Not Everyone Lost Money During The Financial Crisis

The current economic recession is the longest and deepest downturn that most of us have seen in our lifetimes. The truth it, it's the most severe one since the Great Depression, and it's been appropriately termed the Great Recession.

We have seen lots of banks close, companies deemed "too big to fail" have been bailed out, consumer sentiment has plunged, and things have generally been pretty bad. But what if I told you that some people have made fortunes in this exact same economic situation that we are complaining about?

This guy's name is John Paulson, and he's considered to have pulled off the greatest trade ever. Now of course, this might sound like an incredible boast, that can't be backed up by any substantial figures. Well this guy, thanks to his anticipating of the collapse of the housing market, walked out of that trade with a couple billion dollars in his bank account. That handily beats George Soros's performance, which "only" netted him one billion dollars.

John Paulson is not the only one. A handful of other investors had also bet against the market and have reaped huge financial rewards as a result. This is just a reminder that when everyone is headed in the same direction, sometimes it pays to head in the opposite direction because when it comes to financial markets, there's no such thing as the wisdom of the crowds. On the contrary, once an investment vehicle is being adopted by everyone, you can be sure the decline is not far behind.