Paulson Adds $1.5 Billion Of Citi Stock, Sells Entire Goldman Stake And Some Bank Of America
The latest Paulson & Co. 13F is out: the man who inspires a million hedge fund clone portfolios has made some interesting changes to his holdings. The most notable is the documented addition of 300 million shares of Citigroup, a new position for the firm. Offsetting this is the sale of 8.2 million shares of Bank of America (which at 160 million shares is still the firm's second largest holding). Paulson has also divested his entire 2MM share Goldman Sachs stake.
Other notable changes:
- Doubling in the Liberty Media position from 20mm to 44.75mm, the firm's seventh largest position (by value)
- Position reduction in JP Morgan, new positions in Cemex, Starwood Hotels and Starwood Property Trust (the last is an August IPO), Conseco, Ashford Hospitality Trust, Felcor Lodging Trust.
It appears Mr. Paulson has become a fan of REITs. We hope that all the CRE risk is indeed "priced in" as CNBC says.
As before, Paulson's number one position continues to the be GLD with 31.5 million shares.
(2 votes)
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on Fri, 11/13/2009 - 18:31
#130281
This can't possibly be because he thinks Citi is a terrific investment.. perhaps he smells some sort of intervention/break up ??
on Fri, 11/13/2009 - 18:45
#130295
Smells? More like his friends told him something man. This is the USA after all.
on Fri, 11/13/2009 - 19:55
#130353
Agreed...and judging by the name I thought it was rude of him not to tell you !
on Fri, 11/13/2009 - 20:52
#130388
Was thinking more of the Fight Club one (not Hank or Paul) when I named myself here...no relationship, thank goodness.
on Sat, 11/14/2009 - 01:40
#130490
imho, Paulson's employment of a long C position could possibly serve as an attempted/effective hedge of R2 correlation factors across his cumulative portfolio at three blatantly outlying spots:
1) assorted financial-related CDS;
2) core GLD position;
3) being left out in the cold when someone else's phone rings to announce a Citi sleepover party being planned within Treasury; don't forget, **ittygroup never sleeps.
And while nothing more than a wild stab in the dark lays above, just because Paulson & Co. is ginormously long GLD does NOT necessarily mean that they are firmly committed to inflationary pressures but rather that they have firmly committed to a short / intermediate-term technical outlook for GLD's price action, in which they believe that they will be able to sell to someone else at/for a higher price.
His effective VWAP across gold positions must be so pretty at this point that even if the swap side of the positions' hedge was botched like Octomom's collagen treatments that his synthetic trailing stop would still net him a vast, vast profit. And while the consummation of such a multi-legged, multi-staggered strategy can never be perfectly assumed or assured, there is just about no one better today at managing such "otherwise unquantifiable" risks of third and fourth derivative contingencies.
And finally, why is it that he always must ostensibly garner 'inside' information in order to make a killing somewhere ??
If you wanna pull on a long string, why not look into the modern day Chanos' and Steinhardt's of Stamford; or, simply go back to the only refusal of action on record at the SEC that has ever made their tacit wink-wink toward Madoff seem like child's play ... Buzzy Krongard.
on Sat, 11/14/2009 - 02:50
#130508
Interesting post, appreciated the potential broader portfolio picture.
on Sat, 11/14/2009 - 06:48
#130540
Really?? Seems like you are just blowing smoke up your own ass if you think so. His theme is pretty consistent across his top holdings. He is long gold, and several gold miiners and also long several financials. Sounds like a pure fundamental play to me.
on Sat, 11/14/2009 - 13:07
#130693
And owns 2,000,000 units of Ultrashort Financials.........
on Sat, 11/14/2009 - 07:20
#130548
+100
on Sat, 11/14/2009 - 12:17
#130655
Who did the SEC wink at?
Not sure of the reference
As far as inside information...Greenspan now works for the guy but simpler even still....Who buys bankrupt companies, hedged or not?
