Hedge Funds

Paulson And Co Not Shedding Any Tears Over Investors Who Don’t Know What’s Good For Them

“We know that about investing with John Paulson. He makes macroeconomic calls,” says Joelle Mevi, the chief investment officer of the New Mexico PERA [which piled into the fund after 2007 and has since  liquidated its holdings]. But “we started to notice a consistent underperformance of the fund, and we were noticing a bit of style drift” — investor-speak for getting into areas outside one’s expertise. And, Mevi says, “The Sino-Forest issue was notable.” “If you’re going to come in and then leave, come in and leave, I don’t think you’ll reap the benefits of investing with us,” Paulson says. “Investors that do the best, and have done the best, are those that stay and compound at above-average rates over the long term.” [Bloomberg Markets, earlier]

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30 Responses to “Paulson And Co Not Shedding Any Tears Over Investors Who Don’t Know What’s Good For Them”

  1. merriam webster says:

    "Style drift" = "losing money"

    – Hedge fund dictionary quant

  2. translation says:

    “Investors that do the best, and have done the best, are those that come in right before this one huge ass lucky call we made, then take their money and run before we go back to our long term track of underperformance.”

  3. Big Bob says:

    i flipped "heads" 20 times in a row once too

  4. Abe_Froman_ says:

    Til the night closes in…

  5. Cliche Guest says:

    “Investors that do the best, and have done the best, are those able to see the forest for the trees–those who stay and compound at above-average rates over the long term.”

  6. guest says:

    When to pull out is a very underestimated skill!

    -A Cromartie

  7. Guest says:

    Investment rule #8: Style drift is never an issue when you're killing it.

  8. The Truth says:

    No one goes to gamblers anonymous when they're winning, they're not addicted, they're rich. No one is accused of style drift when they are making money, they're called successful. But start losing money, NOW you're drifting.

  9. UBS says:

    Mr. Paulson – Can you please elaborate on the positive effects of compounding negative returns?

    • Ken Lay says:

      I am glad you asked that question. From any point all you can lose is a 100%. But, you can make many multiples of 100% ! capice ?

  10. Eli Cash says:

    John – this is how you do an interview…
    http://www.youtube.com/watch?v=Bj1DZKOeZhI

  11. guest says:

    The body language in that picture is the perfect answer to anyone asking about returns, money, etc.

  12. Broker/dealer CEO says:

    Massively leveraged macro bets? Interesting…

    -Jon C.

  13. N. Roubini says:

    come in and leave = in & out

    what's not to like?

  14. canadur! says:

    “We’ve gone back to our traditional strategy, which is operating with smaller amounts of net exposure, and hedges in the portfolio.”

  15. I get so many DMs daily that I won’t be able to be bothered with them now. I’m sure I need to miss people today who genuinely want to speak, but it’s totally ridiculous now!

  16. cXboQn Thanks so much for the article post.Much thanks again. Much obliged.

  17. It is a 1930 Chrysler 77

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