What John Paulson Can Teach Us

If it wasn't clear already that John Paulson had reached the zenith of his hedge fund profession, one only had to watch how fervently the media and blogosphere digested the news of Paulson & Co.'s quarterly holdings which was released last Friday.

Market commentators immediately pounced on how the one-time housing bear had loaded up on 300 million shares in Citigroup(C) during the quarter, while dumping his entire holdings in Goldman Sachs(GS).

John Paulson

Similar 13-F holdings of other hedge fund managers like David Einhorn and George Soros filed with the Securities and Exchange Commission in recent days have been summarily ignored compared to the reaction to Paulson's. (Citi shares jumped 3.2% the day after Paulson's announcement, far outpacing the S&P and Financial index that day.)

John Paulson and The Greatest Trade Ever

As far as hedge fund managers go today, John Paulson is the man. Ken Griffin, Stevie Cohen, and Eddie Lampert and others are afterthoughts.

In Gregory Zuckerman's new book, The Greatest Trade Ever, the Wall Street Journal reporter chronicles how Paulson mounted his ascent from nobody to this industry's seer of the moment.

Seven years ago, Paulson was relatively unknown. He was a merger-arbitrage guy running $300 million dollars. The former Baker Scholar from Harvard Business School couldn't help but feel that - in his mid-40s - he had under-achieved his career potential.

A key analyst alongside Paulson was Paolo Pellegrini. A failed Lazard banker with two divorces and zero net worth at the time he joined Paulson, Pellegrini had to make this last career chance work.