A fascinating piece from Bloomberg:
“First came the big
short. Then, for Milan Patel, came the big long.
With the financial
crisis raging in January 2009, Patel and a handful of colleagues hit upon the
trade of their life: They would put up their own money to buy the complex
securities that everyone else was dumping. By the time they sold, they’d racked
up returns of as much as 800 percent, turning bonds trading at pennies into
millions of pounds. The twist is that much of what they were buying -- toxic
asset-backed debt-- was the kind of paper they’d loaded onto the books of their
employer, HBOS Plc. Those securities helped sink an institution founded the
year after the Bank of England.
If investors like
Michael Burry shot to fame and fortune for their bets against the crowd -- now
celebrated in “The Big Short” -- Patel’s tale is a timely reminder of keeping
your nerve when all around you are losing theirs.”