It's hard to be rich

The trials of a successful investor:

A few months ago I had dinner with an old friend who told me an amazing story.

Two years before, a nice guy with no experience at all in real estate had come to him and said that there was a fortune to be made betting against the U.S. housing market. This fellow hoped to raise money for a hedge fund whose sole purpose was to do this, by shorting the subprime mortgage market. He asked my friend to invest with him but my friend turned him down. Now my friend felt foolish.

``It all happened exactly like he said it would happen,'' he said. ``In every single detail.''

The hedge fund creator's name was John Paulson. And -- as Bloomberg News's Jenny Strasburg and Anthony Effinger and the Wall Street Journal's Gregory Zuckerman laid out recently -- by making between $3 billion and $4 billion for himself in 2007, he appears to have set a Wall Street record.

In the long history of money-making, no one has ever made so much so fast. As the Journal story also showed, Paulson's instincts now tell him to lay low and avoid calling attention to his fantastic triumph over his fellow Wall Street man.

He got lucky. One of the reasons there are so few short selling hedge funs is the old trader's adage: the market can stay irrational longer than you can stay solvent.