John Paulson Clarifies: He Has Not Really Lost Money on Gold

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SALT 2013 has kicked off, and besides for the VIP dinners with the elite, there is also some investment news. John Paulson sat down for a one on one conversation. Paulson started off with a discussion on gold, a commodity which ‘lost him’ 27% in the month of April. Below are some informal notes from the talk with John Paulson.

John Paulson Clarifies: He Has Not Really Lost Money on Gold

John Paulson: 5 interesting points

1. Gold only constitutes 2.8% of John Paulson’s total AUM, so the press has overstated his recent losses with use of absolute numbers and not his total real holdings.

2. In reality he have not lost anything on gold. He initially bought for $950 for his main gold fund, and today still a lot higher than that.

3. Making money in the investments world its really difficult. The key is for a manager to be consistent long term and to control volatility. He started his fund with only $2 million and now have grow that to more than $12 billion; he have accomplished that with 12% to 14% average returns since he started Paulson & Co. In the last 2 recessions he have controlled volatility (in 2002  dot com bubble, and 2007 financial crisis) and not lost money during those two recessions unlike most hedge funds.

4. His advice for investors is to stick with a fund manager long term. Short term investing is not for him and it doesn’t make any sense because real growth and value of financial assets are based on compound not on short term thinking.

5. He decided to start his career with Bear Stearns and not Goldman Sachs, because he wanted to focus his career on advising wealthy entrepreneurs, and Bear Stearns was better than Goldman on this. Goldman Sachs was more M&A for fortune 500.

We also have some notes on the conversation between Leon Panetta, former Defense Secretary, and former PM of Israel, Ehud Barak

1. The next Pearl Harbor will be definitely a cyber war.
2. The NSA, National Security Agency is at the cutting edge of cyber defense and cyber OFFENSE. NSA can make major damage to enemies  if it wanted to.
3. He told China to stop the cyber espionage and the stealing of USA IP. He was very direct with the Chinese about this.
4. Syrian president Bashar Al-Assad will go down, they will guarantee that!
5. The biggest problem the US faces right  now is its crazy hyper partisan politicians…

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