The Business On... John Paulson, founder, Paulson & Co

He's the modern-day King Midas, right?

Or so we thought. Mr Paulson came to prominence during the credit crisis with a series of bets on financial disaster that netted him and his funds tens of billions of dollars. But it appears Mr Paulson is not infallible: his company has just lost $500m on a Chinese forestry investment.

Chinese forestry?

Yes. Mr Paulson's fund was the largest single investor in Sino-Forest, one of several Chinese forestry companies now listed on foreign stock exchanges. Its share price has been plummeting in recent weeks following allegations of accounting failures. That prompted a rethink at Paulson & Co, which has now sold its entire holding, crystallising losses of half a billion dollars.

Goodness. So is he on his uppers now?

Hardly. Paulson & Co still has assets of $37bn and Mr Paulson himself is thought to have personally earned $10bn between 2007 and 2010. Forbes magazine puts his personal wealth at $11bn. Still, this loss is further ammunition for those who worry about the volatility of Mr Paulson's investments.

It's not a one-off, then?

Well, this is certainly an especially dramatic example of how large bets can go spectacularly wrong. But Paulson & Co is not having a good time of things generally just now. Its flagship fund fell by 6 per cent in May and is close to 8 per cent lower since the beginning of the year.

So what's Mr Paulson's story?

Now 55, he has the obligatory Harvard MBA, started out at Boston Consulting Group and worked for several big-name Wall Street firms before setting up on his own in 1994.

And what does he do with all his money?

He has homes in New York and Aspen, Colorado, and is a philanthropist too. His most recent endowment was a £2.5m donation to the London School of Economics, which will pay for the John A Paulson Chair in European Political Economy. Look our for the Russian forestry course module on the syllabus.