Paulson, a successful hedge fund manager, is considered an investing master by those who think that betting against the U.S. real estate industry – deriving a cash advance each time someone was foreclosed upon – is an acceptable by-product of a deregulated stock market. Thanks to the bursting of the United States housing bubble and some shrewd choices with U.S. financials, Paulson is a billionaire. He won’t be obtaining a pay day loan to cover his home mortgage at any time soon.
Getting Citigroup with Paulson
Several see Paulson as a bad thing. They say that when it comes to Wall Street, he embodies what is wrong with the idea. Paulson has began to change his position after making about $15 billion betting in 2007 against the U.S. housing sector, getting him named a “guru”. The U.S. economy getting better is his new bet. This is where all his money has gone. Part of this meant he invested in different indexes. Part of this “after the fall” outlay he put down was a bet on high gold prices and a bet on rebounding house prices. About $1 billion was earned in 2010 by Paulson’s stake in Citigroup using Paulson & Co. Over the past year, Citigroup’s share price shot up 50 percent.
About $35 billion in investments are owned by Paulson & Co. right now. In the beginning of 2010, John Paulson and business took small lump gains while getting into the double digit gains later even though most hedge funds avoided the volatile industry, accounts Reuters. For 2010, the Paulson Advantage Plus fund had a 17 percent rise for the year. Also, there was a 35 percent jump in Paulson’s gold investments.
Why does 17 percent matter?
When it comes to Paulson being successful, the Globe and Mail points out that the 15 percent gain the S&P 500 had is not much farther down than the 17 percent the Paulson Advantage Plus Fund gained. The Canadian newspaper’s opinion could possibly be wrong though. Even though Paulson did invest “against-the-bubble” hurting the economy in order to make himself millions, the federal regulators did not do anything about this. Yet few accept the excuse.
Articles cited
The Guardian
guardian.co.uk/books/2010/mar/07/the-greatest-trade-ever-by-gregory-zuckerman-review-heather-stewart
The Globe and Mail
theglobeandmail.com/globe-investor/markets/markets-blog/paulsons-5-billion-haul-big-deal/article1886319/
Reuters
reuters.com/article/2011/01/25/us-hedgefunds-paulson-idUSTRE70O4G820110125
Wikipedia
en.wikipedia.org/wiki/Credit_default_swap
Martin Rogen 