This page has been archived and commenting is disabled.

Paulson Sells Large Portions Of BofA, Citi, Wells, Capital One, Dumps All Of Goldman, Adds 500,000 In Potash Merger Arb

Tyler Durden's picture





 

John Paulson's September 30 13F has been released. Total long stock holdings reported amounted to $22.9 billion, unchanged from June 30. As expected, and following hot in the footsteps of David Tepper, Paulson dumped nearly 20% of his Bank of America and Citi stakes (30 million shares and 82.7 million shares respectively), sold about 11% of Wells Fargo and Capital One, and dumped his entire 1.1 million Goldman position. Keep in mind all this was before BofA stock got crushed in October: the next 13F will be even more interesting. Other divestitures included two thirds of his stake in Family Dollar Stores, a third of his position in Starwood Hotels, and over half of his Mead Johnson Nutrition position. While Paulson did not touch much of his gold exposure (he did sell 6% of Anglogold Ashanti), he kept GLD is biggest position (for the gold denominated holdings) at $4 billion, and added about 17 new positions, the biggest of which were Anadarko (13.4 MM shares), Hewitt Associates (7.6MM shares), NBTY (6.1 MM shares), McAfee (5 MM shares), and then some notable Merger arbs: Genzyme, Burger King and Potash, in which he added 500,000 shares. Either Paulson will now have to like Potash on its fundamentals, or he will have to sell this position. Oddly enough, today's market showed remarkable unwillingness on behalf of the arbs to dump their POT holdings. One wonders how long this will continue. Additionally, Paulson sold his entire half a billion dollar stake in Exxon, a position that he held for just one quarter. In other news, obviously, the love affair with financials is at least partially over, and at this point the future of the Recovery Fund may well be in doubt if even Paulson does not see the upside case for names such as BofA which a year ago he had a PT of $30 as of 2012.

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 11/15/2010 - 18:48 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture
Got Cat ?

 

 

BHP's Problem Is Caterpillar's Opportunity By LIAM DENNING

Caterpillar's $7.6 billion acquisition of Bucyrus International coming a day after BHP Billiton said it would resume stock buybacks is surely coincidental. That doesn't mean they aren't linked.

The mining industry is printing money: Citigroup expects it to have aggregate net cash of $70 billion by the end of 2012. BHP's buyback is designed to address an embarrassment of riches now that its bid for Potash Corp. of Saskatchewan is dead. Similarly, Morgan Stanley sees Rio Tinto generating $79 billion beyond what it needs to pay off debt and fund capital-expenditure plans between 2010 and 2015.

When resource producers are rich, equipment providers do well, as anyone who owned oil-field-service stocks this past decade could tell you. Cash chases a slow-growing supply of tools, driving up prices and profits for the likes of Bucyrus.

Little wonder announced synergies relate mostly to pushing a wider suite of equipment through Caterpillar's dealers. This makes sense. But after upfront costs, and taxed and discounted at Caterpillar's own hurdle rate of 12%, synergies don't cover the $1.8 billion premium being paid.

Then again, the Federal Reserve is doing some printing of its own, so debt is cheap. Cut Caterpillar's discount rate to 10% and synergies cover the premium. And the company has effectively redeployed the $700 million it had earmarked for expanding its mining business organically.

http://online.wsj.com/article/SB10001424052748703326204575616760494426660.html

Mon, 11/15/2010 - 21:16 | Link to Comment doolittlegeorge
doolittlegeorge's picture

harrowingly "Caterpiller went up today" as well.  This is how patently obvious the inflation trade has been ALL YEAR now.  We now know we have a massive "trillion dollar boondoggle to bankrupt America" as Nancy Pelosi's final "go phuck yourself America" minority leader election campaign.  It's never enough but "should the Italian government collapse tomorrow as per the intent" I will take some solace in that.  I do take note "Fiat is selling it's position in Ferrari"--good deal if you can get in on it. GOOD LUCK! If gold suddenly decides to roll over however--and the move in Ford's stock sure says it to me "a great moderation may be upon us."  Needless to say "we havn't had an economy to support these prices for over 2 years now" with the best being what Tom Keene called it:  "squishy."

Tue, 11/16/2010 - 08:02 | Link to Comment Instant Karma
Instant Karma's picture

They see what they want you to see.

Tue, 11/16/2010 - 08:40 | Link to Comment New_Meat
New_Meat's picture

"harrowingly..."

;-)

Mon, 11/15/2010 - 18:50 | Link to Comment the rookie cynic
the rookie cynic's picture

If the POT/Biliton merger didn't happen, why didn't we see a bigger decline in it's stock price today?

Mon, 11/15/2010 - 18:57 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

The mining industry is printing money: Citigroup expects it to have aggregate net cash of $70 billion by the end of 2012. BHP's buyback is designed to address an embarrassment of riches now that its bid for Potash Corp. of Saskatchewan is dead. Similarly, Morgan Stanley sees Rio Tinto generating $79 billion beyond what it needs to pay off debt and fund capital-expenditure plans between 2010 and 2015.

Mon, 11/15/2010 - 19:37 | Link to Comment butblack
butblack's picture

a somewhat credible valuation has been placed, it has already been priced into the market

Mon, 11/15/2010 - 19:45 | Link to Comment KidDynamite
KidDynamite's picture

Canada blocked the deal last week already.  THAT was the news.

