Introducing The "Paulson Overhang" - Everything Paulson Sold In Q4 Has Soared
The man whose fund is a pale shadow of his once invincible self, especially around the time he could tell Goldman which securities to short for him, with hapless and gullible Euros on the other side (but, hey, Goldman makes a market) continues to be the laughing stock of the market, following the latest 13F (with $13.9 billion AUM compared to $20.7 billion as Sept 30) release by Paulson. And considering the complete lack of liquidity in the market in Q4 (which is only getting worse now), the portfolio unwind of Paulson's holdings explains some very acute securities moves in November and December of 2011. Particularly the collapse in gold, which contrary to what economist Ph.D.s will tell you, was not due to technicals, or fundamentals, but due to Paulson dumping another 20% of his GLD, which is now just $2.6 billion as a share class, compared to $4.6 billion as of June 30, we for one can't wait for him to dump it all so that there is no more "Paulson overhang" in gold. Of course since this is a gold share class, it won't happen as long as Paulson & Co survives, but one can dream. What is far more laughable is that in the fourth quarter, Paulson dumped his entire Bank of America common stake (of which he had 64 million shares), his entire Citi common of 25 million shares (worth $627 million at Sept 30) and more than half of both his Capital One and SunTrust stakes, which went from $880 million to $401 million, and from $546 million to $210 million. He also cut almost his entire stake in Wells Fargo which went from $575 million to $96 million. That sure is some conviction in the always appropriately named "Recovery Fund." It is oddly ironic that precisely these stocks are the ones that have soared in Q1 as the Paulson overhang has been lifted.
So has Paulson flipflopped again, and is he chasing them one more time? We will find out on May 15. What we do know that he flipflopped on is JP Morgan which he dumped entirely in Q3 only to rebuild a $157 million stake. And while he has been selling across the board, Paulson did add see his Delphi shares hitting his AUM as per the IPO, of which he had 51.7 million shares at December 31. Paulson added some nominal holdings in Pharmasset, Goodrich, Medco and El Paso, and a bunch of others.
Once upon a time, having Paulson invest in your company was a blessing and a sure way to pick up 5% immediately. Alas, at this point, it is likely quite the opposite.
The top 50 holdings are presented below:
His biggest September 30 holdings are here: