Real Estate Bubble:
I take it you all remember how people lost money in 2006 when the subprime market took a dive. With it, the economy of the country followed the same steps and life became difficult for many people. Apparently, not everyone suffered from the bubble. If anything, some people made a fortune and their lives took the right turn. Here, we look at some of the ways through which these people benefited while others were relishing in lose.
Who are some of the people who made a fortune from the real estate bubble?
As aforementioned, many people made lose during this period. This makes those who benefited a special case. We look at some of them below:
Before the real estate dive, not many people knew of the Paulsen and Company. If anything, it was just another Company situated at a crowded space back in New York. Personally, many people knew John for nothing other than a man who drunk and ate good food. In fact, many people thought that he was “not put together”. Everybody knows that Paulsen faced challenges and at some point, he considered quitting. He had countable clients and his abilities received criticisms from all corners.
However, his greatest breakthrough came in early 2007 when he made $15 billion. With this, he had a personal payday of over $4 billion. There was no way he was not going to receive the credit he deserved now. While most people complained of the real estate bubble, Paulsen was obviously not feeling the heat.
Until the later years of 2006, Michael burry did not receive much of respect either. Although he was a doctor, he had an obsession in the stock market. In 2006, with a capital of $621 million, Michael knew that he was on track to becoming one of the richest people in the world. However, this was contrary to the opinion of his peers who saw nothing in what Burry was insinuating. However, he went ahead and bought “the useless credits and baseless swaps” and things got out of hand for a moment.
He finally succumbed to pressure from the investors he and he sold some of his CDS insurance. The year 2007 came as a breakthrough for burry because he was able to generate over 166% in terms of profits. This put him on course as one of the biggest beneficiaries of the real estate bubble.
The above two example are only a few of the people who made a fortune from the real estate bubble in 2006. They had the guts and the determination to go a way that many people were afraid of going and they got their reward for it.
The real estate bubble that took place in 2006 made several investors suffer extreme lose. As a result, the economy of the country went down and people suffered. However, some people like Michael Burry and John Paulsen did not feel the heat at all. Instead, they made a fortune out of the whole situation.