TIA
Waldo
on Sat, 11/14/2009 - 12:44
#130675
Very interesting post from an obviously sophisticated individual. But Paulsons reason for being "ginourmously" long GLD is unlikely to be technically founded. It is very much founded on fundamental economic beliefs that he holds. See Greg Zuckerman's new book for example (end chapter). However, I think you are onto something important: He's firmly committed to be positioned for and protected against inflation and systemic collapse (or at least the perception of a greater risk of such events occurring) alright, but he will obviously be looking for a counterparty at some point. Paqulson holds on for long, but I don't think he believes the system will ultimately fail.
on Wed, 11/18/2009 - 14:58
#134901
C is a weird case. I've been selling 4 and 5 straddles on C for a few months, IV seems way overpriced considering that the stock doesn't move at all.
I wouldn't be surprised if he's responsible for half the calls being sold on C
on Fri, 11/13/2009 - 19:44
#130341
How could a person think that there is anything behind GLD? Did he do an audit? Does he know of some game? Dump GS? isn't that like going to Jewish from Christian?
on Fri, 11/13/2009 - 20:17
#130370
He's not long GLD to get his hands on actual gold. He's long GLD to get exposure to the gold price which is obviously working its way to bubble status. Who knows how he's hedged or with what. This latter point goes for all of his holdings. You can't read anything into any of this. Don't you think he knows you're reading his holdings right now?
on Fri, 11/13/2009 - 20:22
#130375
Looks to me like he's wagering on a rebound...a reflation. Gold, financial companies (reflate out of the debt), REITS....(I really can't explain that one though).
on Fri, 11/13/2009 - 21:40
#130409
It must be nice to buy any piece of shit equity and just watch the copycat traders start gunning it higher.
Herding behavior is stunning.
on Sat, 11/14/2009 - 11:04
#130625
And a 43-day spread from 13-F filing period to signing date is a long, long time in the Paulson world. Copycats can and will " grab for the shadow ".
on Sat, 11/14/2009 - 13:02
#130688
+1
on Fri, 11/13/2009 - 21:56
#130416
Paulson continues to sniff significant inflation coming soon. His position in GLD and in any bank with with serious debt who's value can be eroded away is obvious to see. I believe we'll see a short period of massive asset value deflation in one big blowoff followed by more government porkulus. This will prompt our creditors to give up on the dollar. Paulson's GLD position and his position in the worst of the worst (Citi) will make him look like a genius once again.
on Fri, 11/13/2009 - 18:39
#130288
Two bank failures in Florida
on Fri, 11/13/2009 - 18:49
#130300
I would expect one of the other bankstas to give GS an upgrade to strong buy conviction list on Monday morning to make up for any negative publicity.
on Fri, 11/13/2009 - 18:50
#130302
I thought there was speculation of another massive writedown coming from C....? Does anyone know at this point what the hell is "priced in" to C?
...and he's mildly retarded concerning growth in the hospitality market. We've hit critical mass as far as development in the US goes. I'm not sure what scheme is for the BRIC countries which is the unknown in buying hotel stock. Marriott's estimates for RevPAR growth for 2010 is still down ~5% YOY, which is after a 20% hit this year. I can't imagine Starwood is that better off, especially since they deal with the luxury/upscale brands that have been impacted the worse. Economy brands are better as more clients have traded down.
on Fri, 11/13/2009 - 19:02
#130309
This reeks of an inside job with the administration. Paulson has been bought off by the Fed to prop up garbage. RIETS and Citi ? Hotels ?
This is BS
on Fri, 11/13/2009 - 21:04
#130393
Indeed. Warren Buffet is getting long in the tooth. Plunge Protection Team needs a new public face of investing, and maybe Paulson will be "it."
