John Paulson spoke today at a Global FInancial Services Conference put on by UBS.
The below notes are making the rounds among traders. We’re not sure who wrote them first, nor can we verify that they’re accurate.
The quick summary shouldn’t surprise anyone:
He’s bullish on financials, still, bullish on gold, confident about the recovery, and thinks housing will be stable by 2012.
**Believes financials are under followed at present whilst earnings are recovering.
**Confident US recovery is going to continue. One weak segment impeding growth is housing. However transition rate of delinquencies has dropped i.e pool of delinquent mortgages is declining.
**Expect normal housing market by 2013.
**Assuming 7% S&P earnings and normalized market PE = 34% upside.
**Financials earnings expected to recover strongly as provision expenses decline.
**Sees 40-60% upside in bank stocks.
**Sees US banks as better capitalised an over-reserved vs European hence only European holding is Lloyds.
**Doesn’t see any good short opportunities in financials.
**Expect to see pick up in M&A in financials, particularly cross border.
**Does not think gold is a crowded trade. Only 15bps of pension fund assets held in gold assets