John Paulson

John Paulson

Last Update: 06-06-2016

Number of Stocks: 94
Number of New Stocks: 21

Total Value: $13,199 Mil
Q/Q Turnover: 7%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

John Paulson' s Profile & Performance

Profile

John Paulson is the President and Portfolio Manager of Paulson & Co. Inc. Paulson was ranked by Absolute Return Magazine as the 3rd largest hedge fund in the world managing approximately $29bn in merger, event and distressed strategies. Mr. Paulson received his Masters of Business Administration with high distinction, as a Baker Scholar, from Harvard Business School in 1980. He graduated summa cum laude in Finance from New York University's College of Business and Public Administration in 1978. Prior to forming Paulson in 1994, John was a general partner of Gruss Partners and a managing director in mergers and acquisitions at Bear Stearns.

Investing Philosophy

John Paulson, a former mergers and acquisitions banker, established his firm as a merger arbitrage hedge fund manager, seeking to make money from situations when one public company announces plans to take over another. Merger arbitrage hedge funds primarily study equity markets, but they also research the market for credit default swaps, a form of insurance that starts paying out as soon as a credit security falls in value.

Total Holding History

Performance of Advantage Fund

YearReturn (%)S&P500 (%)Excess Gain (%)
2011-362.11-38.1
201011.6815.06-3.4
20096.1226.46-20.3
3-Year Cumulative-24.2 (-8.8%/year)48.6 (14.1%/year)-72.8 (-22.9%/year)
20086.28-3743.3
200751.745.4946.3
5-Year Cumulative22.3 (4.1%/year)-1.3 (-0.3%/year)23.6 (4.4%/year)
200616.8115.791.0
20053.944.91-1.0
200411.9210.881.0
200322.6928.68-6.0
20024.48-22.126.6
10-Year Cumulative113.1 (7.9%/year)33.3 (2.9%/year)79.8 (5%/year)
20015.04-11.8916.9
200022.42-9.131.5
199923.8121.042.8
1998-4.9128.58-33.5
199712.7133.36-20.7
15-Year Cumulative263.6 (9%/year)121.6 (5.4%/year)142 (3.6%/year)
199638.1322.9615.2
199518.5737.58-19.0
199423.461.3222.1

Top Ranked Articles

Paulson & Co. Loses Money on NovaCopper as Copper Prices Decline Declining copper prices result in losses to the fund
John Paulson (Trades, Portfolio) of Paulson & Co. took a 70 cents per share loss on NovaCopper Inc. (NCQ) on May 26. Read more...
John Paulson Bets Big on Office Depot Guru may have been influenced by planned merger between Staples and Office Depot
Guru John Paulson (Trades, Portfolio), founder of Paulson & Co., purchased 7,809,600 shares of Office Depot (NASDAQ:ODP) in the first quarter. Read more...
John Paulson Trims Time Warner Cable, Starwood Hotels Guru's largest reductions in the 1st quarter
John Paulson (Trades, Portfolio) is the president and portfolio manager of Paulson & Co. Inc. During the first quarter he reduced or closed his shares in many stocks. Read more...
Insider Trades of the Week Paulson & Co. sells shares of Novagold Resources
The All-in-One Screener can be used to find insider buys and sells over the last week by clicking on the Insiders tab and changing the settings for All Insider Buying to “$1,000,000+” and duration to "April 2016." Read more...
John Paulson Sells More Than 2.5 Million Shares of Gold Exploration Company He remains leading guru shareholder in Novagold Resources
For the second time in 2016, John Paulson (Trades, Portfolio) of Paulson & Co. has reduced his stake in Novagold Resources Inc. (NG), a Vancouver, British Columbia-based gold exploration company. Read more...
» More John Paulson Articles

How John Paulson Made His Fortune?

In a short span of time, John Paulson catapulted to the status of one of the most successful investors in history. He made an unprecedented $3.7 billion in one year in 2007 foreseeing the subprime debacle and earned massive returns on several other bets in recent years. His ability to achieve such success while the majority of the investment world cratered has left many investors asking how he did it and what they could learn from him. In his 2010 investor letter, he broadly explained that his firm made billions by “anticipating market events before they are generally recognized.”

Risk Arbitrage

Before the events that would make him legendary, Paulson was a successful hedge fund manager focusing on risk arbitrage. His arbitrage funds are his oldest, dating back to 1994, and their track record shows that they resisted economic downturns and returned above average rates over the long term (approximately 17% compared to 10% of the S&P 500). His first fund had only one down year since its inception in 1994. By the end of 2004, Paulson & Co. managed $2.9 billion.

