Thursday, 23 October 2014
Last updated 15 hours 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.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...