John Paulson Has a Rough June, Contributing to 8.8% 1st-Half Slide
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After beating that the economic recovery will take hold in the U.S., billionaire investor John Paulson lost 6.9 percent last month in his Advantage Plus hedge fund, bringing the total drop of the investment year-to-date to 8.8 percent, according to a report from Bloomberg on Wednesday.
Paulson's funds had an opportunity to profit heavily from the from a jump in the stock markets, especially financial services companies, according to sources familiar with the matter cited by Bloomberg. However, the suffering in the stock market in June held the funds back.
According to the sources, Paulson has remained bullish in the face of the weaknesses of the stock market and a slew of concerning data over private sector employment in June.
Nearly two-thirds of the investor’s $33 billion in assets run by his New York-based Paulson & Co. are tied to the Advantage Funds. The Advantage fund fell 4.4 percent last month, while losing 5.8 percent in the first half overall.
According to regulatory filings, Paulson's company increased its stake in financial companies in the first quarter by 6.5 percent.
Paulson has a large stake Citigroup Inc. (NYSE: C), which has increased 18 percent so far this year, but has slowed since rising 46 percent year-to-date on April 23. He also owns 167.8 million shares of Bank of America (NYSE: BAC).
The investment guru also has warned inflation will increase over the next three to five years, leading him to buy gold and mining shares. The firm also has funds shares that are gold centric, which increased 7.3 percent in June and are up 13 percent for the year. Individual gold stocks that he owns includes AngloGold Ashanti Ltd. (NYSE: AU), Kinross Gold (NYSE: KGC) and Barrick Gold Corporation (NYSE: ABX), among others.
Paulson's reputation took a blow earlier in the year after his hedge fund was at the center of the SEC's fraud case versus Goldman Sachs (NYSE: GS). The SEC claims Goldman created a doomed-to-fail CDO hand-picked and shorted by Paulson without disclosing Paulson's role to investors. Paulson was not changed in the case.
Paulson's funds had an opportunity to profit heavily from the from a jump in the stock markets, especially financial services companies, according to sources familiar with the matter cited by Bloomberg. However, the suffering in the stock market in June held the funds back.
According to the sources, Paulson has remained bullish in the face of the weaknesses of the stock market and a slew of concerning data over private sector employment in June.
Nearly two-thirds of the investor’s $33 billion in assets run by his New York-based Paulson & Co. are tied to the Advantage Funds. The Advantage fund fell 4.4 percent last month, while losing 5.8 percent in the first half overall.
According to regulatory filings, Paulson's company increased its stake in financial companies in the first quarter by 6.5 percent.
Paulson has a large stake Citigroup Inc. (NYSE: C), which has increased 18 percent so far this year, but has slowed since rising 46 percent year-to-date on April 23. He also owns 167.8 million shares of Bank of America (NYSE: BAC).
The investment guru also has warned inflation will increase over the next three to five years, leading him to buy gold and mining shares. The firm also has funds shares that are gold centric, which increased 7.3 percent in June and are up 13 percent for the year. Individual gold stocks that he owns includes AngloGold Ashanti Ltd. (NYSE: AU), Kinross Gold (NYSE: KGC) and Barrick Gold Corporation (NYSE: ABX), among others.
Paulson's reputation took a blow earlier in the year after his hedge fund was at the center of the SEC's fraud case versus Goldman Sachs (NYSE: GS). The SEC claims Goldman created a doomed-to-fail CDO hand-picked and shorted by Paulson without disclosing Paulson's role to investors. Paulson was not changed in the case.
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