John Paulson’s investing philosophy is based on making sector bets according to his interpretation of the macroeconomic picture. The strategy paid off well when he made $3.7 billion in 2007 shorting the subprime mortgage market and another $5 billion in 2010 primarily by betting on gold. Times have been less spectacular since then, with his funds losing 36% in 2011 by being too early in financials and returning 1% in 2012.