In a 2003 interview with Hedge Fund News, he said that in risk arbitrage his method to outperform the merger arbitrage index was to minimize drawdowns from deals that break, by weighting portfolio to deals that could receive higher bids, by focusing on unique deal structures which offer the potential for higher returns and by occasionally shorting the weaker transactions.”

Subprime

The first banner year for Paulson occurred in 2007. As early as 2005, he began to recognize the trouble with the mortgage industry. Banks were offering mortgages – often at adjustable rates – with few restrictions or credit requirements; when the rates went up and people could no longer pay, they would have to refinance or default. The loans were based on the presumption that housing prices would continue to increase. Paulson told the Financial Crisis Committee in 2010 that when he recognized that home prices ceased going up, he began buying securities against low-graded loans likely to default.

Mortgage dealers told Paulson that the mortgages were safe because home prices had never declined on a national scale since the Great Depression. “Our opinion was [home prices] were overvalued and they were going to correct and that the quality of mortgages was very poor, and the losses would likely be substantial,” Paulson said. By June 2006, he set up a fund for credit default swaps – a form of insurance which would pay him if people could not pay their loans – to capitalize on the fallout.

By February of 2007, before the credit crisis actually hit, his return soared to 66%. By the end of 2007, his firm had made $15 billion.

Shorting Financials (2008)

In early 2008, he even made money as financial institutions related to the mortgage backed securities collapsed. He did it primarily by shorting stocks in some of the world’s largest financial institutions, betting they would fail. He shorted Fannie Mae, Freddie Mac, Barclays (BCS), Royal Bank of Scotland (RBS) and Lloyds TSB (LYG). By November of 2008, his firm had $36 billion assets under management.

Financial Recovery (2009)

As he profited when the financial sector fell apart, so he profited as it began to recover in 2009. In a speech at a hedge-fund seminar in Tokyo, Paulson called distressed assets in the U.S. “the best opportunity in a lifetime.” He formed a new fund called the Paulson Recovery Fund in 2008, making investments, primarily in the financial sector, that would appreciate as the economy improved. He also deemed the consumer staples, pharmaceutical and health industries as attractive options.

In Paulson’s 2009 investor letter, he said the biggest challenge to performance was picking the right security and the right entry point. “Many investors have tried to buy at what they thought was the bottom but to date almost every investor that has bought financial equity securities has lost money,” he wrote.

Paulson & Co. followed approximately 70 banks in 2009, analyzing them based on need for further equity, core earnings forecasts, estimated losses and projected capital deficiency. They then projected earnings per share that would help them forecast future prices. The Paulson Recovery Fund had a return of 25.49% in 2009.

His best returns in 2009 came from his Credit Funds, which were up 28.45% through November, beating the industry average of 13.6%. He made most of the money in that fund through buying an assortment of cheap loans and bonds and selling them for a profit.

Gold (2010)

In 2009, Paulson increased his investment in the gold sector. He created the Paulson Gold Fund in April 2009, and five gold mining stocks comprise 14% of his firm’s portfolio. In the first quarter of 2009, he purchased 31,500,000 shares of SPDR Gold Trust (GLD) at $89.56 per share. As of April 2011, GLD stock has risen 63% to approximately $133 per share.

His second largest gold holding is AngloGold Ashanti (AU) which comprises 7.11% of his portfolio. As of Dec. 31, 2011, he owns 40,949,437 shares. He first purchased shares of AngloGold in the first quarter of 2009 at approximately $30, and the share value has risen 64.5% since then.

He is also buying into gold-related companies. Gabriel Resources (GBU), of which he owns over 19%, is the largest potential gold mine in Europe. Gabriel Resources is an “impaired” gold company in that it has been involved in a lengthy process to obtain environmental permits and expects that it will not be until 2014 that everything will be in place to actually begin mining. But the company’s problems sent its stock price down. Paulson first bought the stock at around $2 per share in the first quarter of 2009. As of April 2011, it has increased 233% to $7.22 per share.

Paulson’s gold funds debuted with an over 35% net return. Paulson & Co. attributed the return to their “exposure to production, development, exploration gold mining shares and the rising value of derivatives.”

Gold prices have risen over 131% in the last five years. In 2010 it leaped almost 30%, and his investment paid off even better than his subprime bet in 2007: He made $5 billion. However, in the first quarter of 2011, his gold funds have lost 1.26%.


