Yesterday, Bank of America held an investor call with hedge fund manager John Paulson to discuss his investment strategy.
The timing was strategic, of course, as last week, Citigroup announced that it would ending its $410 million relationship with Paulson, whose performance has been dismal to say the least. Paulson’s flagship fund, Paulson Advantage was down 36% in 2011.
So you might expect that financial advisers and investors alike would be asking tough questions about how Paulson would be moving forward — about how he might be changing is strategy.
According the Bloomberg Businessweek, that was not the case. Paulson made no mention of his performance on the call. Instead he discussed “various scenarios for gold prices, the euro, and the U.S. economy.”
Not that anyone was prompted to expect much from the beginning. The Wall Street Journal reports that Bank of America execs hosting the call got on it 15 minutes late and started the conversation by praising Paulson for his “high quality work” and investment in gold mines.
In the end it was Paulson who brought up the Citigroup redemption, but he also noted that other investors were sticking with him for the most part.
The most damning criticism came from Josh Brown, who was on the call and reported back on his blog, The Reformed Broker. He’s the only one who reported about specifics on the call, saying: “John was asked to defend his overweights to the casinos like MGM and CZR. The concern seemed to be Macao was cooling off and Vegas was dead – what’s the thesis here?”
In terms of his own analysis, Brown admitted that he wanted to me “more impressed” though he came away with the call with a “deep respect” for Paulson’s thought process.
…of all the macro calls I’ve been on – and let me tell you something, I’ve been in meetings with Felix Motherf*cking Zulauf and at dinner with Jim Chanos – this one gave me the least confidence that there is any kind of hidden depth or the potential that the manager is seeing something no one else sees.
So to sum up, I have a ton of respect for John Paulson…but if I were a Merrill broker with a lot of client cash parked in his funds, I might be facing a really tough decision this fall about whether to stick it out.