Tuesday, December 15, 2009

More Than a Trade: Career Tips from John Paulson (But Wait! There's More!)

From the Wall Street Journal's fins (Finance Careers):
It's tempting to paint John Paulson as an overnight success story.

But the 54-year-old hedge-fund manager didn't simply hit the jackpot in 2007, the year his firm earned more than $15 billion on a risky bet that the real-estate market would implode. It took unwavering self-confidence, unique perspective and disciplined focus -- strengths refined during his two-decade-plus career prior to the trade.

Despite that perfect trade, Paulson has had a less-than-perfect career. It was marked by mostly minor-league wins and a tamer lifestyle compared to celebrated hedge-fund managers like Steve Cohen of SAC Capital Advisors and Kenneth Griffin of Citadel.

Few would have tabbed Paulson as the stuff that legends are made of. But his underdog status arguably lent him the perspective, maturity and guts to become a successful contrarian trader.

"It's as much a story about the evolution of a man," said Wall Street Journal reporter Gregory Zuckerman, author of "The Greatest Trade Ever," a book that chronicles Paulson's historic trade. Zuckerman attributes Paulson's achievement as much to his developed sense of focus as his innate talent for numbers.

"He had real ups and downs in his career and never really stood out," said Zuckerman. "It gives you encouragement that you can spend a career without getting much credit and still have time to make history."

FINS recently caught up with Zuckerman to discuss what advice can be gleaned from Paulson's career. Here are seven tips for those looking to succeed in the hedge-fund business.

1. Keep Your Eyes Wide Open
Always keep an eye out for potential opportunities.

While Paulson was content with hitting singles, he kept looking for the big score, said Zuckerman.

He has honed this skill since his student years. Lost in college, Paulson took two years off from New York University and lived in Ecuador where he discovered attractive but inexpensive local goods. Acting as a U.S. sales representative, Paulson pocketed a handsome commission from the venture, which helped motivate the young businessman return to school to study finance.

2. Swing Big
Take advantage of a good opportunity when you see it and make it count. Paulson chose to follow an expression once used by veteran investor George Soros years earlier to "go for the jugular."

Paulson had the guts not just to place himself against the market grain, but to do it with both feet firmly planted.

"Not everybody took that next step to make money off it," said Zuckerman, referring to the weakening real-estate market. "You really have to take advantage when you're at bat, because you usually get only one chance to hit the ball out of the park.">>>MORE
As seen on MarketBeat. And boy can it catch fish.
[you've lost it -ed]
Ya know, I'm getting tired of the constant sniping. I was making a slightly ADDled reference to someone who kept his eyes open and swung big, Ron Popeil, he of the Veg-o-matic and the Pocket Fisherman. Geez.
Now he's got a nice piece of property up for sale and I thought our readers should know about it. From the Los Angeles Times:
Ronco inventor and pitchman Ron Popeil lists his Beverly Hills home at $5,995,000
Inventor and master pitchman Ron Popeil, who sold his Ronco marketing company in 2005 for $55 million, has listed a gated Beverly Hills home for sale.

The English country-style house sits on more than an acre containing a lighted north-south tennis court, a large pool with a deck area and a two-story guesthouse. There are six bedrooms and 8 1/2 bathrooms in 4,555 square feet of living space.

But wait, there's more!

The main house has elaborate wood ceilings, extensive French doors and windows, dramatic slate floors and mountain and canyon views. The kitchen center island can easily seat six. Brick patios and terraces expand entertaining space outdoors.

Now how much would you pay?

Popeil, 74, is asking $5,995,000. But perhaps he'll consider three easy installments.

A fixture on infomercials and late-night television for decades, he promoted products including the Veg-O-Matic, the Inside-the-Shell egg scrambler and Ronco's Good Looking Hair Formula 9 spray-on hair, many of which were invented by his father, Samuel Popeil, or himself.

The Chop-O-Matic helped launch Ron Popeil in television, which proved to be an effective way to demonstrate the device to mass audiences.

Drew Mandile and Brooke Knapp of Sotheby's International Realty, Beverly Hills, have the listing.
Kudos to Lauren Beale for a great bit of classified ad writing.
Here's the listing at Sotheby's.
Here's the quote that ties it all together:

“My philosophy is, When you snooze, you lose.
If you have a great idea, at least take the chance and put your best foot forward.”
Ron Popeil
[sorry -ed]