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Hedge Fund News: John Paulson, David Einhorn, Apple Inc. (AAPL)

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Editor’s Note: Related Tickers: Apple Inc. (NASDAQ:AAPL), The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), Citigroup Inc. (NYSE:C), Trinity Industries, Inc. (NYSE:TRN), American Railcar Industries, Inc. (NASDAQ:ARII)

Hedge fund chief Paulson loses big on gold (Reuters)
PAULSON & COHedge fund billionaire John Paulson is emerging as one of the biggest losers in this year’s gold rout, further tarnishing his once legendary status in the $2 trillion hedge fund industry. Paulson’s $700 million gold fund lost a whopping 27 percent in April, when the price of the metal plunged 17 percent over a two-week stretch, according to performance figures provided by a person familiar with the fund. The jarring one-month decline in the Paulson gold fund brings the year-to-date loss for the fund to about 47 percent, the source said. The fund’s losses were magnified by the fact that its bullish bet on gold is effectively a leveraged bet that uses derivatives tied to the price of gold to enhance returns.

Einhorn adds to Apple stake, awaits ‘blockbuster product’ (Economic Times)
David Einhorn’s Greenlight Capital has added to its investment position in Apple Inc. (NASDAQ:AAPL) and is waiting for the company’s “next blockbuster product,” Einhorn said on Tuesday. In a conference call for his Cayman Islands-based reinsurer Greenlight Capital Re Ltd, Einhorn did not specify when the hedge fund added to its Apple position or the size of its current holdings. At the end of 2012, the $8.8 billion Greenlight Capital held 1.3 million Apple shares, according to a regulatory filing. At the market close on Monday, the shares were worth about $600 million.

Tips from Wall St hedge fund gurus fail to reward faithful (Financial Times)
Advice from the gurus of Wall Street may be rather less valuable than their fans would like to believe. Investors who bought on the basis of top tips from one of New York’s most celebrated hedge fund conferences last year spectacularly failed to beat the market. The Ira Sohn Investment conference held at New York’s Lincoln Center brings together the leading lights of the hedge fund community to share market insights as a way of raising money for cancer research. But a Financial Times analysis of last year’s tips shows decidedly mixed results. Many of the ideas have proved woefully miscued, including some from the most high-profile managers who will return to the stage on Wednesday: David Einhorn of Greenlight Capital and Bill Ackman of Pershing Square.

Nat Rothschild Rues ‘Terrible Mistake’ in Deal Gone Sour (Bloomberg)
Nat Rothschild recalls the fateful day in October 2010 when, as he scanned the globe for business opportunities, he first heard the word Bumi, Bloomberg Markets will report in its June issue. Ian Hannam, a well-known JPMorgan Chase & Co. (NYSE:JPM) investment banker, had e-mailed Rothschild suggesting he look at two coal companies, including PT Bumi Resources (BUMI), linked to the Bakrie family, a powerful Indonesian business dynasty. “He said it was the best deal he had ever seen in his life,” Rothschild says. Hannam’s approach was the first step down a path that would lead to an ugly boardroom brawl pitting Rothschild against the Bakries. As it unfolded, the clash would see the two sides trading claims of e-mail hacking, bad faith and fraud. It would leave few reputations, including Rothschild’s, unscathed.

Hedge fund trial to raise pressure on UK fraud prosecutor (Reuters)
Britain’s top fraud prosecutor is likely to face serious criticism over its handling of an investigation into the $600 million collapse of one of London’s oldest hedge funds, a judge said on Tuesday. Already smarting from a 300 million pound ($466 million) damages claim after a botched investigation into the Tchenguiz property moguls, the office is under pressure from politicians who say it has not done enough to bring bankers and other financial industry figures to book since the 2008 crisis. Judge Alistair McCreath set a provisional date for the criminal trial of Magnus Peterson, the founder of Weavering Capital, for October 2014 and a provisional date for an abuse of process hearing for November 8.

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