Commentaries and Stories

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Paulson & Co. Loses Money on NovaCopper as Copper Prices Decline Declining copper prices result in losses to the fund John Paulson - Paulson & Co. Loses Money On NovaCopper As Copper Prices Decline
John Paulson (Trades, Portfolio) of Paulson & Co. took a 70 cents per share loss on NovaCopper Inc. (NCQ) on May 26. More...

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Rating: 4.0/5 (1 vote)

John Paulson Bets Big on Office Depot Guru may have been influenced by planned merger between Staples and Office Depot John Paulson - John Paulson Bets Big On Office Depot
Guru John Paulson (Trades, Portfolio), founder of Paulson & Co., purchased 7,809,600 shares of Office Depot (NASDAQ:ODP) in the first quarter. More...

  • Currently 5.00/5

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John Paulson's Top 4 New Buys Not Health Care or Gold Paulson has had more than half of holdings in health care John Paulson - John Paulson's Top 4 New Buys Not Health Care Or Gold
John Paulson (Trades, Portfolio) kept the majority of his long portfolio in health care in the first quarter though his top new buys came from a variety of industries. More...

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John Paulson Trims Time Warner Cable, Starwood Hotels Guru's largest reductions in the 1st quarter John Paulson,Dodge & Cox,Eric Mindich,Jana Partner - John Paulson Trims Time Warner Cable, Starwood Hotels
John Paulson (Trades, Portfolio) is the president and portfolio manager of Paulson & Co. Inc. During the first quarter he reduced or closed his shares in many stocks. More...

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Insider Trades of the Week Paulson & Co. sells shares of Novagold Resources John Paulson - Insider Trades Of The Week
The All-in-One Screener can be used to find insider buys and sells over the last week by clicking on the Insiders tab and changing the settings for All Insider Buying to “$1,000,000+” and duration to "April 2016." More...

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John Paulson Sells More Than 2.5 Million Shares of Gold Exploration Company He remains leading guru shareholder in Novagold Resources John Paulson - John Paulson Sells More Than 2.5 Million Shares Of Gold Exploration Company
For the second time in 2016, John Paulson (Trades, Portfolio) of Paulson & Co. has reduced his stake in Novagold Resources Inc. (NG), a Vancouver, British Columbia-based gold exploration company. More...

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Rating: 4.8/5 (4 votes)

Pfizer-Allergan Merger Collapse Hurts Some Funds but Is Boosting Others Allergan's price sank but Pfizer's actually rose significantly following the merger agreement failure, a boost for long-term holders John Paulson,Andreas Halvorsen - Pfizer-Allergan Merger Collapse Hurts Some Funds But Is Boosting Others
When Pfizer Inc. (NYSE:PFE) and Allergan Plc (NYSE:AGN) announced their proposed merger deal collapsed on April 6, so too did the hopes of several influential hedge fund managers who staked much capital on its success, but some investors have seen benefits. More...

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Time To Buy Allergan After the Pfizer tax inversion deal fell through, Allergan shares got hammered, and it's time to pick up some shares Bill Ackman,John Paulson,Steve Mandel,Jana Partner - Time To Buy Allergan
Allergan (NYSE:AGN) stock has dropped a lot because of rumors Pfizer (NYSE:PFE) will walk away from their deal. More...

LONG, DRUGS, PHARMA


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John Paulson Trims Stake in Allergan, Time Warner Cable Event-driven investor's top 4th quarter trades John Paulson - John Paulson Trims Stake In Allergan, Time Warner Cable
John Paulson (Trades, Portfolio) established Paulson & Co. Inc. as a merger arbitrage hedge fund manager, seeking to make money from situations when one public company announces plans to take over another. During the fourth quarter, he sold many stocks including the following. More...

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John Paulson Adds to Overseas Shipholding Stake is largest in guru's portfolio John Paulson - John Paulson Adds To Overseas Shipholding
Guru John Paulson (Trades, Portfolio) added 10% to his stake in Overseas Shipholding Group Inc. (OSG) in the first quarter of 2016. More...

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John Paulson Sells Allergan, Precision Castparts, AIG Top sales by the investor during the 4th quarter John Paulson,Vanguard Health Care Fund,Andreas Hal - John Paulson Sells Allergan, Precision Castparts, AIG
John Paulson (Trades, Portfolio) is the president and portfolio manager of Paulson & Co. Inc. Paulson was ranked by Absolute Return Magazine as the third-largest hedge fund in the world managing approximately $29 billion in merger, event and distressed strategies. The following are the guru's largest sales during the fourth quarter of 2015. More...

