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Last Minute Surge In Financials Puts Paulson's Key Funds In The Green For The Year, Gold Fund Is Best Performer

Tyler Durden's picture





 

After Paulson & Co. was underperforming the market substantially in the middle of 2010, with it Advantage and Recovery funds decidedly negative through Q3, the last minute push in the market to get financials green through the end of 2010 at all costs (literally, now that we know that Fannie, and its "recused" GC Tim Mayopoulos, is sacrificing a few trillion extra in taxpayer capital just to bail out such insolvent mortgage lenders as BofA), resulted in a strong close to the year for man who made billions on Paolo Pellegrini's ideas (and Goldman's client "dedication"). Then again, not very surprisingly, the best performing strategy in Paulson's barbell bet on inflation: the Paulson's Gold fund, which ended the year up about 35%. What will be interesting is finding just how much of BofA Paulson has left at the end of Q3, and whether he has given up on his price target of $30 for the bank which was supposed to be achieved by the end of 2011. Stay tuned on February 15 to find out...

From Market Watch:

Paulson & Co. generated big returns in December as bullish bets on
an economic recovery paid off, helping turn around what had been a tough
period for the giant hedge-fund firm earlier in the year. Paulson
Advantage, one of the firm's main hedge funds, returned about 9% in
December, leaving it up 11% for the year, according to a recent update
sent to investors. Paulson Advantage Plus, which uses the same strategy
but adds a small layer of leverage, was up 13% last month and ended 2010
with a gain of 17%. Paulson Recovery, which invests in
financial-services companies that need to rebuild capital, jumped 14% in
December, leaving it up 24% in 2010. Paulson Enhanced, a merger
arbitrage fund, gained 11% in December and ended last year with a 27%
gain. Gold share classes of the firm's funds returned more as gold
prices climbed last year. The gold share class of Paulson Advantage
returned 31% in 2010. Paulson's Gold fund, climbed 1.4% in December and
ended the year up about 35%.

 


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Thu, 01/06/2011 - 15:08 | Link to Comment Arius
Arius's picture

what's this story on fed gov Hoenig speaking on favor of gold standard...

Thu, 01/06/2011 - 15:19 | Link to Comment Hephasteus
Hephasteus's picture

The complete and utter terror of people simply buying up all the silver and using IT AND ONLY IT AS MONEY leaving the banks hording tons of scrap metal.

Thu, 01/06/2011 - 15:09 | Link to Comment bob_dabolina
bob_dabolina's picture

It sure doesn't hurt when the former Fed Chairman is employed by your firm either.

Thu, 01/06/2011 - 15:19 | Link to Comment Salinger
Salinger's picture

and this is the neighborhood that some of these guys are putting their green into, and if the housing market peaked in 2005 then these high end sales would suggest that the bottom was at least a year ago

http://www.naplesnews.com/news/2011/jan/06/naples-real-estate-sales/

The lot that just sold for 14 and change sold for 12 and change in 2005 and with just 160' of frontage, unless there was a side deal/trade involved they just paid almost 90k/foot of frontage, which is a 13% premium over the 2005 price and almost 50% over the sale of a similar lot that sold in the spring

Thu, 01/06/2011 - 15:24 | Link to Comment Liars Poker
Liars Poker's picture

That is less than a days work for Paulson. :)

It's equivalent to a McDonalds employee buying a cheeseburger.

 

www.nacocapital.com

 

 

Thu, 01/06/2011 - 15:50 | Link to Comment JW n FL
JW n FL's picture
by Liars Poker
on Thu, 01/06/2011 - 14:24
#853524

 

That is less than a days work for Paulson. :)

It's equivalent to a McDonalds employee buying a cheeseburger.

 

www.nacocapital.com

 

 

Salinger wants to think that $14m is an expensive house... try $100m starting, before rehab and then after another $100m is added... no one lives in the home, save a few weeks a year.

 

Thu, 01/06/2011 - 16:49 | Link to Comment Salinger
Salinger's picture

narcocaptial  wtf

Thu, 01/06/2011 - 15:21 | Link to Comment bankrupt JPM bu...
bankrupt JPM buy silver's picture

Paulson said GOLD min $4500, nuff said.  Buy the dip, its dipping now...

Thu, 01/06/2011 - 16:19 | Link to Comment All_In
All_In's picture

FYI...I buy 1 oz gold eagles from California Numismatic Investments (CNI) on a semi-regular basis and I just received my order, but it was a partial fill with the remainder on back order.  I called the dealership and they mentioned that they cannot keep any in stock as it is "flying off of the shelves"...just thought I would pass this on...

