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I have to agree with the idea that he just got lucky. If he was really so sure of his assessment back then then why didn't he short sell a bucket load of these

• jakarta 17y ago
  He came up with the credit default swap trade where you buy insurance against mortgage backed securities failing. This was really a great trade because his losses were capped at around 5% a year while his upside was huge, imagine a 6:1 payout.
• anamax 17y ago
  > If he was really so sure of his assessment back then then why didn't he short sell a bucket load of these mortgage backed securities? "The market can stay irrational longer than you can stay solvent." is the traditional response. The problem was "obvious" in 2001.