Forbes - Hedge fund kings like John Paulson and Lee Ainslie just made a killing in two junk-mortgage insurers, and the awesomeness of their quick gains will compel other investors to follow. It’s important to remember that high returns like this usually come with high risks, and these recently-revived companies are no exception. But let’s take a moment to drool at a stock chart anyway.
Paulson acquired 17 million shares of MGIC (MTG) in the first quarter and has already doubled his money. He also purchased 8 million shares of Radian Group (RDN) then, and the shares are up 53% on his average buying price. Several other fund bigwigs joined in the first quarter sector buying, including George Soros, Ainslie’s Maverick Capital and Legg Mason’s Bill Miller.