Paulson Flagship Fund Loses More Than Half Of AUM In 2011

Tyler Durden's picture

Over a week ago Zero Hedge broke the news that Paulson's Advantage Plus fund was down more than 50% for the year. Today, Reuters has finally confirmed what our disgruntled throat (don't disparage those who express contrarian opinions just because they refuse to brown nose) reported way back when. "There will be no holiday cheer for hedge fund manager John Paulson this month, as his dismal performance in 2011 is capped off by another miserable performance so far in December. The Paulson & Co.'s Advantage Plus fund, which has been the firm's worst performer all year, is down another 9 percent through December 16, sending yearly losses to about 52 percent, according to a person familiar with the numbers. The Paulson Advantage fund, the firm's largest portfolio, is also hurting again this month, declining about 6 percent. The fund is down about 36 percent year-to-date." Of course, those who follow us would know there was a reason for our increased derision over the past 10 days.

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Dr. Engali's picture

I wonder if he is done selling his GLD to meet redemtions?  

Pladizow's picture

In the absence of FRAUD, his true genius is brought to light!

theXman's picture

One and done. Another testiment to Talib's book of Fooled by Randomness.

zaphod's picture

Remember, Paulson has never made an honest dollar investing.

The only way he did well back in 2008 was to stuff MBS full of crap, rate it himself as being super good, then going heavily short on the same MBS.

The guy is a crook and his past success a bunch of nonsense. -50% represents his true ability.

(BTW I'm up > 10% this year Paulson)

Git_Naked's picture

Couldnt happen to a better guy.

Maybe you're just not screaming at people loud enough. Last I heard that was your employee persuasion method of choice.

Flash in the pan...

johnu78's picture

Way to go Paulson you've made yourself as reliable as Jim Cramer!!!



mkkby's picture

No stops or any sell discipline.  That tells me these funds are worse than the typical retail investor playing buy and hold.

junkyardjack's picture

“I asked you to buckle up. Now I want you to put on your shoulder harness.” - Steve Jobs

AAA21's picture

Looks like Paulson's gonna have to rename his fund and call it the PAULSON DISADVANTAGE PLUS FUND!

Jonas Parker's picture

Was Corzine giving him investment advice?

redux2redux's picture

No, they are just in a race to see who can loose the most.

Are there financial awards given out at the end of the year for these epic faceplants?

Zero Govt's picture

I dunno but Warren Buffet is also in the running of the bankrupt Donkey Derby Awards..'s (Over)Optimist from Omaha, Busted-Flush Buffet, hobbling up the outside rail, the Democrat-Destroyer Caustic Corzine stumbling up the middle and here up the inside(r trading) rail limps Leaking-like-a-Sieve, Insolvent Paulson

American Capitalism... an inspiration to us all 

halflink123's picture

LOL...what's a donkey derby

But anyways, yeah Warren Buffett has been wrong every time he's opened his mouth.  But he bought a newspaper, so all's good.

I wish these guys had all been forced to take the market's medicine in 08.

kaa1016's picture

Was he really such a one hit wonder riding the coat tails of Pelligrini? I guess so. Then again, it looks like he made the same bet as many other "hedge fund" managers being on the wrong side of the financial stocks trade. A true "hedge fund" should never have a 50% drawdown in one year, ever!!!

Toolshed's picture

Wow......Is it possible that this performance is NOT an accident? I mean come on. A complete amateur could probably do better by using darts. Just sayin.

TheSilverJournal's picture

If you can't hold it, you don't own it.

GeneMarchbanks's picture

Paulson needs to get out of the game. You got your little subprime fame, now get out and take Bill Gross with you.

The Axe's picture

Robottrader has been the lead manger on paulson's desk......that explains things...

Joebloinvestor's picture

He is playing with house money and will be for a long time.



earleflorida's picture

all gamblers lose in the end --- it's just the way the human psych works

called greed

and as for the casino's,... you can't win with an empty house

ZeroPower's picture

My guess is he bet big, BIG, on QE3 and didnt get it in time for eoy. Those that think its not coming in 1H12, i suggest you have a look at the market all Dec. Trying to go down, but rallying as the smart PMs are loading up.

orangedrinkandchips's picture

Look, the ONLY move that Johnny had after the big haul was to QUIT. Return AUM to the prospective places and have yourself banned from the industry. But no. It's human nautre, I know first hand, but glad someone else showed it to me.

There was no other move for home-boyee. He shot his wad and nothing will compare to that banner year he had and you have to go out on top.

