Oh to have invested in this.

Paul Kedrosky has a post about two "contrarian" investors.

Paulson & Co. and Scion bet that the lowest quality subprime mortgages would see higher defaults than anyone expected; both have done so well that you can be sure they're chanting "Don't go! Don't go" in front of their Bloombergs.

How well have they done? Well, Paulson & Co. is up a staggering 435% in the first nine months of 2007, an astounding figure for any fund, but double-astounding for a firm running $24-billion in assets.

Both Paulson and Scion now say they are winding down some of their negative bets in residential mortgage-backed securities, and they're moving on to bets against corporate debt.

Oh, to have been in their syndicate. Also to have seen the reaction from their counterparties a) when they placed the bets and b) when they closed them.

posted by John Wilson @ 9:37 AM Permanent Link newsvine reddit



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