- Don’t follow the crowd.
- Have an exit strategy before the bubbles burst
- Focus on the debt markets for predicting the future.
- Take the time to figure out how fancy new investment products like credit default swaps (CDS) work.
- Buy insurance. No one wanted out of the money puts on the housing market.
- Remember the past. Some of the big winners in the housing crash were those dismissed as out-of-touch dinosaurs.
- Remember that no trade lasts forever so don’t fall in love with your investment. After making his $20 billion. Paulson went long banks at the bottom. (The verdict is still out on this trade).
- Timing is everything and luck helps.
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