Think Buffet: Brett Favre::Paulson: Peyton Manning
Like Paulson even messes with common stock except to short it to shit against his preferred and convertible positions.
on Sat, 11/14/2009 - 12:33
#130668
Agree
Waldo
on Fri, 11/13/2009 - 19:07
#130311
Tyler, they don't have to mention short positons (even shorts against the box) do they?
on Fri, 11/13/2009 - 19:14
#130316
No. Nor long CDS for cap structure arbitrage (Long equities, long CDS). Although if any long equity position was hedged by buying CDS probably did not work out too well.
Which leaves pair trades: long C/short XXX?
on Fri, 11/13/2009 - 19:45
#130342
SDS
on Sat, 11/14/2009 - 00:51
#130477
So technically, he can go long C and offset that with a short position in C of the same amount and all we'd see is the long position? Now that's clever.
on Sat, 11/14/2009 - 07:32
#130551
The risky, dead CDS positions on virtually anything do not work as long as Uncle Stupid is 1) in the market screwing around and 2) has the PPIP's 5 stooges buying CRE, Bank, other CDS on the open market funding up for the PPIP institutional funds. PPIP is a Fraud. Since No Bank is puking the "bad assets" (as they otherwise should per the creation of PPIP) due to phoney accounting, regulatory forebearance and hubris) we are essentially funding Dealers to prop up the price of these instruments. Yes a direct and indirect subsidy to the big banks. Nothing is On the Level.
on Fri, 11/13/2009 - 19:15
#130317
Nope.
on Fri, 11/13/2009 - 19:08
#130312
must be nice...
on Fri, 11/13/2009 - 19:09
#130313
Bot C in $2-3 range, Citigroup at $4 is a great buy. Think of it as a perpetual call option. I'm still spitting at myself for not loading up on BAC when it was 3,4,5,6 dollars while all my friends couldn't get enough of it.
on Fri, 11/13/2009 - 19:21
#130323
friends Tim and Ben ? Chris and Barney ?
on Fri, 11/13/2009 - 21:27
#130406
I own BAC at 4 dollars! Woohoo!
on Fri, 11/13/2009 - 19:22
#130318
http://www.youtube.com/watch?v=oNiAAiSMu9Y&feature=player_embedded#
http://www.youtube.com/watch?v=_mwFwEkYZVs&feature=player_embedded
http://www.youtube.com/watch?v=AEtqPBEpt5M&feature=player_embedded
http://www.youtube.com/watch?v=cS6UApZHsW8&feature=player_embedded
on Fri, 11/13/2009 - 19:18
#130321
one
hit
wonder
on Fri, 11/13/2009 - 22:43
#130427
Thank you, and if ZH is exposing Paulson here they need more of their blunt witty sarcasm.
Still, as long as we are speculating (and I certainly am not going to piggy-back off this one hit wonder) I would say he was picking up these dogpoop companies at dogpoop prices as long as they have implied government backing.
on Fri, 11/13/2009 - 19:27
#130326
Yeah Baby...very long the *C*...:-)
on Fri, 11/13/2009 - 19:40
#130335
Here's the Dope on why he dumped GS:
http://www.politico.com/news/stories/1109/29492.html
on Fri, 11/13/2009 - 19:54
#130352
Thanks for reminding us what scumbags they have been over the years. GoldSach has had a long history of paying poverty wages to their non-union cafeteria workers in Manhattan.
http://cityroom.blogs.nytimes.com/2008/03/05/cafeteria-workers-protest-on-wall-street/
on Fri, 11/13/2009 - 20:03
#130364
LOL..Mutual exclusive club..
on Fri, 11/13/2009 - 20:06
#130367
Maybe or maybe not. Probably not,not, not !
