John Paulson, whose hedge fund is the single biggest owner of the SPDR Gold Trust (GLD),...


John Paulson, whose hedge fund is the single biggest owner of the SPDR Gold Trust (GLD), maintained a 21.8M-share position even as the value of its holdings fell ~$165M in the latest quarter. But all that remains of his Barrick Gold (ABX) holdings is 36K call options vs. 915K shares at the end of 2012. Other positions in miners AU, NG, AEM, IAG and ANV were unchanged or modestly changed.
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Comments (7)
  • sikkabooyah
    , contributor
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    If they live long enough, Paulson and his followers will probably emerge whole. The only question is what constitutes "long enough".

     

    I remember when gold hit $850/oz around 1980 and then backed off - way off - during the succeeding ca. 25 years. But if you hung in there, you doubled your money when gold took off in the 21st century - - if only you lived long enough!

     

    So, an investment in gold doubled in 25 years? Actually not much of a return when annualized; kind of like a poor man's bank account without the FDIC insurance.

     

    All of which is faintly reminiscent of the performance of investments in MSFT and INTC during a similar time period. But that's another story.
    15 May 2013, 07:19 PM Reply Like
  • evan.prospect
    , contributor
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    What was the purchasing power of the dollar and what was the size of the Fed's balance sheet in 1988 compared to 2013? QE4 will likely continue for awhile, at least at or above $70 billion/month as well.
    16 May 2013, 12:06 AM Reply Like
  • TBRADY
    , contributor
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    Please correct me if I am reading this incorrectly, but doesn't 36k call options equal ownership rights to 3,600,000 shares which would far exceed the 915k shares held at the end of 2012?
    15 May 2013, 08:44 PM Reply Like
  • Yesid
    , contributor
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    36K is equal to 36,000
    16 May 2013, 12:25 AM Reply Like
  • helotours
    , contributor
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    Each contract is for 100 shares.
    16 May 2013, 12:25 AM Reply Like
  • DocBest
    , contributor
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    Right! And 36K = 36000 call options = 36,000 times 100 shares per option = 3,600,000 stock options according to elementary math, which begat the T Brady question previously presented. Perhaps the poster actually meant 36 call options, but that is doubtful by what has been written, which seems quite clear. Assuming the posting is correct, it appears that Mr. Paulson has gone from holding 915,000 shares outright to holding call options on 3.6 million shares, which obviously does not reflect a change in Mr. Paulson's attitude that gold is going to retreat further, but quite the opposite. He has reduced his cost, increased his leverage, and accepted a greater risk. What would be more interesting is to know the term on the call options, as they could be super options fully one year out or very short term. My guess is they are at least 2014 calls, but who knows?
    16 May 2013, 01:16 PM Reply Like
  • compostn@rogers.com
    , contributor
    Comments (5) | Send Message
     
    I recall a Hedge fund owner telling me in the 1990's, " ... he hated being opposite Fidelity on a stock because Fidelity was the biggest "trader" in the marketplace and therefore had the "most/best" information...
    This comment reminds me of that statement since everyone is and will be wrong on any given day and therefore stock pick.
    16 May 2013, 12:52 AM Reply Like
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