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

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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]


John Paulson Ditches Banks, Drums Up Some Business For Them

I think everyone who's ever worked at an investment bank saw at least a little something of themselves in the Journal's fat asshole article this morning. My own feelings are mixed since, for me, investment banking was a lifestyle improvement over a previous job that left me partially paralyzed from overwork (true story! I got better). So in a sense I don't have that much to complain about, but I did, and do, constantly and loudly and now on the internet. Part of what sucks about banking - that I think the Journal article missed - is the frequent pointlessness of your activity: you get on a plane, go see a guy, tell him about this awesome merger or financing or whatever you've got planned for him, shake hands, and fly away never to see him again. And by "never" I mean "not until six months later, after he's printed a deal away from you, when you go and do the same thing, but this time maybe you don't shave." You'd probably still be a fat, stressed, overworked cabbie-puncher if most of your ideas actually got executed, but you'd perhaps be less suffused with metaphysical dread. That's how I'd feel anyway. Then, I blog now. Anyway, a thing that I don't know anything about, and never ever want to know anything about, so don't tell me, is the proper price-to-book trading multiples of life vs. P&C insurance companies and whether there's a conglomerate discount for being in both businesses. So with that as a disclaimer I found this pretty damn convincing: