The Greatest Trade Ever Read Online Free PDF

chairman. Paulson was transfixed as Rubin discussed making bets on mergers, astyle of investing known as risk-arbitrage, and Friedman dissected the world of mergers and acquisitions deal making.
    An avid tennis player, like his father, Paulson sometimes invited friends to the Westside Tennis Club in Forest Hills, New York, where his father was a member, to play on the grass courts that served as home to the U.S. Open. But he rarely invited friends back home, and some never even knew he was a native of Queens. For years, Paulson would simply say that he was from New York City.
    It was his classmate, Bruce Goodman, who began calling Paulson “J.P.,” a reflection of Paulson’s initials as well as a sly allusion to J.P. Morgan, the legendary turn-of-the-century banker. The nickname, which stuck for the rest of his life, spoke to Paulson’s obvious abilities, his growing ambition, and his blue-blood aspirations. Paulson smiled when he heard the new nickname, appreciating the compliment and the double entendre.
    Paulson graduated first in his class from NYU with a degree in finance. As the valedictorian of the College of Business and Public Administration, he delivered a speech about corporate responsibility. A dean suggested that he apply to Harvard Business School. Although Paulson was only twenty-two and didn’t have much business experience, he cited the lessons of his business in Ecuador in his application; he not only gained acceptance but won the Sidney J. Weinberg/Goldman Sachs scholarship.
    One day at Harvard Business School, a classmate, on the way to a meeting of Harvard’s investment club, approached Paulson, telling him, “You’ve got to hear this guy Kohlberg speak.” Paulson had never heard of Jerry Kohlberg, founder of investment powerhouse Kohlberg Kravis Roberts & Co., but he tagged along, one of only a dozen students to show up. Kohlberg, an early pioneer of so-called leveraged buyouts, brought two bankers with him, and they walked through the details of how to buy a company using little cash and a lot of borrowed money. Then Kohlberg detailed how KKR put up $500,000 and borrowed $36 million to buy an obscure company that they sold six months later, walking away with $17 million in profit.
    For Paulson, it was a life-changing experience, like seeing the Beatles for the first time, one that opened his eyes to the huge paydays possible from big investments. Paulson calculated that partners at Goldman Sachs like Whitehead and Rubin made just $500,000 that year, a figure that seemed puny next to what could be made by Kohlberg Kravis Roberts & Co.
    Jerry Kohlberg can make $17 million on just one deal
, thought an astounded Paulson.
    In his developing worldview, the acquisition of massive wealth deserved unabashed admiration. John Whitehead and Jerry Kohlberg played the game fairly, with intelligence and diligence. To Paulson, they seemed deserving of the rewards they commanded. During his second year in business school, Paulson undertook a research project to identify the key players in the leveraged-buyout industry. Upon graduation, Paulson assumed that he, too, would head to Wall Street.
    Paulson graduated as a George F. Baker Scholar in 1980, in the top 5 percent of his class. But when firms came to recruit on campus, it was the consulting firms that offered the largest starting salaries, grabbing Paulson’s attention. Wall Street was still battling a bear market. So Paulson accepted a job at Boston Consulting Group, a prestigious local firm that recruited only at upper-echelon schools.
    Early on in his new job, Paulson was asked to help Jeffrey Libert, a senior consultant, advise the Washington Post Co. on whether to invest in real estate. Paulson initially was bullish on the idea—the Paulson home in Beechhurst had increased in value over the previous two decades and housing seemed like a good investment.
    Libert, the same age as Paulson and also a native New Yorker who had graduated from Harvard