Congrats to Paulson…BUT, You are not a Hedge Fund

Check out the whopping returns of Paulson . They did this completely hedged of course. I mean hedging yourself is how you make 650 percent returns in 10 months.

I am not making light of the genius bet and risk taking ability of Paulson or the creative way in which he made the bet, the results speak for themselves, but as Richard Dreyfuss so aptly put it when looking at the ravaged body of a ‘great white’ shark victim – “This is not a boating accident.”

Well…This is not a HEDGE Fund. It is an aggressive, niche, opportunity fund.

Kudos to my buddy James Altucher for blogging/admitting that he turned down this fund as an investment, just before the amazing run . Wow. I am obviously buying dinner next time.

3 comments

  1. James Altucher says:

    I visited them with my colleague Omid Malekan. THey presented a compelling case on why the US housing market was going to fall apart. This was about a year or so ago. THey said, “listen, we’ll probably be down 50 basis points a month but when the shit hits the fan, we’ll be up huge. Hundreds of percent.”

    When we left, Omid turned to me and said, “man, the US is screwed.”

    And I was like, “no way. This trade is too crowded. Guys like Paulson will get short squeezed and won’t be able to make any money.”

    Well, I was wrong. Live and learn.

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