Friday, 25 July 2014
Last updated 1 hour ago
Sep 19 2011 | 4:41am ET
John Paulson’s hedge funds are down—way down—but his confidence couldn’t be higher.
Even as Paulson & Co.’s performance has plummeted this summer, its founder continues to tell investors that he remains bullish. “Price-earnings ratios are at historic lows,” he told The Wall Street Journal, defending a strategy that has his largest hedge fund down 33% this year. “This has created many buying opportunities where companies are trading at extremely low valuations irrespective of strong performance.”
Paulson admitted that he was “too overconfident” about the prospects for the U.S. economy—this year. At a meeting with a group of clients last month, a month that cost his Advantage Plus fund 15%, Paulson sought to assure his customers that “the problems in the U.S. can be solved,” and that the stocks, many of them financial, that he owns will bounce back over the next 12 months, give or take.
“Many investors make the mistake of buying high and selling low, while the exact opposite is the right strategy,” Paulson, who has become accustomed to double- and triple-digit returns, told the Journal.
“Banks are trading at massive discounts,” Paulson told an investor this summer, the Journal reports. “They will rebound.”
And, he hopes, his own fortunes will rebound with them.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…