5 Legendary Investors Who Made Billions During the Global Financial Crisis
During the 2007-2009 financial crisis, several investors made remarkable profits through strategic investments while markets were falling. Here's how five notable investors capitalized on the downturn:
Warren Buffett speaking at podium
The Crisis Overview The 2007-2009 financial crisis began with the U.S. subprime mortgage market collapse, leading to the worst economic downturn since 1929. As panic spread, many investors saw their portfolios drop by 30%, creating unprecedented buying opportunities for those with capital and courage.
- Warren Buffett Famously declaring he was buying American stocks in October 2008, Buffett invested:
- $5 billion in Goldman Sachs preferred shares (10% interest rate)
- $3 billion in General Electric preferred stock
- Additional billions in Swiss Re and Dow Chemical
Warren Buffett speaking at podium
- John Paulson Made an estimated $20 billion betting against the U.S. housing market, then pivoted to recovery investments:
- Large positions in Bank of America
- Two million shares in Goldman Sachs
- Significant stakes in Citigroup and JP Morgan Chase
John Paulson speaking at outdoor event
- Jamie Dimon Led JP Morgan to acquire:
- Bear Stearns for $10 per share (85% discount)
- Washington Mutual at a fraction of its value These acquisitions tripled JP Morgan's share value over the next decade.
Businessman speaking at conference podium
- Ben Bernanke As Federal Reserve chairman, his actions led to:
- $82 billion in Fed profits (2010)
- $3.5 billion from Bear Stearns and AIG assets
- $45 billion from mortgage-backed securities
- $26 billion from government debt holdings
Man in business suit with receding hairline
- Carl Icahn Specialized in distressed assets:
- Purchased Fontainebleau property for $155 million
- Sold it for nearly $600 million in 2017
- Previously profited from Las Vegas gaming properties during downturns
Carl Icahn headshot close-up
Key Success Factors These investors succeeded by:
- Maintaining calm during market panic
- Identifying undervalued assets
- Having capital available when others didn't
- Taking contrarian positions
- Understanding market cycles
Their experiences demonstrate that significant market downturns can create extraordinary opportunities for investors with the right strategy and temperament.