John Paulson spoke with investors last week, presumably in order to address his poor performance recently.
We have notes of the call and have summarized the key points below. We’ll embed the document in a moment.
Bottom line: his thesis hasn’t changed despite his being down 20.9% YTD in his Advantage Fund.
He says the biggest macro risks out there are:
- ECB voluntary debt rollover
- German Plan bond exchange (technical default)
He’s got some short positions “in banks exposed to these issues, also trading CDS. [He] was in this trade in early 2010 before it was in the headlines.”
- he’s short Euro bank stocks, and has made some money there, except in US Bank and Lloyds, where he’s lost money on the long side.
- he thinks stocks are cheap
- housing won’t recover for another 18-24 months
- He believes Anglogold is going to bounce back big time, but he’s losing money in gold mining stocks for now.
- He had the position for many years
- There are “ongoing improvements in the company’s business mondel, moving to growing trees, not just harvesting, and dual listing were reasons for being in stock
- “Allegation” in May hurt stock dramatically
- He hired PWC to audit E&Y’s work, but it will take 2-3 months
- Cannot comment on current views on that stock for a variety of reasons
The complete notes are below.
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