John Paulson’s year is about to get worse. Paulson, a superstar hedge fund manager, has endured some of the biggest losses of his career this year. Paulson’s main fund, Adavntage Plus was down 47% through the end of November while his Advantage fund was down almost 32% and his Credit Opportunities Fund 18.02%. In comparison, the average hedge fund was down just 4.4% through the end of November and the market at large was down just 0.19%.
Through all this, Paulson’s one bright spot was gold. Businessweek reports that Paulson’s top-performing fund through November was his dedicated Gold Fund. It rose 11% through the first 11 montsh of the year. Paulson also offers gold-dominated versions of his hedge funds. Now, with gold posied to reach a five-month low, Paulson’s saving grace could be gone.
Gold Plunges to 5 Month Low
“Gold’s plunge to a five-month low sent it below its 200-day moving average for the first time in almost three years, signaling more declines to traders who follow technical analysis,” writes Businessweek. “Bullion fell below $1,600 an ounce yesterday to settle at the lowest level in five months as a stronger dollar curbed demand for the metal as an alternative asset.” Prior to the decline, gold was up roughly 12% and heading for its 11th consecutive annual gain, outperforming other commodities, equities and Treasuries.
Paulson’s Gold Positions
“Paulson & Co. held shares of SPDR Gold Trust (GLD) and eight gold companies in the third quarter, according to its 13F filing,” reports Businessweek. “The firm, which uses the ETF to denominate the gold share classes of his funds, pared its stake in the gold trust to 20.3 million shares from 31.5 million as of June 30.” Paulson also owned large stakes in Gold Fields (GFI), Novagold Resources Inc (NG), Randgold Resources Ltd (GOLD), Agnico Eagle Mines Ltd (AEM), Iamgold Corp (IAG), Barrick Gold Corp (ABX) and International Tower Hill Mines (THM).