Paulson & Co. founder John Paulson is the single most successful hedge fund investor to capitalize off of the 2007 U.S. mortgage crisis and subsequent recession, rising to the ranks of Warren Buffet and George Soros in just a few years' time.
By shorting subprime securities, he first became a billionaire, with Paulson & Co. earning $3.5 billion in 2007. In 2010, he bested himself by personally earning $5 billion (an entirely new record)‚ about $1 billion was in compensation, and about $4 billion was from investing his own money into Paulson & Co. The 2010 gains were from shorting troubled European banks, investments in Citigroup, and significant holdings in gold.
Paulson is now the "Bear Market Billionaire," and his outlook has not changed. Paulson & Co.'s assets of $36 billion is over a third invested in gold -- Paulson has publicly predicted double-digit U.S. inflation in 2012 and a target price for gold between $2,400 and $4,000 (it's currently trading around $1,500 an ounce).
Paulson & Co. uses merger arbitrage, long/short, and event-driven strategies, employing fundamental analysis with the S&P500 as its benchmark.
For a closer look at Paulson & Co., we used the company's 13f fillings with the Securities and Exchange Commission (SEC) to find the fund's five largest holdings and their five biggest holding increases as of March 31, 2011. (Click here to access free, interactive tools to analyze these ideas.)
5 Largest Holdings:
1. SPDR Gold Shares
2. AngloGold Ashanti
5. Anadarko Petroleum
5 Largest Holding Increases:
2. International Paper Co.
3. XL Group
4. Transocean: Oil & Gas Drilling & Exploration Industry. Market cap of $20.86B. Between 12/31/10 and 3/31/11, Paulson & Co. increased its share holdings by 239.83% (from 7.20M shares to 24.47M shares, with a portfolio weight of 5.82%).
5. Barrick Gold
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Eben Esterhuizen does not own any of the shares mentioned above.
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