“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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Comments (30)

  1. Posted by merriam webster | June 29, 2012 at 12:20 PM

    "Style drift" = "losing money"

    – Hedge fund dictionary quant

  2. Posted by translation | June 29, 2012 at 12:21 PM

    “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. Posted by Big Bob | June 29, 2012 at 12:21 PM

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

  4. Posted by Abe_Froman_ | June 29, 2012 at 12:25 PM

    Til the night closes in…

  5. Posted by Cliche Guest | June 29, 2012 at 12:26 PM

    “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. Posted by guest | June 29, 2012 at 12:32 PM

    When to pull out is a very underestimated skill!

    -A Cromartie

  7. Posted by Guest | June 29, 2012 at 12:32 PM

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

  8. Posted by The Truth | June 29, 2012 at 12:41 PM

    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. Posted by Carson Block | June 29, 2012 at 12:43 PM

    What forest?

  10. Posted by UBS MD | June 29, 2012 at 12:44 PM

    Please define "killing it?"

  11. Posted by translation | June 29, 2012 at 12:46 PM

    "…those who stay and get pounded at above-average rates over the long term."

  12. Posted by UBS | June 29, 2012 at 12:50 PM

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

  13. Posted by Guest | June 29, 2012 at 12:51 PM
  14. Posted by guest | June 29, 2012 at 12:52 PM
  15. Posted by Mid-Fund Crisis | June 29, 2012 at 1:08 PM

    -52% is the new 30.

  16. Posted by Eli Cash | June 29, 2012 at 1:09 PM

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

  17. Posted by guest | June 29, 2012 at 1:13 PM

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

  18. Posted by Broker/dealer CEO | June 29, 2012 at 2:14 PM

    Massively leveraged macro bets? Interesting…

    -Jon C.

  19. Posted by Max | June 29, 2012 at 2:23 PM

    Ohh yes, the Enron complex of the stock soaring higher and higher and then, dropping to 0.

  20. Posted by N. Roubini | June 29, 2012 at 2:29 PM

    come in and leave = in & out

    what's not to like?

  21. Posted by canadur! | June 29, 2012 at 2:30 PM

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

  22. Posted by Mike Ross | June 29, 2012 at 3:14 PM

    Sino-Forest

  23. Posted by Jeff's Killing | June 29, 2012 at 3:43 PM

    When I showed up to the festivities surrounding my being the "Nymex Man of the Year" I had a
    large entourage and a cocksure gait. Nothing but respect from the gathered admirers.

  24. Posted by Mike's Kakel | June 29, 2012 at 4:14 PM

    +1 for your name hahaha

  25. Posted by Steve Boy | June 29, 2012 at 5:53 PM

    That was congress asking him to explain 2008

  26. Posted by Ken Lay | July 2, 2012 at 3:24 AM

    +1 for your name

  27. Posted by Ken Lay | July 2, 2012 at 10:37 AM

    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 ?

  28. Posted by Gaynelle Weigman | September 9, 2012 at 1:50 AM

    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!

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    It is a 1930 Chrysler 77