John Paulson

John Paulson

Last Update: 11-14-2017

Number of Stocks: 53
Number of New Stocks: 6

Total Value: $5,529 Mil
Q/Q Turnover: 4%

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 Dives Deeper Into Valeant With Increased Holding With funds sinking, Paulson buys even more of troubled pharma
Investors, like Bill Ackman (Trades, Portfolio), have lost fortunes on a pharmaceutical company called Valeant (NYSE:VRX). Now that some of the murkiness surrounding the company has begun to clear slightly, John Paulson (Trades, Portfolio) is hoping to make one, disclosing Monday that he has deepened his involvement. Read more...
Arnold Schneider Gains 5 New Holdings in 3rd Quarter Newly public company among guru’s investments
Schneider Capital Management leader Arnold Schneider (Trades, Portfolio) disclosed establishing five new positions in the third quarter. Read more...
John Paulson Sells VMware, Hewlett Packard, Several Other Holdings Guru's largest 1st-quarter trades
John Paulson (Trades, Portfolio) manages a portfolio composed of 97 stocks that is valued at $7.5 billion. During the first quarter, the guru sold shares of the following stocks. Read more...
Valeant Rises on Earnings Beat, Progress on Debt Repayment Pharmaceutical company cuts full-year revenue forecast
Recovering from its prolonged legal troubles, Valeant Pharmaceuticals International Inc. (NYSE:VRX) reported second-quarter earnings before the opening bell on Aug. 8. Read more...
The Fading Fortunes of John Paulson Hedge fund guru won attention for his strategy during the subprime crisis, but lately he’s been getting attention for the wrong reasons
John Paulson (Trades, Portfolio) was once a darling of Wall Street, having handsomely profited because of his smart bets on the subprime crisis while many of his counterparts suffered. 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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Arnold Schneider Gains 5 New Holdings in 3rd Quarter Newly public company among guru’s investments Arnold Schneider,John Paulson,HOTCHKIS & WILEY,Ste - Arnold Schneider Gains 5 New Holdings In 3rd Quarter
Schneider Capital Management leader Arnold Schneider (Trades, Portfolio) disclosed establishing five new positions in the third quarter. More...

SCHNEIDER CAPITAL, ARNOLD SCHNEIDER, 3Q BUYS


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Why Even the Most Successful, Die-Hard Value Investor Should Hold Gold A discussion of the benefits of investing in gold John Paulson, First Eagle Investment - Why Even The Most Successful, Die-Hard Value Investor Should Hold Gold
There are plenty of people who are able to live on their income and decide to invest all their savings in gold. I can appreciate the fact they expect the investment to keep up with inflation. As much as I do not agree with this approach, however, I find it preferable to putting 100% of your savings into a bank account with the intention of keeping it there for the long term. More...

GOLD, COMMODITIES, LONG, METALS, PRECIOUS METALS


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Sept. 19 Forum Update: ‘Qualcomm-NXP’ Edition The 3rd edition of ‘The Forum Update’ John Paulson, Paul Singer, Warren Buffett - Sept. 19 Forum Update: ‘Qualcomm-NXP’ Edition
Qualcomm Inc. (NASDAQ:QCOM) and NXP Semiconductors NV (NASDAQ:NXPI) announced a merger agreement in an Oct. 26, 2016 press release. The third edition of “The Forum Update” will break down this merger using John Paulson (Trades, Portfolio)’s Merger Arbitrage Checklist. More...

PAUL SINGER, WARREN BUFFETT


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Valeant Rises on Earnings Beat, Progress on Debt Repayment Pharmaceutical company cuts full-year revenue forecast John Paulson - Valeant Rises On Earnings Beat, Progress On Debt Repayment
Recovering from its prolonged legal troubles, Valeant Pharmaceuticals International Inc. (NYSE:VRX) reported second-quarter earnings before the opening bell on Aug. 8. More...

VALEANT, EARNINGS, 2Q, BEAT, DEBT


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Paulson Trimmed Stake in Trilogy Metals in June British Columbia-based company is up more than 25% in the last month John Paulson - Paulson Trimmed Stake In Trilogy Metals In June
John Paulson (Trades, Portfolio), president and portfolio manager of Paulson & Co. Inc., trimmed his stake in Trilogy Metals Inc. (TMQ) by 0.16% in June. The guru sold 18,247 shares for 57 cents per share. More...

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Pure Play Leveraged Gold Trade If a market correction happens in the next 3 to 6 months, these stocks will be well positioned John Paulson - Pure Play Leveraged Gold Trade
I don’t look at commodities very often as they are really just bets on direction not real investments, but with the Dow Jones closing in on 22,000, I see more expensive stocks and more uncertainty. The gold trade is becoming more compelling. More...

GOLD, COMMODITIES,


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Paulson Dives Deeper Into Valeant With Increased Holding With funds sinking, Paulson buys even more of troubled pharma John Paulson - Paulson Dives Deeper Into Valeant With Increased Holding
Investors, like Bill Ackman (Trades, Portfolio), have lost fortunes on a pharmaceutical company called Valeant (NYSE:VRX). Now that some of the murkiness surrounding the company has begun to clear slightly, John Paulson (Trades, Portfolio) is hoping to make one, disclosing Monday that he has deepened his involvement. More...

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John Paulson Joins Valeant's Board During Trying Transition Paulson enters fray as Ackman cuts losses John Paulson - John Paulson Joins Valeant's Board During Trying Transition
Valeant’s board has become a revolving door of billionaires. More...

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The Fading Fortunes of John Paulson Hedge fund guru won attention for his strategy during the subprime crisis, but lately he’s been getting attention for the wrong reasons John Paulson - The Fading Fortunes Of John Paulson
John Paulson (Trades, Portfolio) was once a darling of Wall Street, having handsomely profited because of his smart bets on the subprime crisis while many of his counterparts suffered. More...

