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Paulson's Gold Fund Loses 14% In One Month
2010 is not proving to be an auspicious start for the Paulson & Co. multi-billionaire (or any other hedge fund manager for that matter). Bloomberg has disclosed that John Paulson's recently launched gold fund has dropped 14% in January. Hopefully massive long exposure in Bank of America stock (anecdotally, and somewhat imprudently, unhedged with CDS) has made up for the disappointing beginning.
Hedge-fund billionaire John Paulson’s gold fund lost 14 percent in January, its first month of operation, two investors said.
The fund invests in mining companies and bullion-related derivatives, according to the investors, who asked not to be named because the fund is private. Paulson’s $32 billion Paulson & Co., based in New York, bought gold companies in its other funds as well as bullion rose about 24 percent in 2009.
While we are confident that as fiat-destruction accelerates, Paulson will ultimately be proven right. In the meantime, we won't feel too bad for the hedge fund manager.
Paulson earned an estimated $2 billion in 2008, according
to Institutional Investor’s Alpha Magazine. His Credit
Opportunities Fund soared almost sixfold in 2007 on bets that
subprime mortgages, or loans made to homeowners with bad credit,
would plummet.
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he was getting his advice from Leo
Who cares? I'm on the the other side of that trade. I'm going to be able to sleep easy with the masses rather than wondering what to do Next after I fired shot one, long guns and ammo protecting my stash.
The long-term trend of gold will always be up because it is a REAL asset. Also, don't forget, even after this correction, gold is still up 15% from last year.
Who cares what happened last year....its this year that's the question!
same as last year or better. I would tend to not listen to those whose predictions for the previous year were for it to go nowhere, or down, which is most of the same people who say its bad this year. And they will be just as wrong at the end of this year as they were on 2009's performance.
Who cares what happened this year...its next year that's the question!
R...i...g...h...t.....just like housing. Your anonimity is lost, Roy Bush...or should I say Ben Bernanke! heh heh
The long term performance of gold will always be flat. Because its money and a real store of value. Sure there are suppl and deman issues that can push the dollar price around, but in the day of these fiat empires, i know of no other riskless assets to buy as a storage of value. What several generations ago used to call savings accounts.
disclosure. got a lot of physical gold/silver
disclosure duex. got a lof of vicodin in me from wisdom teeth pulled today.
The long term trend of ________ will always be up because it's a real asset (like oil, housing).
Famous last words. Parenthesis mine.
The long term asset value of all things will be up...this is the nature of a fiat monetary system. This, of course, presumes stable demand and usefulness. Housing doesn't always go up because there are costs associated with it (taxes, upkeep, etc.).
The only question that needs to be asked is whether there is a bubble in a asset class do to the mis-allocation of fiat money. Perhaps, gold is in one of these bubbles due to a dollar carry trade and other factors. Simply, gold is one of the only asset that isn't someone else's liability....unless you own derivatives associated with it.
Not a fiat monetary system where the money is created by debt....which giveth and taketh away (with compounding interest)!
The dollar carry trade goes along with QE, which is ending, for now.
QE 2.0 is gold's next run up.
and QE 3.0 and 4.0 and QE Vista!
Yea really. I cant believe people think QE is ending just cuz the Fed says so. With all the mistrust here of the Fed why does anyone here QE is actually ending. Same group that believe the fed has exit stragey i suppose.
no way do they allow the depression to happen or another bad leg down, which is what will happen should they stop the spigot. So as you say, get ready for QE2.0. The question is whether its open QE, or they try to shadow it up and hide the real amount being spent (printed).
Bet ya oz of silver its BOTH.
Tell that to my tulip bulbs!
I've been holding these things since 1637 and they still aren't back to my purchase price. Maybe 2010 will be the year.
good wan
Actually Bush, there are a lot of questions that need to be asked. Here's three. I'll let you guess some of the others.
1. Why do you point out that housing has costs but ignore the fact that gold also has costs? That's the same rationale the government uses with GDP and the unemployment number, right?
2. Why would anyone who owns physical gold (and you guys are real easy to spot) spout off on a message board about it? The reason I ask is because gold, unlike my house, can be stolen while I am at the gun show.
