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John Paulson on Pace for Another Losing Year

December 04, 2012 | About:
matsandalex

matsandalex

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Investors in John Paulson's firm are getting impatient as the fund is down for a second year in a row. Last year the fund was down 53%. This year the fund is down 19% as Paulson's main fund is down 13%. Paulson will struggle to meet his high water mark as the S&P is up 14%.

Paulson has been stung by the mine unrest at AngloGold (AU) in South Africa. His positions in gold bullion have been relatively flat.

Paulson has been bullish on gold over the last few years.

“I view gold as currency, I was not interested in it as currency until quantitative easing,” said Paulson in 2010. Paulson also explained why any talk of gold being a bubble is preposterous right now. Paulson’s key point is that gold ownership is incredibly low.

For example, it is estimated that pension fund holdings of gold are between 0.15% and 0.5%. In the past, pension fund holdings were close to 5%. In other words, how can gold be a bubble if it is such a small percentage of the financial asset landscape?


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