Greatest Trade Ever Book Review

The greatest trade ever is a book written by the award winning wall street journal columnist Gregory Zuckerman, and chronicles the on goings of how many people including John Paulson and Paulo Pellegrini were able to make financial history. It is an action packed (as far as financial moves and positions go) blow by blow account of people who were early in the trade of making the bet against the housing market, and those who were late. More so it told of the great complacency that permeated wall street. As Lahde, one of the people featured in the book puts it, behavior supporting aristocracy (people whose parents greased their way through 'prep school, yale, then the harvard MBA') and heading to the top of companies and governments made it easier for Lahde to find people stupid (perhaps greedy might be more appropriate) to take the other end of his trades. "Nearly everyone will be forgotten". He urges them to throw the blackberry away and enjoy life.

Lahde made $100 million for his clients and $10 million for himself.

Reading about interesting people such as this is worth the price of entry alone (buying the book), but you get a lot more of the inside story from Gregory Zuckerman's good writing. The book is a short read but delivers its 2 years leading up to 2008's sub prime events in detail. It explains in easy to understand fashion of what goes into CDO and CDS, which have been said by Warren Buffett to be weapons of mass financial destruction.

At its end, John Paulson made his now legendary 15 billion for his clients, pocketing about 4 billion of that for himself. His main ally who worked tirelessly with him, had 45 million in his bank account. Paulo Pellegrini profited about 175 million before taxes. The greed of wall street that had led to the bad decisions and confusion in the big bosses of the banks that are now being bailed out with tax payers hard earned money, allowed the people who bet against what the Wall Street "pros" were doing to profit immensely, provided they were not too early... and not too late to the show. Even George Soros himself set up a meeting to learn from John Paulson.

John Paulson himself, even when he was making a killing of millions and billions, still took the train or a public bus. A far cry from the private jets for the Top Tier executives at the banks.

Another noteworthy style of Zuckerman the author is the way he weaves in the other players, like Michael Burry, a self made doctor turned investor. To him, the sub prime could be said to be more than a trade that made him money, but also something that allowed him to take a hard look at what he wanted in life and an ultimately human concern about his friends who were losing their jobs and suffering from the economic down turn that the wanton banks and plutocratic elite had wrought.

If you have been at all intrigued as to what happened in the chaos of 2008, this is a good book to read.

News have it too that these days Paulson is heavily into gold, with a gold fund that performed at 35% for 2010. It is unclear whether he may go into silver too.

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Comments 2 comments

SheppardCT profile image

SheppardCT 5 years ago

I really enjoyed this book. I just finished 'The Big Short' by Michael Lewis, and I preferred TGTE more. Interesting to note that rumours are spreading that Paulson has changed his view on Gold and may indeed be selling at what he thinks is the top. The market moved down on these rumours; a further demonstration of how far John Paulson has come since 2007.


Csjun89 profile image

Csjun89 4 years ago Author

I read both books too, Paolo was the brains and Paulson simply had the piggy bank to afford the trade. With Paolo leaving I guess Paulson is on more difficult tides.

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