John Paulson

[winston]

The MOST IMPORTANT thing on gold you'll read all month
From Porter Stansberry in the S&A Digest:

Our foreign creditors aren't the only folks who are worried [about the U.S. dollar]. At Jim Grant's Fall Investment Conference two weeks ago in New York, John Paulson – the richest and most successful speculator since George Soros – explained his personal concerns about the fate of the dollar.

Once the Fed began directly buying Treasuries and mortgages, I lost faith in the dollar as a reserve currency for my assets... What I'm looking at is not where gold is going to be tomorrow, one week from now, one month from now, three months from now. What I'm looking at is where is gold going to be vis-a-vis the dollar one year from now, three years from now, five years from now.

And I think with a high probability at each of those points, gold will be higher than it is relative to the dollar today. That probability increases the further out you go, and the magnitude of that difference also increases the further out you go. So when I look at what the risk is, the risk to me is far more staying in dollars than it is in gold at this point.

Dear subscribers... That's not Porter Stansberry talking. That's not Doug Casey talking. That's not Bill Bonner talking. That's the richest and most respected man on Wall Street... perhaps in the whole world of finance. Right now, the dollar is the world's financial medium. Demand for the dollar comes wholly from trade and finance. Nobody needs the dollar to buy goods from the U.S. – we have a massive trade deficit.

So what do you think will happen to the demand for dollars around the world if the world's financiers follow Paulson's lead? What do you think will happen to the dollar if the world's oil traders abandon it? And what do you think will happen to our country when the average American finally recognizes these things – which are happening right now?

Lord, help us. I can only hope most of you have followed our hundreds of pleas to buy gold – and to put it someplace safe.

[winston]

John Paulson: Paulson made waves in 2008 with his billion dollar gains from the sub-prime crisis. The master wave rider was short all the way down and then reversed his bearish course in stunning fashion as he went long the very same things he made so much money betting against.

In late February he referred to the market as the “buying opportunity of a lifetime”. Paulson’s reflation trade is turning out to be another home run. Paulson clearly believes in the Fed’s ability to reflate us out of this mess.

In the last 6 months he has made massive bets on gold and gold related equities. In addition, Paulson has put his money on the opposite side of the trade he made a killing in last year – he now owns massive stakes in several large banks including Bank of America as well as the toxic Capital One Financial. Paulson is even putting together money for a “real estate recovery” fund.

His latest 13-F shows an interesting mix of financials, gold and healthcare related names. The hedging behind this allocation is quite brilliant. He owns massive stakes in defensive healthcare names, large stakes in the full blown recovery names (banks) and the gold positions will serve as a hedge against inflation and/or the doomsday scenario.

Paulson, clearly believes inflation is likely to occur in the coming years as his bets on hard assets and real estate show.

http://pragcap.com/the-guru-outlook

[kennynah]

pretty well diversified in equities and commodities...

[winston]

Wolf ! Wolf !

World's richest & most successful speculator warns of great inflation
By Porter Stansberry in the S&A Digest:

This is it. This is your last wake-up call... At a recent breakfast, John Paulson, the most successful speculator of the last 20 years, explained exactly how the great inflation will come to pass.

( of the last 20 years ? I have not heard of his name until last year ... )

Says Paulson: The banks will resume regular lending – thereby releasing all of the excess money supply into the system – within six to 24 months. Two or three years after that, we will see 12% annual inflation.

Paulson is recommending investing in gold. He's already placed more than $4 billion of his firm's assets in the metal. Why is Paulson building his position so early if he doesn't expect inflation to kick in for four years? Scarcity.

Paulson notes, of the $200 trillion of investable assets in the world, only $800 billion is gold. You won't be able to get much of that $200 trillion into gold at any reasonable price. But that won't stop people from trying.

Here's the part that sent a chill down my spine. At this breakfast, Paulson also gave a rare insight into what he's doing with his personal money. Apparently, his fund offers a special option whereby you can invest using gold. According to someone at the breakfast table, you convert your cash into gold and buy into the fund using bullion. When you cash out, you are paid in gold at the value it is worth that day. Paulson is 100% invested in this style.

When the world's most successful speculator would rather be invested in his own fund via bullion instead of dollars... you gotta wonder why you're still carrying greenbacks in your wallet.

[winston]

Fund Lessons From John Paulson By Don Dion

NEW YORK (TheStreet) -- The gut-wrenching losses during the market tumble have been felt by the savviest financiers of Wall Street, including Warren Buffet who has lost nearly $10 billion of his personal fortune.

While the losses were plentiful, some of the most daring investors were actually able to turn profit during the mess. By betting against real estate when everyone else remained optimistic, hedge fund manager John Paulson was able to net $15 billion in returns. This equated to a personal profit of nearly $4 billion. His forethought during this period has gained the admiration of other famous investors such as George Soros .

A native of Queens, N.Y., Paulson appears to have been destined to have great economic insight from birth. His maternal grandfather, Arthur Boklan, a Wall Street banker during the 1929 crash, was able to remain prosperous during the Great Depression even as the rest of the nation suffered. Paulson's father was CFO of Ruder & Finn.

After high school, Paulson attended New York University where he graduated valedictorian of his class in 1978. Upon graduation, he immediately moved on to the Harvard Business School where he graduated as a Bakers Scholar,.

