Paulson: U.S. on 'Solid Ground', Stock Market 'Overreacting'

Feb 11 2016 | 11:57pm ET

Billionaire hedge fund manager John Paulson believes the U.S. economy is on pretty solid ground and that plummeting global stock markets are overreacting. 

Paulson made the comments at an investment conference in Puerto Rico, in which he has several investments and where he continues to consider relocating due to the beleaguered commonwealth’s attractive tax incentives.

Puerto Rico is saddled with $70 billion of debt and is trying to negotiate a restructuring plan with its creditors. It has already defaulted on some of its outstanding debt.

"There’s a disconnect between the performance of the stock market and the performance of many companies we’ve invested in," Paulson said at the conference. "The companies are doing very well, but the stock prices are decreasing. In time that will sort itself out, but I think the market is sort of overreacting."

Paulson added that he was not not concerned about the U.S. facing a new financial crisis, since the country’s banks have "more liquidity and higher quality portfolios."  Instead, "The concerns would be more from China." 

Paulson, long bullish on gold, also said he still had significant investments in the gold sector and a gold fund, which he said was doing very well in light of the soaring spot price. Gold hit the highest level in more than a year as investors fled plunging stock markets. 

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