Thu, 01/06/2011 - 16:28 | Link to Comment Trailer Trash
Trailer Trash's picture

Dear ZH Community, Please provide some advice.  I would like to purchase some Gold and Silver today, my first purchases.  I have decided to buy Eagles just for personal reasons, realizing that there is a premium. My questions are: Regarding Gold, Does anybody care about "Dates of our Choice" versus a specific year and "Original Mint Tubes" or "Brand New Coins".  I would prefer the "cheaper" gold unless all of the other stuff is of any specific concern or value. Also, if the premium is roughly the same, is there value in purchasing .5 oz versus 1 oz.   Regarding Silver, Monster boxes, sealed or unsealed.  Again, I would prefer the "cheaper silver" unless there is some express advantage in the purchase of a mint sealed box. From your previous recommendations, I understand that Tulving is a reputable house from which to purchase.  Yes? 

Thu, 01/06/2011 - 17:10 | Link to Comment Quinvarius
Quinvarius's picture

IMO, get the cheapest version of the coin regardless of the date.  I use APMEX.  They sent me a free tub of popcorn this year.  I regret eating it all at once.  That is why I don't keep junkfood in my house.

Thu, 01/06/2011 - 20:15 | Link to Comment rocker
rocker's picture

It took me a week to eat my can. The carmel was best. I agree. Apmex has been my choice for a long time.

You can get Palladium, Platinum, Gold and Silver from them. I buy which ever coins have the lowest cost over face

value from the US. or Canadian Mint only. I would suggest buying all four metal groups.

Thu, 01/06/2011 - 17:13 | Link to Comment Quinvarius
Quinvarius's picture

Also, one other thing, I prefer silver maples.  They have a $5 Canadian face value.  The eagles have a $1 face value.  It seemed like extra insurance to me.

Thu, 01/06/2011 - 18:22 | Link to Comment Trailer Trash
Trailer Trash's picture

Thank You Quinvarius!

Thu, 01/06/2011 - 17:47 | Link to Comment Dollar Damocles
Dollar Damocles's picture

Gold:  Get Canadian Maples and Kruggerands.  Why?  Cause Jim Sinclair says so.  There are a few reasons though, namely recognization internationally, and the fact that they DON'T say USA on them (Uncle Sam might decide that it belongs to him).  Also, they are cheaper.  You want metal in a recognizable form - I recommend staying away from buying coins based on beauty or nostalgia.

Silver:  Cheapest way possible!!!  Don't get 1oz coins... waste of money - totally pointless.  You want a couple bags of junk silver (pre-1964 US coinage) for barter in a hyperinflation - they are THE BEST thing for that purpose because of their small denomination, and the premiums are very low.  Plus, do you really want to show up at the farmers market with a few nice, shiny silver eagles that say "follow me home, I was a prepared silver bullion buyer"?  Junk Silver says "My grandpa gave me a coin collection".  Everything else above a few months living expenses in junk silver, get bars because the premiums are cheap.

Thu, 01/06/2011 - 18:23 | Link to Comment Trailer Trash
Trailer Trash's picture

Thank You DD!

Thu, 01/06/2011 - 23:08 | Link to Comment ClaymoreStoor
ClaymoreStoor's picture

Everyone is going to have a different answer to this question but here's mine.  Ive bought from both APMEX and Tulving and you can't go wrong with either.  Tulving generally has lower prices but has minimum purchases.

As for which coins to go with, I'd personally stick to maples, krugerrands and philharmonics.  Those three are extremely liquid and very common.  I own a mix of those three (philharmonics are my own personal favorite).  I avoid U.S. gold coins for no other reason than they are U.S. legal tender (my own form of protest you could say), otherwise they are a fourth and perfectly fine investment.  I would just buy whatever has the lowest premiums.  Most of the time thats krugerrands.

Thu, 01/06/2011 - 23:22 | Link to Comment Dollar Damocles
Dollar Damocles's picture

++ Absolutely.

Also, I would add one other thing.  If you live in a state that has no tax on bullion, buy with cash from a local dealer.  You might pay a bit more than apmex or some other site, but who cares?  You have TOTAL PRIVACY.  No name, no paper trail, nothing to audit (think zero capital gains, zero risk of confiscation, totally private assets that are off the books in case of a bankruptcy).  You have financial assets that NO ONE knows about that you can sell, again, for cash, with no paper trail, anywhere in the world.  If you are unfortunate enough to live in a state that taxes bullion... well, I'd pay 1 or 2% more for privacy, but I sure as hell wouldn't pay a 5% or 10% state sales tax on top so you might be SOL if you live in the wrong place.  Check your state, and your neighboring state if you are close enough to drive by calling a few bullion/coin dealers.

I can't really express how important of an attribute privacy is.  There is literally nothing else like gold for hiding wealth in the world today.  As our government becomes increasingly predatory, I think you will feel a heck of a lot safer if all the gold you bought was bought in secret.

Thu, 01/06/2011 - 17:14 | Link to Comment RobotTrader
RobotTrader's picture

Institutions are in a panic to dump gold and forget about Jim Sinclair, Eric King, etc.

And they are in frenzy to buy Moody's....Mark Zandi the next Wall St. rock star?

Imagine that, but that's what the tape says...

Thu, 01/06/2011 - 17:19 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

"leaving it up 11% for the year"

so in other words, instead of paying this clown 2/20, you could have bought SPY and done just as well.

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