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John Paulson

Landov

John Paulson

President, Paulson & Co.

The subprime mess didn't wallop everyone. In 2005, Paulson had doubts about the widespread euphoria in housing markets, so he launched funds to bet against mortgage-backed collateralized debt obligations. The funds shorted the ABX subprime index and bought undervalued "insurance default swaps"—that is, insurance against CDO default. When the housing market took a spill, Paulson's bet paid off to the tune of a $15 billion profit in 2007.