And, for those who did invest with him, they too should have split when the splitting was good. "it is enough"


Good lesson learned for all of us!

falak pema's picture

Paulson is a good samaritan, he is doing this for charity. Like Sandy Weil. They are doing it for charity. And russian oligarchs. Usa is planning an Oligarchical ethnic switch. The Russians are a coming to take out the kings of ummm...the Yentl strain, of Soros and Weil. You know the lovely guys from the church of sinagogg-maggog on hill. I have nothing against any ethnic group, except those who say ethnic group X is uber alles. Now that is a problem as that place has already been taken. I wonder why the small arms lobby don't understand that. The Apache were the greatest americans past or future. Anybody with the Apache ear doesn't need Marconi, Edison or Google, its God given an Apache ear. It can see around corners and hear hoof beats that haven't yet beat. That is neat. Its ahead of the curve. It beats Kyle Bass as jumping trout. All from a dumb ear, in fact Capt Nemo used it as his periscope on Nautilus, the Apache ear, non patented invention of God's own race. Hail Geronimo! Zarathustra had nothing on you. Nieztsche needs to rewrite his masterpiece. With Geronimo as last living man on Apache continent!

Eally Ucked's picture

That's just shows you how vulerable gold price is to stock market (GLD). He had to sell winners to cover losers at the same time pulling down winners because of limited size market, just accelerating his loses. Love it we can wait and he can't.


css1971's picture

Wow. Can I have his job?

Barometer's picture

He must be getting normal Goldman client advice now

WTF_247's picture

He is misanticiapting time frame based on prior success.  His thesis is probably right in terms of interpreting the eventual outcome of current events, but like everything, the prediction of time is very difficult.  When you think an event may take a few months, if it takes much longer than that you get killed (well you and everyone else making the same bet) as people bail on the positions.

Even during the subprime, timing was everything.  You could have been short FNM, FRE, all the mortgage insurance names etc and not made anything or actually lost if you went in too early.  They really ignored most of the obvious writing on the wall for almost a year, before finally tanking into oblivion in a few month period of time.

This time around there are more people "looking" for the same bets, where as prior many people were not and got trapped into holding the financials long.  This causes more of the herd to all make the same bets.

This is no different than stating a momentum stock is a short only when the shorts give up - like NFLX and others.  Shorts keep using logic to initiate positions short while its going up, and are all forced to cover for large losses, forcing the stock even higher, sucking in new shorts.  Eventually the majority of the shorts give up because of the losses, then the stock tanks.

swani's picture

What is up with the ZH avatar?

JW n FL's picture



and he got robbed for $2m..

The New York-based hedge fund giant is among the victims of an alleged fraud scheme that used stolen financial information to steal more than $2 million, New York City prosecutors said Friday. Among those to have their information, and money, stolen is Paulson.

The huge alleged fraud ring encompassed some 55 people. One of its alleged leaders, Tracey Nelson, was arraigned Friday. According to prosecutors, the former UJA-Federation check processor had copies of contributor checks in a safe at her home.

midgetrannyporn's picture

What goes around comes around.

Global Hunter's picture

One has to almost try hard to lose that kind of money

Jonas Parker's picture

I wonder what his performance bonus will be THIS year?

GFORCE's picture

This site should be renamed ''. Yeah Paulson's had a tough year but he's still $3bn richer than anyone on this site.



midgetrannyporn's picture

When he is getting his fudge packed in alcatraz that will be shady-n-fraud getting his just desserts.

eurusdog's picture

yeah , but his decision tree is pointing downward right now!

mkkby's picture

Unless he's dumb enough to manage his own money.  I hear he uses a Vanguard index fund.

swani's picture

Aren't you being a little nasty to your fellow Zhedgers?

Besides, it's not about how much money you have, it's about winning. Don't you know?


rawsienna's picture

As I have said before -- the idiots are the investors who gave money to a man that had zero experience in Macro investing and Zero experience in managing that amount of money.  He had one great trade  .. that is it.  Only on wall street can such failure be rewarded. Given AUM, the loss puts him in the red for his career P+L but his personal pay in the billions.  At least this time it was not taxpayers money at risk.  What a joke.  

chindit13's picture

"the loss puts him in the red for his career P&L"

Interesting point.  It may well be true that his overall trading is now negative.  That makes it not quite a Ponzi Scheme, but rather something that future market wags will call a Paulson Scheme.  It says something about the industry that someone can be net negative but still walk away with $5-10 billion (depending on how much of his own money he had at risk in his own funds).

"Carrying charges, man.  Carrying charges."  Senor Ferrari, Casablanca

wolfgang0007's picture

What happens when all the funny money disappears from this market, who will be left holding the BAG,,,

It better not be you...:)





outamyeffinway's picture

Karma's a bitch motha fuckie!

TheDuke's picture

Maybe he had some sort of Brewster's Millions delusions or something... he's got to lose it all to win it all? Epic.

Heroic Couplet's picture

The more bankers, hedge fund managers and day traders destitue and on food stamps, the better off the Unites States will be. We're only talking about three states: New York, New Jersey, and Connecticut.

No one on Main St. gives a crap. The "gains" of the past went to the top 1%. It's fair if the top 1% get their butts kicked.

mendolover's picture

I don't follow on Tw.  Nice six pack ZH!  haha

Argos's picture

From champ to chump.  That didn't take long.