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Business School, showed Paulson a chart mapping the impressive growth of housing prices over the previous few decades. But when Libert factored in the rise of inflation over that period, the annual gains for housing turned out to be just 1.5 percent. Unless you can find an inexpensive home or building that can be purchased for less than its replacement cost, Libert argued, real estate isn’t a very attractive investment.
    “I was amazed to see that,” Paulson says. “I wasn’t an investor, so it didn’t have meaning at the time, but the low rate of growth always stuck in my mind.”
    The work Paulson did at Boston Consulting Group was research intensive, and he excelled at it. An upbeat presence in the office, he flirted with the secretaries and other women in the office, most of whom liked Paulson much more than his less-approachable colleagues. But Paulson quickly realized he had made a mistake joining the firm. He wasn’t investing money, he was just giving advice to companies, and at an hourly rate no less. To other executives at the firm, Paulson seemed out of place and uncomfortable.
    “John would say, ‘How can I make money off this’ while others were giving advice,” Libert remembers. “BCG was really about a bunch of geeks sitting around seeing who’s smarter than the next guy, and that made him impatient. He seemed to have an instinctual sense of how to make money.”
    Paulson, for example, was taken with the story of Charlie Allen Jr., a high-school dropout who built an investment firm, Allen & Co., into a powerhouse in the first half of the twentieth century. “The shy Midas of Wall Street,” Allen took taxis while members of his family enjoyed chauffeured Rolls-Royces. In 1973 Allen’s firm took control of Columbia Pictures after an accounting scandal left it weakened, then sold it to Coca-Cola nine years later in exchange for Coke stock. Later Coke shares soared and Allen pocketed a billion-dollar profit. (Years later, Paulson would recall details of the transaction by memory, as if reciting the batting average of a favorite baseball player.)
    Paulson wanted to move to Wall Street. But when he applied for various jobs, he found that his consulting experience accounted for very little. He didn’t want to start at the bottom of the ladder with recent grads, placing him in a quandary. At a local tennis tournament, Paulson saw Kohlberg in the stands and approached him, telling the LBO doyen how much he had enjoyed his lecture at Harvard. Kohlberg invited the young man to drop by his New York office.
    At their meeting a few days later, Paulson confided to Kohlberg, “Iwent into the wrong career.” He asked for Kohlberg’s help in finding a position on Wall Street.
    Kohlberg didn’t have any openings at KKR. When Paulson asked if Kohlberg might introduce him to other heavy hitters in the buyout world like Leon Levy at Oppenheimer & Co., Kohlberg picked up the phone and got him an appointment.
    A few weeks later, Paulson went to Levy’s Park Avenue apartment for an interview. He had never seen anything like it before—everywhere he looked he saw antiquities, collectibles, and objets d’art. Paulson couldn’t help but gawk, unsure if the busts around the home were Roman, Greek, or of some other origin he knew even less about. Paulson worried that if he moved too quickly in any direction, he would knock over one of Levy’s priceless pieces, a move unlikely to further his career. Sitting down, carefully, he began to talk with Levy, sipping coffee from delicate fine porcelain. It turned out that Levy was looking to expand his firm and needed a smart associate. By the end of the day, Paulson had landed a job.
    Paulson was so eager to leave the world of consulting that he hadn’t thought to ask many details about the firm he had joined. It turned out that Paulson had been hired by Oppenheimer, a partnership that owned a larger brokerage firm as well as an investment operation run by Levy and Jack