• 10 Aug 2011 at 3:34 PM

It’s Better To Be John Paulson Than To Work For Him

By Matt Levine

Great news Paul Krugman! A lack of trees and fake-doc mortgages add up to a down (31%) YTD performance for John Paulson’s levered Advantage Plus and (21.5%) YTD for the regular Advantage. But gold bugs will also have something to cheer:

There appears to be a sliver or two of good news for Paulson. His gold fund is up about 6% for the year, according to an investor’s calculations. The bulk of Paulson’s own money is in gold, and in gold-denominated share classes offered by his firm, so he’s making out much better than many of his investors.

Not clear how the gold-denominated classes have performed but with gold up 25% YTD Paulson is probably not doing much worse than the S&P with his own money, which is something.

On the other hand if you work for Paulson and are thinking about maybe withdrawing money to put kids through college, buy a nice house, or get out of the way of a falling knife, maybe you should grow a pair and get back to work:

One big reason the funds didn’t see many redemptions: Over 36% of the cash in the funds is from the firm’s employees, according to someone close to the matter.

John Paulson Hits A Soft Patch [WSJ]
Matthew Goldstein: The Perils Of Paulson [Reuters]

Comments (10)

  1. 1
    Posted by Oooops | August 10, 2011 at 3:41 PM

    I think it's tiime to re-name the funds.

  2. 2
    Posted by woo | August 10, 2011 at 3:43 PM

    204 words. new record low?

  3. 3
    Posted by Bandersnatch | August 10, 2011 at 3:50 PM

    He'll be crying himself to sleep tonight, on his huge pillow stuffed with money.

  4. 4
    Posted by Guest | August 10, 2011 at 3:50 PM

    Paulson is going to be forever known as a one trick pony. Yes that one big bet made him a billionaire. However, he will never be in the same class as legends Soros, Druckenmiller. S. Cohen, Robertson, Steinhardt, etc. who pumped out amazing returns for decades. Paulson's fund is finished.

  5. 5
    Posted by Anal_ist | August 10, 2011 at 3:56 PM

    I suggest starting a new fund with a different permutation of your name or initials – - avoids that pesky high watermark.

    -J Meriwether

  6. 6
    Posted by 2_Small_2_Bail | August 10, 2011 at 4:17 PM

    This guy is a legend for his ability to go against the grain. When others told him "some peole won't like when you bet against MBS that you helped put togehter" he said "Fuck you". Then others questioned him with "some people won't like that you bet on Chinese trees in your funds and gold with your own money". Guess what he told em?

  7. 7
    Posted by HAM05 | August 10, 2011 at 4:20 PM

    my only solace is that he will not be comfortable. while hypoallergenic, it is very hard and holds heat way too well.

  8. 8
    Posted by Guest | August 10, 2011 at 4:26 PM

    Hi Lenny!

  9. 9
    Posted by Gues | August 10, 2011 at 4:51 PM

    Yes, Bess is probably giving him dummy IB cases where he can plot a lot of charts and the like.

  10. 10
    Posted by rick | August 10, 2011 at 4:51 PM

    hard fail

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