Billionaire Paulson says he's staying the course on gold

BOSTON Thu Apr 25, 2013 1:08am IST

President and Portfolio Manager of Paulson & Co. John Paulson speaks during the Sohn Investment Conference in New York, May 16, 2012. REUTERS/Eduardo Munoz/Files

President and Portfolio Manager of Paulson & Co. John Paulson speaks during the Sohn Investment Conference in New York, May 16, 2012.

Credit: Reuters/Eduardo Munoz/Files

Related Topics

Stocks

   
Coal Mining In The Punjab

Coal Mining In The Punjab

In Choa Saidan Shah miners dig coal with crude pick axes and load it onto donkeys to be transported to the surface earning a team of 4 workers around $10 to be split between them.  Slideshow 

BOSTON (Reuters) - Billionaire investor John Paulson told investors on Wednesday he is staying the course on gold even though there may be more short-term volatility in the price of the metal.

The New York-based hedge fund manager has long stuck by his thesis that gold will someday be a powerful hedge against inflation, and it was no different on the investor call he held, two people who listened to the call said.

John Reade, a partner at Paulson & Co, said that the firm, which oversees about $18 billion, is not veering off its course even as he cautioned that there could be more price fluctuations in the short term.

A spokesman for Paulson did not immediately return a call seeking comment.

Paulson held the firm's regularly scheduled quarterly call to speak in more detail about the first quarter, when the bulk of his funds delivered positive returns. That marked an improvement from 2012 and 2011, when his best-known portfolios, the Advantage Funds, chalked up double-digit losses each year, with the Advantage Plus fund losing more than 50 percent in 2011.

Paulson had released his quarterly letter to investors, which included results, three weeks ago. On Wednesday, clients had a chance to ask questions.

Since the end of the first quarter, gold prices have dropped dramatically, raising concerns about Paulson's performance and how he might react to it. However, recent demand for physical gold has been seen as a steadying force and the price has recovered some.

Paulson's small gold-oriented fund, which was already down 28 percent in the first quarter, lost more money recently. But Paulson said the bulk of assets belong to Paulson himself, which makes any sort of investor run on the fund highly unlikely.

Paulson's Recovery Fund delivered some of the best returns in the industry, with a 14 percent return during the first quarter. Also, news on mergers has recently been positive for the firm.

The investor became one of the most closely watched fund managers after he earned billions in 2007 by betting against the overheated housing market.

(Reporting by Svea Herbst-Bayliss; Editing by Dan Grebler)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

WTO Row

WTO Row

U.S. raises stalled WTO talks with India, no sign of breakthrough  Full Article 

Pharma Sector

Pharma Sector

FDA raises concern over drug production process at Cadila  Full Article 

Fed Policy

Fed Policy

Fed presses forward with bond buying, cites uptick in inflation.  Full Article 

Q2 Profit Slips

Q2 Profit Slips

Samsung sees tough second half  Full Article 

Chinese Economy

Chinese Economy

China should set lower 2015 GDP growth target of 6.5-7 percent - IMF  Full Article 

Tracking Monsoon

Tracking Monsoon

Monsoon rains turn below average in past week  Full Article 

Joint Bid

Joint Bid

ONGC, Oil India bid $1.5 bln for stake in Murphy Oil's Malaysia assets - sources  Full Article 

Economy Reboots

Economy Reboots

U.S. economy back on track with strong second-quarter rebound  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage