The men who called the markets right

It has been a terrible 12 months for investors. It didn’t make much difference whether you invested in stocks, commodities or corporate bonds, the chances were you took a hammering. Even gold failed to sparkle as the credit crunch cut a swath through every kind of asset class.

And yet there were a few individuals who managed to make fortunes as the markets tumbled. In the US, John Paulson cleaned up by betting big against the subprime mortgage market. Over here, amid the general gloom along Mayfair’s Hedge Fund Alley, there were a couple of money managers who could still afford somewhere better than Pret a Manger for lunch. BlueGold rode commodity markets to perfection, making money on the way up and on the way down again. Mulvaney Capital fired up its computerised trading system to double its investors’ money during 2008.

In any market that’s moving violently, there will always be people who are making money while others are losing it. There are two parties to every trade, after all. But the tiny handful who called this market right are interesting for two reasons. They tell us something about the kind of investments that triumph in extreme conditions. And they are likely to be the gurus for the next decade. Hedge fund managers such as George Soros and Jim Rogers are still listened to because of the huge sums they made in the recession of the early 1990s. An earlier generation followed every word from Jim Slater, a share investor who made a pile in the early 1970s.

In years to come, it is the likes of Paulson whose words will move markets. Whatever markets are doing, there are profits to be made if you can get yourself on the right side of the trade.