Lewis's books and articles covering the financial crisis, and he did a piece for Portfolio Mag. before it went under about the same topic. By the end of that article I was on the edge of my seat because he took you INTO the action, you were sitting there making a trade. I still remember Lewis's description of the traders in his article sitting in Sept. 08, shaking, watching traders leave the NY Stock exchange, knowing what they'd just pulled off. Anyway, compare that to this... the whole thing is written with an air of naivete and awestruck envy, like as if Zuckerman asked Paulson to put together a roundup of his accomplishments so the former could introduce the latter at a cocktail party or something, or Zuckerman wants to get invited to the big "bashes" he continually says Paulson hosts.

Zuckerman also looses credibility throughout the book. For example, on page 72, Zuckerman discusses Paulson's first foray into Credit Default Swaps (CDSes). After making a $500k bet, to insure $100 million, he writes "Soon their position faced some small losses. They discovered that the value of CDS protection falls as the underlying debt gets closer to maturity." OK, really? Zuckerman expects me to believe that they didn't know this? Paulson and co had been playing in derivative markets for decades, and this is standard behavior of most, perhaps all, date-based derivatives, and I think I learned this in my undergrad finance course the first week. Zuckerman gradually looses credibility like this the whole book until @ the end we wonder if he really knows what he's writing about.

Another example of the just strange reporting (p.
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Most Recent Customer Reviews
4.0 out of 5 stars Four Stars
Pretty amazing.
Published 6 days ago by Daniel C.
4.0 out of 5 stars Good Read!
Great history lesson on the cause of the Great Recession. John Paulson was one of the few people who saw the housing collapse coming and were able to profit from it. Read more
Published 11 days ago by Paul A. Schwahn
5.0 out of 5 stars Written in terms pretty easy to understand for a complicated subject
Written in terms pretty easy to understand for a complicated subject. Description of characters helps put a more personal note to the business of transactions.
Published 1 month ago by Laurie F
5.0 out of 5 stars Great Read!
The the story is written engages you in a way that you wont be able to put the book down until you finish. Absolutely amazing!
Published 2 months ago by Ricky Rod
5.0 out of 5 stars Financial Book
This book is very insightfull as to what happened and the cause when the Uninted States financial system was on the verge of a complete meltdown.
Published 2 months ago by Frank P Nicoletti
5.0 out of 5 stars Great read and a must for finance students.
I was REPO trader during the financial crisis and greatly related to many of the stories discussed. The book is written with great investigative style. Read more
Published 4 months ago by Asset Manager
4.0 out of 5 stars A must read for anyone who fancies themselves a trader
If you're curious about how to place a billion dollar bet, this book is for you. Great lessons to be learned that the author brings into the spotlight.
Published 4 months ago by coffee novice
5.0 out of 5 stars great read
Great look back at one of the most interesting times in finance. Also a great history of John Paulson !
Published 4 months ago by Kingjca55
5.0 out of 5 stars The Greatest Trade Ever
I read this book with quite a few others at the time of the financial debacle. This is very exciting for the subject and holds your
attention. Read more
Published 4 months ago by gungadin
4.0 out of 5 stars The Amazing Tenacity of Risk Takers
Zuckerman follows these wealth-builders with just the right amount of detail in a very readable fashion. Read more
Published 5 months ago by Fish 7
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More About the Author

Gregory Zuckerman is a Special Writer at The Wall Street Journal. He writes about hedge funds, big financial trades and other investing topics, and regularly pens the widely read "Heard on the Street" column. He was part of a team that won the 2007 Gerald Loeb award, the highest honor in business journalism, for breaking news coverage of the collapse of hedge fund Amaranth Advisors. And he was part of a team that won the 2003 Gerald Loeb award for breaking news coverage of the demise of telecom provider WorldCom. Greg also was part of a team that won the New York Press Club Journalism award, and he was nominated for a 2008 Gerald Loeb award, for coverage of the mortgage meltdown.

Greg appears regularly on CNBC and other networks to discuss hedge funds, stocks and financial trades, and he makes appearances on radio stations around the globe.

Greg joined the Journal in 1996 after writing about media companies for the New York Post. Previously, he was the managing editor of Mergers & Acquisitions Report, a newsletter published by Investment Dealers' Digest. He graduated from Brandeis University in 1988, Magna Cum Laude. He lives with his wife and two sons in West Orange, N.J., where they enjoy the New York Yankees in the summer, and suffer with the New York Knicks in the winter.

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Kindle Price?
Definately priced too high on Kindle--especially given hard back price & availability.
Will pass.
Nov 24, 2009 by DS |  See all 2 posts
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