- Cornwall Capital
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Cornwall Capital is a New York City based private financial investment corporation.[1] It was profiled in the book The Big Short by Michael Lewis as one of a handful of investors in the world that correctly foresaw and profited from the subprime mortgage crisis of 2007.[2][3][4]
Cornwall Capital was founded in 2003 by then 30-year olds Charles Ledley and James Mai in a garage in Berkeley, CA with $110,000 in capital.[4] Within 2 years they had grown their capital to $15 million by shorting stocks and investing in other companies, worldwide, which they believed were undervalued due to the inability of the market to account for sudden and unexpected change. That is, option prices are set according to past stock performance, and do not take into account unusual or "Black Swan" events that may occur in the future. By finding potential Black Swan events, they were able to make stunning returns in short periods of time.[4]
Cornwall Capital saw and shorted the subprime mortgage crisis before most other people saw it.[4] They were one of a few investors who saw and shorted the sub-prime mortgage market prior to the 2007 collapse; according to Michael Lewis, they were perhaps one out of 20 in the world who did so.[4] This has since gained them attention by way of Michael Lewis' book The Big Short (2010) which retells their story.[4] The enterprise was estimated to be worth $200 to $300 million in 2010.[5]
Notes
- ^ Cornwall Capital, official website.
- ^ All geek to them: A handful of outsiders come out of the crisis in credit, The Economist, Mar 18th 2010.
- ^ Hardy Green. "Michael Lewis’ Big Short an unsettling experience". Reuters, March 11, 2010.
- ^ a b c d e f Michael Lewis. The Big Short, W. W. Norton, 2010. ISBN 978-0393072235
- ^ Interview with Michael Lewis. Transcript of interview with Michael Lewis, included in the Audio version of The Big Short.
External links
- Cornwall Capital, official website.
- All geek to them: A handful of outsiders come out of the crisis in credit, The Economist, Mar 18th 2010.
Categories:- Investment companies of the United States
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