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Whale Week: John Paulson

Monday, 28 Jul 2008 | 6:48 PM ET

Fund manager John Paulson made billions betting against subprime-backed securities. Should you trade in his wake?

Background

Few animals are as notorious as killer whale John Paulson. He learned to swim in the rough seas near Queens, New York.

Now he's a blood-thirsty predator who is unafraid to swim against the currents of Wall Street. Just last year he bet against the U.S. housing market.

Whale Week: John Paulson
Discussing how you can trade like Wall Street's biggest whales, with the Fast Money traders.

In fact, Paulson scored the largest one-year kill in Wall Street history at $3.7 billion as the rest of the school was harpooned by worthless housing-backed assets.

Today you’ll find this killer whale trying out a new move; buying the very prey he victimized- the financials!

Paulson's new fund will provide a capital lifeline to firms critically wounded by writedowns. This savvy predator could end up playing both sides of what could be the biggest financial storm ever on Wall Street.

Now that you have a little background, should you trade in his wake?

Trades

If John Paulson got long anything I would go with him, says Karen Finerman. And I think the market would go with him, too.

I want to see more from him before I make that decision, counters Jeff Macke. As far as I can tell he got one trade right, it just happened to be a big one!

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In case you're curious, as of March 31st, John Paulsons’s top five holdings were Yahoo!, Boston Scientific, Mirant, Navteq and Kinross Gold.

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