3. Why am I wasting my time responding to you? I knew what you were as soon as I read "gold is one of the only asset that isn't someone else's liability....unless you own derivatives associated with it." Come back after you take Principles of Accounting 1 and then we can talk.
Nope. You're wrong.
The long term trend for gold is flat, more or less. That's the point. It's the long term trend of the dollar that is DOWN, along with all other fiat currencies.
(Long term means long term though... as in decades... it pops now and then, like now.)
Buying the pops and selling the dips never made anybody money though...
Losing 14% in one month never really made anyone money either...
in decades I'll be dead
"Lately in a wreck of a Californian ship, one of the passengers fastened a belt about him with two hundred pounds of gold in it, with which he was found afterwards at the bottom. Now, as he was sinking — had he the gold? or had the gold him?"
He is likely going to be seen as another "flash in the pan" hedge fund guy that had one outstanding year, was subsequently worshipped, then blew up massively.
It happens all the time.
I'm sure here is crying all the way to the bank. Id love to have 1% of his fortune and retire
This instrument is off 15% in 6-7 weeks. Once the safe-haven, hard asset mantra re-emerges, this 1050 area will look like a decent risk/reward entry point. Gold is finding support the last two days down here between 1050-1060 area despite carnage all around it. DH, are you listening?
And before that, 1080 was STRONG support. Until the descending triangle broke down and it wasn't anymore...
Screw gold. Canned ham bitchez!
Alright, Bates, you've asked for it, now you're going to get it: good call on the descending triangle with regard to gold's apparent consolidation. Your call was spot on, and Chop Shop has been beating the drum for some time with respect to a similar move. There. Now that your ego has been duly stroked, some of us would enjoy some respite from your self-congratulatory outbursts. With respect to gold, 1045-1050 is actually quite strong support justified by a rather momentous IMF gold purchase last fall taking place around that region; 1080 was only support for those envisioning a pennant where you saw a descending triangle. The pumpers were clearly permitting confirmation bias to take hold of their perspectives: very dangerous in trading. That being said, as you have clearly not received the recognition that your ego demands, here it is. Good call.
Now, let's continue assessing the gold market agnostically, as the metal is merely an asset. It goes up, it goes down, and sometimes, it moves sideways. The bugs view it as the quintessential currency regardless of its relative value to fiat, whereas its detractors point to the nadir of a super-cycle as justification for its imminent plunge. They've each been right and wrong and have been passing the baton for the last 50 years. As for the inevitability of this dollar rally igniting October '08 part deux, the jury's out, and this show has a broader time horizon than most would estimate; I, for one, am not yet convinced that the majority of the focus on the Eurozone problems isn't another attempt at corralling the herd into an onslaught of treasury issuances.
Your technical insights are appreciated. You mentioned something about an accounting education in an earlier post; as a CPA I, I enjoy conversing with the other bean-counters here on ZH, especially given my dearth of "Street" experience, though I ain't no stranger to the streets themselves.
As a non-financial person, I would like to hear someone's professional opinion on whether the dollar is at the zenith of a supercycle.
I would contend that we are far past the $'s apex; rather, we are likely en route to its nadir. There will be eddies along the way, but the long term trend is down, regardless of whatever circular logic the DXY index may exhibit. As soon as we have some form of monetary stability in any currency, that currency will exhibit a rising trend relative to gold. During times of credit stress, gold's currency characteristics manifest. Periods of relative credit stability (oxymoronic, thus the qualifier) generally result in gold's currency characteristics ebbing. I would note, that currency-like characteristics in silver prices are quite frightening from the perspective of international political stability, as astronomical silver prices reveal the fact that the plebes have awoken from the fiat-induced opium daze.
I'm not a professional but just judging by how fucking horned out this thing is there is NO WAY possible to keep it going without a 4x devaluation of the dollar which would basically freaking kill 60 million americans. I don't think you can get a more over scenario.
"I would like to hear someone's professional opinion"
Combine these 2 if you're an intellectual.
http://www.scribd.com/doc/22733555/A-Forecast-For-Real-Estate
Note that this was written in 2001 , not 2008
http://www.dunwalke.com/gideon/q301.pdfalso note that the price for gold is usually only going down on the CriMEX. What a surprise that its a paper market, while the others are physical so they can just keep effectively naked shorting into the market to drop the price.
