Paulson is a hedge fund manager and a billionaire with an estimated net worth of $11.2 billion.
His biggest position was the SPDR Gold Trust ETF (GLD). He held 21.7% of his latest portfolio in the ETF. The second biggest stake was Anglogold Ashanti Limited (AU) with a 5.4 percent share.
What you can learn from his investment strategy which is strongly focused on gold stocks, especially mining companies, is that you need a greater diversification to avoid big losses. You can push if your investment theme grows strongly and money flows come in. You make money so fast, and it feels really good that you might forget the risks. But every boom will have an end. Nothing grows to heaven without a correction.
If you make gains with your investments, a good rule to hedge your gains is to reduce your stake partly and invest the free money into new investment projects. I personally sell stocks with a gain of more than 100% if several triggers are fulfilled. The rest of my money is a product of trading and it’s no pain for me if the stake loses value.