Billionaire John Paulson haggles for own portrait

When it comes to insights into John Paulson, the hedge fund manager investing millions in three Las Vegas gaming companies, the last place I’d think to look would be Vanity Fair.

But the July edition has an intriguing story (not available at the magazine's website) about how Paulson and other hedge fund managers negotiated with artist Peter Max to get the best price for their portraits. The article “When Go-Go Met Day-Glo” was an excerpt from the upcoming book “The Zeroes: My Misadventures in the Decade Wall Street Went Insane” by Randall Lane.

Lane describes how, when he was editor of Trader Monthly, he tried to make money by having Max do portraits of five men he dubbed “billion-dollar earners.” Max would paint their portraits and split the money with Trader Monthly, after donating some to charity.

Paulson, who has invested millions in MGM Resorts International, Boyd Gaming and Harrah’s Entertainment this year, was one of the five.

The article described how each man gave Max a photograph to start the process. Paulson chose a serious shot, “a picture of him looking directly, solemnly into the camera, a necktie tight at his cutaway collar, thick plastic frames atop his nose, even though he appeared in most pictures — and at our party — without glasses,” Lane wrote.

After the party honoring the guests, Paulson wanted to buy the four portraits of himself. He was quoted a price of $140,000 for all four but said he’d pay not a penny more than $110,000.

Lane wrote: “Some perspective: $140,000 to John Paulson, coming off an almost $4 billion year, was the equivalent of about two bucks to someone making $60,000 a year.”

After some haggling, Paulson got the work of a world-famous pop artist at the price he set.

Not one of the men paid full price, Lane wrote.

It wasn’t like they were cheapskates, but it’s what they are, it’s the life they lead as investors/gamblers/negotiators/dealmakers — however you want to describe hedge fund guys.

While I’d feel like a cheapskate talking a world-famous pop artist down in price, Paulson is just doing what comes naturally. That may be why he earns billions … and I merely write about people who earn billions, and indulge in Vanity Fair, pretending I only read it for the political articles.