"Did I say GLD? ...No, no, I meant GILD."
Golly, this cant be true!!! They assured me the fix was in !!!
Alan Greenspan to Join Paulson & Co. Inc. Advisory Board
http://www2.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/01-15-2008/0004736450&EDATE= NEW YORK, Jan. 15 /PRNewswire/ -- Paulson & Co.
http://www.takeitbackday.org/
LOL perfect timing! Thank you for the links!!!
"Thank you for the links!!!"
Check it out daily because it's constantly updated and put it on your toolbar.
http://www.takeitbackday.org/
this is from news from 2008. not 2010.
this is from news from 2008. not 2010.
This is a compiled explaination of the causes of the fnancial meltdown and the news of the day that is applcable to it now.
It may help if you invest more than a microsecond of your mouse driven, ADD time before you dismiss it and pass judgement for everyone else who may find it extremly informative and useful.
A team of editors and maintain it 24/7/ 365
Now reply and make it all bout you.
Google & Bloomberg has a news page for scalpers, net surfers with ADD.
http://www.takeitbackday.org/ is for those with a little more substance.
14% bitches!
Paulson's gold fund launch right at Dec 1, 2009 may well become for gold what the Blackstone IPO was for private equity in 2007.
I know he likes KGC. I actually sold some puts on it, gonna try to snag it up for a bit more of a discount.
His name is John Paulson. His name is John Paulson.
Does anyone know how much money the gold fund has raised?
S.E.C. v. Band of America, C.A. Nos. 09-6829 and 10-0215
"A hearing to consider the proposed settlement in these two cases will be held at 2 p.m. (not 3 p.m. as previously scheduled) on Monday, February 8, 2010 in Courtroom 14-B of the U.S. Courthouse, 500 Pearl St., New York, NY. SO ORDERED."
Jed S. Rakoff, U.S.D.J., Feburary 5, 2010
That ought to be interesting. Too bad the hearing transcripts in that case don't post on PACER.
I love the three year lock up. The idiots that threw their money into this hoped they can ride his coat tail into another homerun a la subprime CDS. The jury may still be out on the outcome, but one winner is certain: Paulson will milk these idiots 2% annually no matter if he makes money or not!
john peniston?
Wait, he's going to lose over double that amount at the end of this year. Gold commercials popping up all over the TV nowadays. Ding! Ding! Thank you for playing this game.
Leo, please be watching gold. Please spend a few hours a day watching it move compared to the DJ and the DoeLarr. Gold is the strong one.
HUI up over 4% on a net flat day for gold. Huh... that's never portended anything. I think the heading of this article says it all:
http://finance.yahoo.com/news/Gold-Loses-SafeHaven-Status-cnbc-1840648925.html?x=0&sec=topStories&pos=6&asset=&ccode=
For the First. Time. Ever.
I liked the very last line:
For the best market insight, catch 'Fast Money' each night at 5pm ET on CNBC
mr no clue on gold leo lol
as they said a few years ago gold will never get above 500... well look out the window =gold is now 1060 .. where you been sleeping the last 300% move here . since the brown bottoms 260 british sell .
wanna bet .. put some real nerve with the verve .
There is no place for hero-worship in this business.
You're only as good as your last transaction.
wrong my nickle flipping friend .
life is a journey not a one night stand
Absolutely wrong... you are as good as your bottom line ... you make eight million, lose six million, you are still ahead. Prefer to lose 10, make 8 and call yourself successful?
Absolutely wrong... you are as good as your bottom line ... you make eight million, lose six million, you are still ahead. Prefer to lose 10, make 8 and call yourself successful?
The law of averages will catch any and all money managers. I honestly believe that if there is a statiscal analysis of the totality of money managers,over a long enough period of time there will be no significant deviation from a mean which shows a loss for the total pension systems(I know TD loves statistial analysis). The only people who make money over that period of time will be the money managers and Wall St. Why would anybody believes that he/she will strike it rich if they give their money to somebody else,is beyond me.