Never the less, since the SEIU gave $67MM "at the office" and this gentleman was the most frequent visitor to the White House it's a good bet he's figuring out just exactly what "CHANGE" means, which is " I'm the President now so Fuck Yourself but by all means have all the protests you like. ;-)"
One party rule. Gotta love it.
on Sat, 11/14/2009 - 02:49
#130507
Very funny. One too-big-to-fail organization (SEIU) holding protests outside another too-big-to-fail organization (GS). I suppose the two organizations could have a bitchin' contest to see which has seen the most lavish largess from this administration. Or maybe Andy just want's a bigger bonus.
on Sat, 11/14/2009 - 13:20
#130702
Hilarious that they used a heavy weight that halts progress as a metaphor for themselves:
"There are plenty of ways to achieve reform and reduce risk and taxpayer exposure without destroying institutions that are the anchors of our global financial center,” the group wrote."
on Fri, 11/13/2009 - 19:48
#130344
Marla, you best be spinning tonight.
http://www.youtube.com/watch?v=q5ZQH2Uzpew
http://www.youtube.com/watch?v=p07Qdq2Jzv0
DARPA.
on Fri, 11/13/2009 - 19:57
#130354
Off topic totally,
Marla,
Are you spinning tonight?
on Fri, 11/13/2009 - 19:59
#130361
I really hope so.
I've been priming with vodka+"anything liquid in the fridge" for it.
on Fri, 11/13/2009 - 20:20
#130374
27 Ultrashort Financial
on Fri, 11/13/2009 - 20:27
#130379
Trisenberg. Bilderberg.
http://bacolicio.us/http://web.ukonline.co.uk/carter.jsrpages/pics2/2hcl...
on Fri, 11/13/2009 - 20:32
#130381
This COULD be a coincidence...
on Fri, 11/13/2009 - 20:34
#130382
I bet King Abdullah's nephew is putting another $12.5 billion in the pot. The conspiracy grows
on Fri, 11/13/2009 - 21:03
#130392
Tweedle dee and tweedle dum - Let's build a house!
Engineer.
Architect.
Mason.
Frammer.
Plumber.
Electrician.
Finish Carpenter.
Painter.
Good so far right yes?
Hmmm.. Where we start to get kind of fuzzy...
Local Bank.
Regional Bank.
Investment Banksters.
District Federal Banks.
The Fed.
Treasury.
Bond holders.
Congress.
Taxpayers.
Chinese & other assorted foreign countries.
What in the hell do all these usury charging folks have to do with all of the first half of the list?
on Fri, 11/13/2009 - 21:14
#130399
This should be interesting...
Protesters Plan Huge Anti-Goldman Rally In Washington, DC
Following Massive Showdown in Chicago…
Hundreds of Taxpayers to Converge on Goldman Sachs DC Headquarters Monday
National Mobilization Continues to Demand End to Multi-Billion Dollar Bonuses at Bailed Out Banks and the Too Big To Fail Doctrine, Calls for Congressional Action Now
http://tinyurl.com/yeqrxy7
on Fri, 11/13/2009 - 21:47
#130414
sooo you get the CDS play right re MBIA and AIG and you like make a ton and....then what--Paulson 's play was a good one but very very hard to repeat--the next bubble will not be CDS on crap ass banks.
on Fri, 11/13/2009 - 22:51
#130430
this is a political play to redistribute wealth from GS to C. C hasn't shared in the QE as much as the others. I'm sure Paulson got his guarantee from Obama for being a fine patriot and service-oriented no-bank-left-behind. Get C up to $15, bring GS down a little, like smoothing out the lumps of frosting so no piece is sweeter than the others.
on Fri, 11/13/2009 - 23:00
#130434
Isn't that obvious that Paulson is betting on inflation and dollar devaluation?
His investment in hotels seems to be wise, as I as a foreign citizen, can't wait to visit Manhattan and engage in shopping and partying spree, when dollar gets down to mid 2008 levels and lower.
And I'm not alone in this thinking.
My friends from Poland can't wait for lower dollar to go to Miami and buy some real estate at great prices.
on Sat, 11/14/2009 - 02:03
#130494
LOL ... tell your friends from Poland that my friend Steve from Bangladesh, who manages my local supermarket, still has 2 condos that he'd love to get out from underneath; and while every other member of his family down to the dog itself has another 2 on their heads as well, they did diversify across both sides of street within the same development. Oh and the rest of the block is entirely owned by non-resident non-North Americans as well so it will be very quiet ... think about this one real hard and try to figure out a second possible ending to the scenario.
