Hedge fund giant John Paulson made headlines again today. Bloomberg reported that Paulson & Co., the $35.9 billion hedge fund run by John Paulson, told clients that it made more than $1 billion on its Citigroup Inc. investment in the last 18 months.
Paulson’s flagship Advantage Fund gained 11% in 2010, which lagged the market. But his Advantage Plus fund gain 17%. He did extremely well with his Gold Fund, too.
This is the holding history of John Paulson with Citigroup:
We can see Paulson bought into Citigroup in the first quarter of 2010. He owned more than 500 million shares as of March 31, 2010. Citigroup was traded for as low as $3.15 a share to as high as $4.31 a share in the first quarter. He held the shares through Q2, and reduced his positions by 82.7 million shares in Q3. With 500 million shares, he needs to make at least $2 a share to make $1 billion. The prices of Citigroup stocks did not go up more than $2 a share. So it is not totally clear how he made $1 billion out of the 500 million shares.
There is possibility that he owns Citigroup through the funds that were not included in the filings.
John Paulson was very bullish on financials 18 months ago. In late 2009, he predicted Bank of America would have earnings of $3 per share by the end 2012. Using a 10X multiple the stock would be worth $30 a share. This prediction was questioned by GuruFocus columnist Jacob Wolinsky, which stirred quite some discussions.
Today Bank of America (BAC, Financial) shares are traded at around $13.92, still far below what John Paulson has predicted. In the meantime, Paulson seems to have lost his patience with BAC, he sold about 30 million shares in the third quarter of 2010 out of the 167 million shares he held. He still made a nice profit on Bank of America shares. From our estimate, his cost base is around $11 a share. Therefore, his profit on the Bank of America shares is in the north of $400 million.
Paulson is bullish on the US economy. He said “We believe the U.S. economy is recovering, and we anticipate continued growth,” according to New York Times.
As of Sept. 30, 2010, the top 5 holdings of Paulson, Co. was Spdr-Gold Trust, Anglogold Ltd, Bank Of America Corp, Citigroup Inc, and Hartford Financial Services (HIG, Financial). The complete list of holdings is here.
Paulson’s flagship Advantage Fund gained 11% in 2010, which lagged the market. But his Advantage Plus fund gain 17%. He did extremely well with his Gold Fund, too.
This is the holding history of John Paulson with Citigroup:
We can see Paulson bought into Citigroup in the first quarter of 2010. He owned more than 500 million shares as of March 31, 2010. Citigroup was traded for as low as $3.15 a share to as high as $4.31 a share in the first quarter. He held the shares through Q2, and reduced his positions by 82.7 million shares in Q3. With 500 million shares, he needs to make at least $2 a share to make $1 billion. The prices of Citigroup stocks did not go up more than $2 a share. So it is not totally clear how he made $1 billion out of the 500 million shares.
There is possibility that he owns Citigroup through the funds that were not included in the filings.
John Paulson was very bullish on financials 18 months ago. In late 2009, he predicted Bank of America would have earnings of $3 per share by the end 2012. Using a 10X multiple the stock would be worth $30 a share. This prediction was questioned by GuruFocus columnist Jacob Wolinsky, which stirred quite some discussions.
Today Bank of America (BAC, Financial) shares are traded at around $13.92, still far below what John Paulson has predicted. In the meantime, Paulson seems to have lost his patience with BAC, he sold about 30 million shares in the third quarter of 2010 out of the 167 million shares he held. He still made a nice profit on Bank of America shares. From our estimate, his cost base is around $11 a share. Therefore, his profit on the Bank of America shares is in the north of $400 million.
Paulson is bullish on the US economy. He said “We believe the U.S. economy is recovering, and we anticipate continued growth,” according to New York Times.
As of Sept. 30, 2010, the top 5 holdings of Paulson, Co. was Spdr-Gold Trust, Anglogold Ltd, Bank Of America Corp, Citigroup Inc, and Hartford Financial Services (HIG, Financial). The complete list of holdings is here.