Fiat destruction? Dilution perhaps. The old ways do not apply today. Change your way of thinking.
40muleteam borax
OT.. Dow straight up @3:15... PPT takes care of you even when you sleep..
from -150 to even in 5 minutes?!? Look at the spike.
Gold held strong last night as the economic tsunami crushed asia once again. Not only do I think asians like their gold (they want the rest back Prescott!), but miners did well today! Gold hit another resistence level that I was not aware of. I thought that the next holding level was $1040 and I also suspected the DJ would move to around 95 hundo, but now I am thinking the "China put" may have bumped up support. Thank you China!
BUY SILVER!
Fuck that. They couldn't get gold to a 1040 support. The chinese are off drunk off thier ass celebrating chinese new year. The bejing put, is in reality a very strong very stubborn global support program. Not a bejing put.
Well, he's been proven right before, hasn't him?
http://www.deepcapture.com/john-paulson-and-the-greatest-pump-and-short-...
I have an urgent message for the likes of Leo: do not mess with Gingrich or GWB. You have about 30 minutes to get out.
Looks like a good entry point. I am buying.
If my math is right, he made $2B in 2008 and lost $4.48B in the last month. Kind of tarnishes that halo. But I still like his thesis long-term. That said, I expect a pull-back that will hurt gold and miners in the short-term (2010), the gold thing, I believe, will pay off in late 2010 through 2013...just my SWAG.
Your math is wrong. The $2 billion was Paulson's personal score, not his fund's.
Are any of the gold ETF's making printed certificates available?
When the fiat currencies start blowing up, they could be useful.
Another thing that could work is to take the gold and stamp out little discs with standardized amounts of gold, with an assay as to the amount and fineness.
What a novel idea !
+ 10
Heck with certificates and coins…that’s so twentieth century…imagine a whole supply chain where every vendor in the chain has an account at a discount broker and does account to account transfers of shares of GLD or a new ETF constructed as a basket of highly liquid assets.
gold will never climb above 600 lol opps its 1070
gold in march begains its climb higher .. put this on your computor ,, it will be 1600 end of year ,, paulson will be up 50% in his fund .. whist the rest will suck big time ..
the egg timer nickle flippers ,, will need a new starbucks napkin to wipe big egg off their acne pocked diaper faces
"The fund invests in mining companies and bullion-related derivatives, according to the investors, who asked not to be named because the fund is private. "
Oops, there's the biggest problem...
I recall that his yearend filing showed ownership of 35,000,000 shares of GLD. (=$3.6 Billion.)
Paulson is a genius - I invested with him in 07 and 08 - but you gotta wonder why he is still raising money. Isn't $30, 40 Billion whatever enough?
Don't you reach a point of diminishing marginal returns? (For investors, anyway.)
Paulson - a more respectable form of Madoff's Ponzi scheme - $32b fund, 1% management fee is $320m a year. Gold is up in long run, by then we would all be dead. Gold to hit below $850 by June 2010, S&P below 900, Euro at 1.25.
I have no idea why anyone would "invest" in gold...it's not an investment, it's a physical alternative to paper with much less industrial-demand-driven price movement than alternatives like Ag or Pt, and easier storage than NG or oil. Pretty simple.
That said, with London and NYMEX settling now cash only except in certain circumstances (probably connnected people), the price discovery mechanism for gold is pretty much broken. Who knows what it's "worth." But this is the case for all assets. When GS can rejigger a futures basket and cause gasoline to fall to $1.50 when oil is in supply deficit, the paper markets are mispricing the hell out of things. Trade your dollars for them at cheap "prices" while you can I guess
People "invest" in gold when other investments are unattractive, to volatile or sideways in a potentially inflationary environment where bonds, CDs, MMAs and cash fail to preserve wealth. Gold is the real cash.
GOLD ETFs:
GLD
IAU
He was early in his MBS call too but it payed off.
The difference is his credit fund had a max drawdown of 5%. People got suckered into his gold fund thinking it would be a similar low downside/high upside bet on hyperinflation. It is obviously not. It appears to be a leveraged version of a gold stock/bullion investment with no downside hedge whatsoever. Good the suckers are finding this out now after they signed a three year lock down.
Good point.