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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 (NYSE: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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