We know 2011 was bad for John Paulson’s Paulson and Co., but onward and upward.
Now it’s 2012 and it’s time to put the past behind us (this will be much easier for those who didn’t invest in his fund, obviously).
But for those who did, Paulson has one shining (literally) light for them at the end of his recent investor letter. It seems like the only investment he’s excited about this year is … Paulson Gold Funds.
Here’s why (from the letter):
We anticipate that the divergence between gold and gold equities will narrow, given the booming earnings that a number of the major gold producers are delivering...We remain excited about the outlook for the Paulson Gold Funds over the next few years. Central banks have engaged in unprecedented amounts of quantitative easing, while investors are increasingly losing faith in paper currencies. The sovereign debt crisis in Europe continues to threaten the stability of the global financial system. In this environment, gold stands out as the most stable and credible currency alternative and we would argue that the potential upside in gold outweighs the potential downside. Gold equities are attractively priced given the strong financial performance than many of these companies are delivering… The Paulson God Funds, which are designed to outperform gold in a rising gold price environment, provides investors with a hedge against inflation and more.