What is the number 1 trading secret of the most successful and wealthiest hedge fund managers? Its Asymmetrical investing. What is asymmetrical investing? Its a low risk trade that also has the potential for huge or unlimited upside. Think John Paulson in 2007.
Paulson bought cheap credit-default swaps on subprime-mortgage assets, his capital risk was relatively small but the potential payout, huge. Paulson’s asymmetric trade made an almost 700% gain in 20007.
Another example, Jeffrey Altman of Owl Creek, in 2008 Altman purchased millions of Fannie Mae and Freddie Mac preferred shares for 2 cents on the dollar, today the preferred shares of Fannie Mae and Freddie Mac sell for almost 40 cents on the dollar, a 2000% return.
At Billionairesportfolio.com all we do is look for asymmetric trades, in fact right now we have two stocks in our portfolio that I think have the potential to return 300% or more by the end of 2014.
President of The Billionaires Portfolio