04-18-2019, 04:48 AM
Or he just got lucky....
A lot of people made similar bets on the tech bubble in the late 90's. The common excuse was "I wasn't wrong, I was just early" to explain big losses. Time it wrong and you're an idiot. Time it right and you're a genius. A lot of people saw housing overvalued at that time. Not a lot made big bets at the right time.
And I met Paulsen back in 2004. His core strategy was merger arb. I asked him how did he hedge his risk. He told me the only thing he'd found was to short mortgage backs. I'll skip the technicals and say THAT was genius - I literally said "wow, that's brilliant". So he made a very lucky, and lucrative, bet for arguably the wrong reasons. Of course, that's not how he would describe his thinking years later.
A lot of people made similar bets on the tech bubble in the late 90's. The common excuse was "I wasn't wrong, I was just early" to explain big losses. Time it wrong and you're an idiot. Time it right and you're a genius. A lot of people saw housing overvalued at that time. Not a lot made big bets at the right time.
And I met Paulsen back in 2004. His core strategy was merger arb. I asked him how did he hedge his risk. He told me the only thing he'd found was to short mortgage backs. I'll skip the technicals and say THAT was genius - I literally said "wow, that's brilliant". So he made a very lucky, and lucrative, bet for arguably the wrong reasons. Of course, that's not how he would describe his thinking years later.
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