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John Paulson Urges Premier Foods to Take Buyout Offer Paulson sides with company that would buy at premium, not strategic partner that would fuel growth at British small-cap John Paulson - John Paulson Urges Premier Foods To Take Buyout Offer
John Paulson (Trades, Portfolio) has come out against Premier Foods, in which he owns a 7% stake, selling part of the company instead of taking a buyout offer. More...

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John Paulson Increases Stake in Company He Backed in Bankruptcy Overseas Shipholding Group has seen better days since restructuring John Paulson - John Paulson Increases Stake In Company He Backed In Bankruptcy
John Paulson (Trades, Portfolio) has a 10% larger position in Overseas Shipholding Group Inc. as of March 16, according to GuruFocus Real Time Picks. More...

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John Paulson Raises Stake in Valeant, Teva Pharmaceutical Event and distressed strategies investor ups Valeant stake by 50% John Paulson - John Paulson Raises Stake In Valeant, Teva Pharmaceutical
John Paulson (Trades, Portfolio) is the president and portfolio manager of Paulson & Co. Inc. Paulson was ranked by Absolute Return Magazine as the third-largest hedge fund in the world managing approximately $29 billion in merger, event and distressed strategies. During the fourth quarter, the guru bought the following stocks. More...

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Eric Mindich Sells Perrigo, Microsoft and Adobe Those were guru's largest sales during 4th quarter Eric Mindich,John Paulson,David Rolfe,Ruane Cunnif - Eric Mindich Sells Perrigo, Microsoft And Adobe
Eric Mindich (Trades, Portfolio), who started working at Goldman Sachs after high school and spent summers at the firm while earning a degree in economics at Harvard, manages a portfolio composed of 36 stocks with a total value of $6.35 billion. The following are his largest sales during the fourth quarter. More...

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John Paulson Purchases 5 Million Shares of Lam Research Corp. Lam Research will merge with KLA-Tencor John Paulson - John Paulson Purchases 5 Million Shares Of Lam Research Corp.
Guru John Paulson (Trades, Portfolio) was born in Queens, New York in 1955. Paulson graduated with a bachelor's from New York University, then went on to attend Harvard Business School, where he earned an MBA in 1980. More...

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John Paulson Increases Bet on Health Care for 7th Quarter Hedge fund manager increased sector for seventh consecutive quarter to more than half of long portfolio John Paulson - John Paulson Increases Bet On Health Care For 7th Quarter
As 13F filings rolled in this week, the most notable revelation of John Paulson (Trades, Portfolio)’s was his reduction of his SPDR Gold Trust (GLD) stake, a mainstay of his portfolio for years, at a significant loss. Paulson, the head of hedge fund Paulson & Co., in his next most prominent move increased his holding of health care stocks for the seventh consecutive quarter. The sector made up more than 57% of his long portfolio, compared to 48.3% the previous quarter. More...

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John Paulson, Icahn Pick to Join AIG Board AIG also announces share buybacks and 4th quarter earnings John Paulson,Carl Icahn - John Paulson, Icahn Pick To Join AIG Board
Insurance giant American International Group Inc. (NYSE:AIG) today announced that it would expand its board of directors to accommodate two new seats and nominated fund managers John Paulson (Trades, Portfolio) and Samuel Merksamer to fill them. More...

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Valeant's Share Price Continues to Decline Though the price is falling, there are strong drivers to analyze Bill Ackman, John Paulson, Ken Fisher - Valeant's Share Price Continues To Decline
Valeant Pharmaceuticals Inc. (NYSE:VRX), one of the best specialty drugmakers, has been trading down since September 2015 when the last rally was seen. Since then, the stock plunged to less than half of its value. More...

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Dow-DuPont Merger Rates High on Paulson Checklist Evaluating the mega-merger according to the M&A guru's criteria John Paulson - Dow-DuPont Merger Rates High On Paulson Checklist
On Dec. 11, Dow Chemical (NYSE:DOW) and DuPont (NYSE:DD) announced both its boards had approved an all-stock merger of equals that will create a combined company called DowDuPont, which will have a market cap of $130 billion as of the announcement. More...

DOW CHEMICAL, DUPONT, MERGER


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