“Due to the uncertainty over Sino-Forest’s public disclosures and financial statements, we have sold our stock and await the results of the independent committee’s investigation,” Paulson and Co said today. Read more »
Uncertainty Over Greece Weighs on Financial Markets (NYT)
Financial markets remained jittery Thursday amid concerns about the stability of the government in Athens, uncertainty over the fate of a second Greek bailout and suggestions by Ireland that it would require investors to pay for part of the bailout of its indebted financial institutions.
Paulson Funds Struggle as Big Bets Backfire; Gold Works (WSJ)
Mr. Paulson’s $9 billion Advantage Plus fund lost more than 13% in the early part of this month, through June 10, leaving it down 19.65% for the year, according to two investors briefed on the performance. The Enhanced Partners fund, which had been a big winner this year, lost nearly 7% in the first 10 days of June, and now is up less than 4% in 2011, according to the investors.
Referrals on SAC Disclosed (WSJ)
The SEC has received 65 referrals of suspicious trading at hedge-fund firm SAC Capital Advisors LP over the last decade, or 46 more than previously disclosed, according to Sen. Charles Grassley…Sen. Grassley, the top Republican on the Senate Judiciary Committee, said “many” of the referrals involved trades older than the five-year legal time limit on bringing civil actions for insider trading. The older trades “would not appear to trigger any concerns regarding ongoing investigations,” he said in a letter to SEC Chairman Mary Schapiro on Wednesday. SAC said it was “not surprised” that it has been the subject of 65 referrals since 2000. “Referrals by Finra are the result of surveillance of market-wide trading activity and they are neither findings nor allegations of insider trading,” a spokesman for SAC said in a statement. “Given the size of our firm, our active investment style, and the period covered, we are not surprised by the number of referrals. SAC has always cooperated fully with regulators and will continue to do so,” the spokesman said.
Falcone’s Venture Runs Into Static (WSJ)
The most recent evidence of complications surfaced this week in disclosures tied to a report expected to detail potential interference problems with the network…The report is expected to warn federal regulators that recent tests showed LightSquared’s network can knock out global positioning system, or GPS, receivers, according to people familiar with the report.
Och-Ziff May Profit From Market Turbulence (Bloomberg)
Daniel Och’s hedge-fund group bought options on almost $12 billion of U.S. stocks during the first quarter, a move that may generate profits if markets turn more volatile this year.
Wall Street Mind Meld: Obama Struggles? (Morning Money)
M.M. spoke with several senior Wall Street executives about recent efforts by the Obama campaign to reignite the financial industry support that generated a huge money edge over John McCain in 2008…One executive said he did not believe next week’s $38K per head event at Daniel had sold out, though another said that may have changed in the last few days.
Europe Faces ‘Lehman Moment’ As Greece Unravels (Bloomberg)
“The probability of a eurozone Lehman moment is increasing,” said Neil Mackinnon, an economist at VTB Capital in London and a former U.K. Treasury official. “The markets have moved from simply pricing in a high probability of a Greek debt default to looking at a scenario of it becoming disorderly and of contagion spreading to other economies like Portugal, like Ireland, and maybe Spain, Italy and Belgium.” Read more »
John Paulson’s annual midyear investor event, held on June 7-8 in Paris, featured notable speakers, workshops on the firm’s major strategies and a dinner cruise on the Seine. Unlike the firm’s recent soiree in Las Vegas, which was held solely for investors in his advantage funds, this event was open to anyone invested in the $37.5 billion firm. [AR]
MW’s Carson Block: It’s a Ponzi scheme in that the company perpetually issues securities in order to fund itself. Even by its own fraudulent numbers, the company does not generate any free cash and has not done so in sixteen years. Were the company be unable to issue additional securities to fund itself, it would collapse. That to me is the definition or epitomizes the definition of a Ponzi. “In this situation, the company appears to be investing for the 23rd century. It’s sixteen straight years burning cash, no guidance as to what the rationale is to acquire so many trees so far ahead of customer orders. This is taking a capex fraud–we have found several of these in China–it’s taking it to the next level where you’re not constrained by the walls of a factory and no one is able to really see the movement of physical goods. It could grow to be infinite provided that the capital markets continue to fund it.” Read more »
Reuters reports John Paulson’s Advantage Fund was down 1.24 percent for the quarter (-3.10 in March); the Advantage Plus Fund was down 1.74 percent (4.4 percent in March); and the Gold fund was down ‘a smidgen,’ losing 0.87 percent (-0.43 in March). Paulson Partners was up 3.86 percent for the quarter; Paulson Enhanced was up 6.94 percent; and the Credit Opportunities Fund was up 6.44 percent.
If you’re an insecure Paulson and Co investor, you’ve probably spent at least several hours if not days or weeks at a time wondering how John felt about you. Would he like you as much if you weren’t a paying client? Does he prefer older investors? Does he play favorites with the gold fund? Well wonder no longer. His feelings have been made clear by this year’s investor conferences. All but one strategy have already had their events in Manhattan. Nice, but not the same as spending a whole weekend with him that potentially includes waking up with Mike Tyson’s tiger in your hotel suite after marrying a stripper named Jade. That opportunity goes to investors in Paulson Advantage, the flagship fund, which will have its meeting in Vegas next week. Read more »
10. Paul Tudor Jones (Tudor Investment Corp): 440 million
9. George Soros (Soros Fund Management): 450 million
8. Bruce Kovner (Caxton Associates): 640 million
7. Carl Icahn (Icahn Management): 900 million
6. Eddie Lampert (ESL Investments): 1.1 billion
5. Steve Cohen (SAC Capital): 1.3 billion
4. David Tepper: 2.2 billion
3. Jim Simons (Renaissance Technologies): 2.5 billion
2. Ray Dalio (Bridgewater Associates): 3.1 billion
1. John Paulson (Paulson and Co): 4.9 billion
Best Paid Hedge Fund Managers [AR Magazine]
Remember John Paulson’s big trade a few years ago? This subprime business something or other? It ended up pretty well for him, netting a bunch of billions and the respect of his peers but at the time, most people who JP told about it it had a good laugh at his expense and thought to themselves, “who is this fuckin’ guy,” Paulson recounts. Read more »
Shout out to the Doctor in John Paulson’s year-end letter to investors. Read more »
In a piece today on John Paulson’s 2010 performance, the Journal notes that while it was pretty good, the hedge fund manager shouldn’t exactly be doing any victory dances in the end zone. Sure, 30+ percent returns, when you’re managing more than $30 billion, are “very rare” in the business. But, they’re just saying, JoPau probably shouldn’t be doing any bragging and may in fact want to think about where he went wrong, considering in 2007 he returned 590 percent. They don’t want to be critical! They’re merely pointing out: no one’s written a book about Paulson’s 2010 trades. Perhaps feeling a bit bad, or as though they’d gone too far, they do charitably note that the $5 billion Paulson earned is a lot more than some people. Read more »