GURUS, JOHN PAULSON, PAULSON & CO., HEDGE FUND, VALUE STOCKS, SPECIAL SITUATIONS, CHANGE OF STRUCTURE, CHANGE OF CONTROL, HEALTH CARE, SUB-PRIME, FUNDAMENTAL RESEARCH


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Paul Singer Gains 9 New Holdings in 1st Quarter Elliott Management’s 5 largest new buys Paul Singer,John Paulson,PRIMECAP Management,Georg - Paul Singer Gains 9 New Holdings In 1st Quarter
Elliott Management’s Paul Singer (Trades, Portfolio) gained nine new holdings in the first quarter. His top five new purchases are The Advisory Board Co. (NASDAQ:ABCO), Mead Johnson Nutrition Co. (NYSE:MJN), Monsanto Co. (NYSE:MON), Energen Corp. (NYSE:EGN) and C&J Energy Services Inc. (NYSE:CJ). More...

ELLIOTT MANAGEMENT, PAUL SINGER, Q1, BUYS


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John Paulson Sells VMware, Hewlett Packard, Several Other Holdings Guru's largest 1st-quarter trades John Paulson - John Paulson Sells VMware, Hewlett Packard, Several Other Holdings
John Paulson (Trades, Portfolio) manages a portfolio composed of 97 stocks that is valued at $7.5 billion. During the first quarter, the guru sold shares of the following stocks. More...

PAULSON, SELL, 1Q


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John Paulson's Top 5 New Buys First quarter stock picks John Paulson - John Paulson's Top 5 New Buys
John Paulson (Trades, Portfolio) rose to stardom when his short of the housing market in the financial crisis netted him billions of dollars and victory laps on gold bets in following years added to his wealth. Recent years have been less kind. Most recently, Paulson & Co. lost $3 billion in 2016, according to Bloomberg. More...

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Big Money Still Long Valeant Earnings are out and the stock is down. Yet, guru investors still have major positions Bill Ackman, John Paulson, Jim Simons, Chris Davis - Big Money Still Long Valeant
Valeant Pharmaceuticals International Inc. (NYSE:VRX) reported a better-than-expected quarterly profit this morning as a result of lowered costs and strength in its Bausch and Lomb subsidiary, yet its net loss widened as the company is feeling pricing pressure. More...

HEALTHCARE, PHARMA, BIG PHARMA, DRUG MAKERS


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Underperforming Stocks in Gurus' Portfolios Investors are buying and holding these stocks with negative returns John Paulson,Larry Robbins,Ray Dalio,Jim Simons,An - Underperforming Stocks In Gurus' Portfolios
While gurus hold positions in these companies, the stock prices and returns continue to fall. These are the worst-performing stocks over the last three months with a long-term presence in more than four gurus’ portfolios. More...

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John Paulson's Bargain Stock Generic drugmaker Akorn is worth 2.68% of guru's assets John Paulson - John Paulson's Bargain Stock
John Paulson (Trades, Portfolio) has 60% of his assets in the Healthcare sector. Of that, his largest holding, Akorn Inc. (NASDAQ:AKRX), makes up 2.68% of his total assets, an 8,974,400-share stake good for a 7.17% position in the company, which he’s held since the low $30 range. More...

DRUG STOCKS, PHARMACEUTICALS, HEALTHCARE


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Sibanye Gold, AngloGold Accused of Violating Safety Laws in South Africa Sibanye Gold's total gold production comes from South African operations First Eagle Investment,John Paulson - Sibanye Gold, AngloGold Accused Of Violating Safety Laws In South Africa
According to Bloomberg.com, Sibanye Gold Ltd. (NYSE:SBGL) and AngloGold Ashanti Ltd. (NYSE:AU) have been accused by South Africa of refusing “to comply with the country’s mining laws,” and “putting workers’ lives at risk in an ongoing dispute over safety stoppages.” More...

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9 Stocks Trading Below the Peter Lynch Value Gurus buy shares of undervalued companies John Paulson,Columbia Wanger,Seth Klarman,George S - 9 Stocks Trading Below The Peter Lynch Value
According to GuruFocus' All-in-One Screener, several gurus are focusing on stocks whose Peter Lynch fair values are far above the current prices. The following stocks are trading with wide margins of safety and at least five gurus are shareholders. More...

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John Paulson Continues to Buy These 8 Stocks The guru's largest investments of the 2nd and 3rd quarters John Paulson,First Eagle Investment,Steven Cohen,E - John Paulson Continues To Buy These 8 Stocks
John Paulson (Trades, Portfolio) is the president and portfolio manager of Paulson & Co. Inc. He manages a portfolio composed of 92 stocks with a total value of $9,119 million. In both the second quarter and third quarter, the guru increased his positions in the following stocks: More...

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John Paulson's Largest 3rd Quarter Trades Guru releases quarterly portfolio John Paulson - John Paulson's Largest 3rd Quarter Trades
John Paulson (Trades, Portfolio) is the president and portfolio manager of Paulson & Co. Inc. The guru’s largest trades during the third quarter were the following: More...

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Mylan Posts Loss Amid Investigation, Settlement Pharmaceutical company joins Valeant in reporting a loss Bill Ackman,John Paulson,Vanguard Health Care Fund - Mylan Posts Loss Amid Investigation, Settlement
Mylan (NASDAQ:MYL) released its third-quarter earnings Wednesday, reporting a quarterly loss and revenue growth that was below expectations. More...

MYLAN,VALEANT,PHARMACEUTICALS,HEALTHCARE


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