John Paulson Clarifies: He Has Not Really Lost Money on GoldVW Staff
SALT 2013 has kicked off, and besides for the VIP dinners with the elite, there is also some investment news. John Paulson sat down for a one on one conversation. Paulson started off with a discussion on gold, a commodity which ‘lost him' 27% in the month of April. Below are some informal notes from the talk with John Paulson.
John Paulson: 5 interesting points
1. Gold only constitutes 2.8% of John Paulson's total AUM, so the press has overstated his recent losses with use of absolute numbers and not his total real holdings.
2. In reality he have not lost anything on gold. He initially bought for $950 for his main gold fund, and today still a lot higher than that.
3. Making money in the investments world its really difficult. The key is for a manager to be consistent long term and to control volatility. He started his fund with only $2 million and now have grow that to more than $12 billion; he have accomplished that with 12% to 14% average returns since he started Paulson & Co. In the last 2 recessions he have controlled volatility (in 2002 dot com bubble, and 2007 financial crisis) and not lost money during those two recessions unlike most hedge funds.
4. His advice for investors is to stick with a fund manager long term. Short term investing is not for him and it doesn't make any sense because real growth and value of financial assets are based on compound not on short term thinking.
5. He decided to start his career with Bear Stearns and not Goldman Sachs, because he wanted to focus his career on advising wealthy entrepreneurs, and Bear Stearns was better than Goldman on this. Goldman Sachs was more M&A for fortune 500.
We also have some notes on the conversation between Leon Panetta, former Defense Secretary, and former PM of Israel, Ehud Barak