Paulson headed to Wall Street, where he jumped from firm to firm. His resume includes big names such as Bear Stearns, where he worked on their mergers and acquisitions team and Gruss & Co. where he was employed as a mergers arbitrageur.

In 1994 with $2 million of his own money, Paulson started his own hedge fund company, Paulson Capital(PLCC Quote). Though $2 million in assets is considered meager for a hedge fund, Paulson was able to use his careful investing choices to build an attractive track record. During the tech bubble that burned many, Paulson gained popularity by shorting firms, betting on mergers, and most notably, not losing his clients any cash. From 1999 to 2003 he saw his assets under management balloon to $600 million

Although his success during the tech bubble strengthened Paulson's reputation within the hedge fund community, his bet on the housing market is what has put him on the map.

In 2005, while looking for the next bubble to play after tech, Paulson and his analysts were turned onto the housing market. During this time, optimism was in strong supply with mortgage companies boasting that housing prices could never fall. Believing the hype, investors pooled into collateralized debt obligations.

While the CDOs were ballooning, the prices of instruments designed as insurance policies against default called credit-default swaps were unusually low. Paulson, who was interested in finding a way to play what he perceived to be the market's inevitable downfall, saw these instruments as an ample opportunity. He began pouring his funds into CDSs while shorting CDOs.

His bet lost money in the beginning but eventually worked out handsomely. In 2007, when many were watching their nest eggs deteriorate before their eyes, Paulson was rolling in returns. His fund jumped 600% netting staggering returns.

In late 2008, the financier set up the Paulson Recovery Fund to invest in the same financial institutions that faltered during the subprime crisis, including Bank of America(BAC Quote), Goldman Sachs(GS Quote), JPMorgan(JPM Quote), and Capital One(COF Quote).

Paulson also has taken steps to help struggling homeowners in the sublime mortagage crisis. In 2009, he made a $15 million donation to the Center for Responsible Lending to support programs designed to help homeowners avoid foreclosure.

Today, Paulson remains at the helm of PLCC where continues to make bold investments in companies. Most recently, the financier placed a $78 million bet on the struggling insurer, Conesco(CNO Quote). It will be interesting to see if the investor's foresight once again proves profitable.

http://www.thestreet.com/story/10619113 ... ulson.html

[winston]

Reminds me when my wife asked me why I'm buying this or that. I will tell her that so and so is also buying or so & so has just come out with a Research Report. So even when I'm wrong. I can justify that so and so is also wrong...

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[Billionaire hedge-fund manager Jim] Paulson currently manages more than $30 billion... And he holds 15% of his fund in gold (through investments in the ETF and mining stocks).

As we've said before, when the best and most respected investor on the Street is hoarding gold like a maniacal, antigovernment conspiracy theorist, it's time to take note.

Paulson's gold position is so big (he's one of the biggest owners of the GLD exchange-traded fund) and so public, he'd have a hard time unloading... He's in this trade for the long haul. You should be, too.


Source: Porter Stansberry, S&A Digest

[winston]

John Paulson is making a huge bet on gold...

* His firm, Paulson & Co., own nearly 43 million shares of gold miner AngloGold Ahsanti (NYSE: AU) - 12% of the company.

* The firm also owns 31 million shares of Kinross Gold (NYSE: KGC) - 4% of the company.

* Paulson is the largest owner of the gold ETF, SPDR Gold Shares (NYSE: GLD), boasting 31.5 million shares. The fund is a proxy for gold, as it tracks the price of the metal.

Paulson is so bullish on gold that he believes the metal is heading for $4,000 per ounce. And he's starting a new gold fund in January. Remember, Paulson is the investor who correctly bet on the housing collapse and made billions.

However, as I told Mt. Vernon Research members last week, while Paulson's housing trade was brilliant, very few investors who have made big calls like Paulson's are able to do it again.

Still, Paulson is putting about $250 million of his own money into the fund. That smells a lot like a top for gold.

Source: Investment U

[winston]

JOHN PAULSON IS GETTING VERY BULLISH

John Paulson has done an about-face since his very bearish position last year.

First it was the reflation trade, now it is full blown bullishness. In a presentation earlier this week, Paulson said he still finds the equity markets very compelling and currently has no short positions in the credit markets – where he made a killing shorting sub-prime in 2008.

http://pragcap.com/john-paulson-is-getting-very-bullish

[winston]

Why super investor John Paulson is betting so much on gold
From David Galland in Casey's Daily Dispatch:

[On] buying precious metals, an institutional money manager friend sent over the presentation document for John Paulson’s new gold fund.

Slide #2, right after the title, presents the well-regarded money manager’s rationale for opening his fund next month. And I quote…

-Printing money will lead to paper currency depreciation

-Demand for gold as a reserve currency will increase

-Demand will overwhelm supply, causing price to rise sharply

[winston]

No interest for Paulson's Gold Fund

Just last year, John Paulson, the hedge-fund manager who made billions shorting subprime mortgages and billions more going long banks, had to turn investors away as his returns on assets under management skyrocketed. Now, he's facing the opposite problem...

Paulson launched a gold fund on January 1 to profit from inflation. After months of investor meetings and even investing $250 million of his own fortune into the fund, he's only raised $90 million.

This is partially because his flagship fund is already 10% invested in gold. And his current investors see no reason for additional exposure to metals. Still, the fact that investors aren't rushing into the fund is a bullish sign for gold. We've got more room to run.

Source: S&A Digest