Mon, 11/15/2010 - 19:53 | Link to Comment Quantum Nucleonics
Quantum Nucleonics's picture

Everybody has known for weeks that the deal was dead.  The initial pop in the summer got it ahead of the market, but commodities have gone parabolic since.  Potash has been drifting lower for a month, while the market caught up.  It traded over 200 the last time commodites went ballistic in '08.  Could go there again if ag commodities head back up after last week's dip.

Mon, 11/15/2010 - 18:55 | Link to Comment greenewave
greenewave's picture

To find out more about the lies and fraud propagated by Washington and the Big Banks, watch the YouTube video Global Economic Collapse 2010 at (http://youtu.be/_FHVy1tpT20).

Find out why there are a potential 17 million foreclosures in the pipeline over the next 5 years waiting to devastate the system!!

Global collapse is upon us.

Anonymous-

20 minutes ago

I really hate the fact that you're right. I? wish we were wrong. I really do.

Good vid.

 

Mon, 11/15/2010 - 18:58 | Link to Comment Gordon Freeman
Gordon Freeman's picture

All those guys know the bank stocks are dogshit--Fed or no Fed

Mon, 11/15/2010 - 19:03 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

The only people dumber than Paulson are the people who give him their money to manage.

Mon, 11/15/2010 - 19:10 | Link to Comment HarryWanger
HarryWanger's picture

And Soros added a bunch of AAPL. So did David Einhorn. And on and on. If all these guys are buying, I don't think you will see AAPL/stock market make any sudden downward moves any time soon.

Mon, 11/15/2010 - 19:49 | Link to Comment Tyler Durden
Tyler Durden's picture

Hopefully you and all Zero Hedge readers realize that all these filings are as of Sept 30, before the parabolic ramp up in the stock started. Unlike retail investors, HFs buy low, incite a short covering squeeze and sell at the top. As for who they sell to, that's a different question.

Mon, 11/15/2010 - 19:51 | Link to Comment HarryWanger
HarryWanger's picture

Thanks for pointing that out, I scream at the television when this is "Breaking News". 

Mon, 11/15/2010 - 20:06 | Link to Comment rocker
rocker's picture

Absolutely correct.  They are screaming Paulson's trades on CNBC. They forgot to tell us it's old news. Hmmmm.

Tue, 11/16/2010 - 00:14 | Link to Comment I am a Man I am...
I am a Man I am Forty's picture

Nobody around here thought Apple was low at $240, which is what Einhorn was DCA'd in at.  Would like to know when you thought Apple was low??

Mon, 11/15/2010 - 19:26 | Link to Comment AccreditedEYE
AccreditedEYE's picture

Either Paulson will now have to like Potash on its fundamentals,

Hmmm...fundamentals? What are those again?

Mon, 11/15/2010 - 19:26 | Link to Comment bugs_
bugs_'s picture

all of goldman

Tue, 11/16/2010 - 08:55 | Link to Comment sunnydays
sunnydays's picture

I find it very interesting that all of Goldman Sachs was sold.  Since Goldman runs the government.  What does he know about them?

Mon, 11/15/2010 - 19:31 | Link to Comment goldmiddelfinger
goldmiddelfinger's picture

Paulson had one great hit. Pretty easy hit to have, one needed capital/large investors in order to capitalize on the leverage angle. it's hard to repeat. His gold play has very little leverage and his stock picking is weak if he overlooked Ottawa in a low return natty resource arb.

 

http://www.youtube.com/watch?v=SY4DIxTzDGA&feature=related

Mon, 11/15/2010 - 21:28 | Link to Comment doolittlegeorge
doolittlegeorge's picture

actually he had two--with the second being even greater than the first.  the first was "the big short" and is obviously what you refer to.  what you forget is "he then wheeled around and bought all the banks for basically nothing."  HUGE gains on the upside as well.  "Now it get's tough."  Shorting certain muni's seems like a slam dunk--but the trade is ominous.  Should this be a municipal bond market bubble or worse...and Greece and Ireland are good examples of "how government non-inflation still yields soaring interest rates" this so called "urban legend" will look all to real.  It also "involves goobermint."  As in "hello, I'm from the Central Intelligence Agency."

Mon, 11/15/2010 - 19:53 | Link to Comment Problem Is
Problem Is's picture

Paulson: What a Swami!
You crystal balls, Tarot card readin' mother fucker...

Mon, 11/15/2010 - 20:15 | Link to Comment SwingForce
SwingForce's picture

Help me Harold, if Paulson knows how deep the banks are into the mortgage mess (he had a front row seat for 5 years) then why in God's name does he own Bank of America?

Mon, 11/15/2010 - 20:24 | Link to Comment SwingForce
SwingForce's picture

Paolo is/was the bomb. Shoulda tipped him 20%+, even a waiter gets that much.

Anybody ever work at Houston's? http://www.xtranormal.com/watch/7586879/

Mon, 11/15/2010 - 20:38 | Link to Comment deagle44
deagle44's picture

I bet he regrets selling his XOM.

Mon, 11/15/2010 - 23:28 | Link to Comment ebworthen
ebworthen's picture

If he has inside knowldege this would indicate Gold up, AAPL up because people will pay for entertainment in a Depression, and GET THE HELL OUT of financials.

Remember Citi at $1?

What happened to WaMu stock and Bondholders?

Ooops...

Mon, 11/15/2010 - 23:37 | Link to Comment own (not verified)
Mon, 11/15/2010 - 23:46 | Link to Comment treemagnet
treemagnet's picture

When the gorillas leave the bank tree you gotta think they know something about the banana situation the others don't/won't.

Do NOT follow this link or you will be banned from the site!