Don't worry, you can get back to me on it.
While one can at least try to argue for equities and I certainly understand why people are so convinced that hyper-inflation is coming soon, just as soon as inflation itself actually ticks the mercury back over the zero line ... to even begin to talk housing and not be either cast within a Century 21 commercial or named Ben Stein is simply beyond the pale of reason.
on Sat, 11/14/2009 - 05:49
#130534
Well put Chopshop
on Sat, 11/14/2009 - 07:38
#130552
People should add worthwile analysis or say nothing at all. Why are you trying to second guess the most successful of hedge fund managers in recent years?
His huge bet in subprime should tell you that maybe his fund is in fact hedged against these stock trades. GLD will benefit from the gold hysteria and citi is benefiting from the reflation.
If you actually did any research instead of relying on conspiracy theories you would find that Citis book value per share was trading around $4. Paulson saw this going to a more realistic $5-7. i.e. it's an undervalued asset.
Considering these funds own around 20 stocks, it is not going to suffer from adverse market moves?
The reason? because some of these managers are smarter than you and at the first sign of trouble in the gold price or reflation, Paulson will be one of the first dumping stocks to the dumb money who are buying on dips.
on Sat, 11/14/2009 - 12:45
#130676
Citi has $4 in "book value"?
Waldo
on Sat, 11/14/2009 - 08:22
#130569
Whatever, I think I'm buying citistock on monday!
on Sat, 11/14/2009 - 12:11
#130649
P likely bought in July for $2 and change and probably took a pile off the table in mid Oct for an nice double
on Sat, 11/14/2009 - 09:00
#130584
It seems like an odd choice in light of how these instruments perform for him to have 50M of the SKF. While it seems OK to use as a hedge over a few weeks holding it long-term seems like there's a more effective insurance policy against those fine financials like RF, C, BAC, and CNO?
on Sat, 11/14/2009 - 09:23
#130593
Fool For The Citi - apologies to Foghat!
Goin' to the citi, got you on my mind,
Countrywide is pretty, I'll leave it all behind,
This is my decision, I'm comin' home to stay this time.
'Cause I'm a fewl for the citi, I'm a fewl for the citi,
Fewl for the citi, I'm a fewl for the citi.
Breathin' all the clean air, sittin' in the sun,
When I get my train fare, I'll get up and run.
I'm ready for the citi, air pollution here I come!
'Cause I'm a fewl for the citi, I'm a fewl for the citi,
I'm a fewl for the citi, I'm a fewl for the citi.
I'm like a fish out of water, I'M JUST A MAN IN A HOLE.
The citi lights turn my blues into GOLD.
I ain't no countrywide, I'm just a homesick man.
I'm gonna hit the bid just as fast as I can.
I'm tired of layin' back, hangin' around,
I'm gonna catch that train, then I'll be CITIBOUND!!!!!
on Sat, 11/14/2009 - 09:26
#130595
Calm populist outrage presented by Geithner...staged protest against GS by SEIU...
on Sat, 11/14/2009 - 10:14
#130609
Look for the hypsters to hype Citi as Paulson dumps.
on Sat, 11/14/2009 - 10:57
#130619
His cost basis in PM is 20? How?
on Sat, 11/14/2009 - 12:20
#130660
Foghat Easy Money
Turn this mother up.
http://www.youtube.com/watch?v=j9aVIjviJg8
on Sat, 11/14/2009 - 12:34
#130671
So, he think GS is a bubble, and Citi is cheap enough.
on Sat, 11/14/2009 - 13:49
#130718
just noticed he also unloaded 700k shares of STT.
on Sun, 11/15/2009 - 22:59
#131469
speaking of 13Fs, check out AlphaClone.
http://alphaclone.com/