The Greatest Trade Ever focuses on John Paulson as well as a few others who bet against subprime mortgages during the financial crisis in 2007 and 2008. This book is eerily similar to The Big Short by Michael Lewis, with one exception. Michael Lewis left out John Paulson, which is an unforgivable exclusion. Paulson made more money than anyone else who bet against risky mortgages. His hedge firm made $15 billion in 2007 alone. He personally made $4 billion because of how much of his own money was invested in the fund. He made billions more in the next few years. It literally was the greatest trade ever.
If you are interested in specifics of the crisis, I recommend reading my post about The Big Short. I tried to explain the issues as simply as I could. I thought The Greatest Trade Ever and The Big Short did a good job explaining terminologies and concepts. Much of the language is consistent. Many of the characters are the same. The biggest difference is The Greatest Trade Ever spends more time on John Paulson. For me, reading The Greatest Trade Ever was straightforward because I understood many of the things the author discussed from previous readings. For a first time reader on this crisis, the book would be a very slow read.
Something unique to Paulson's story is how well thought out his trades were. Paulson was a merger expert; he knew next to nothing about the mortgage industry (in fact, most who bet against risky mortgages were outsiders to the industry). As he started placing his bets, he began to wonder who was taking the other side. When he figured it out, he shorted all of those companies. Then he saw the government begin to step in and quickly realized gold would soar as the dollar would weaken. It seems obvious now, but he took the risks and was rewarded with unfathomable wealth.
My rating for The Greatest Trade Ever: 5 stars out of 5. Get it here!
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