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Markets sniff out weakness, and the relentless selling in financials may be no more than...

Markets sniff out weakness, and the relentless selling in financials may be no more than frontrunning John Paulson, whose Advantage Plus fund is reportedly off 47% through September's end. Redemptions - perhaps massive ones - are a possibility, meaning Paulson will have to unload financial shares, and others, he has been so fond of. One could do worse than picking a bottom in the XLF on the day he is forced to give up on the sector.
Comments (12)
  • The last sentence doesn't make sense.
    8 Oct 2011, 08:53 PM Reply Like
  • Ok, the bottom is after he sells - SA editor just clarified it for me. English isn't my native tongue. Sorry.
    8 Oct 2011, 09:06 PM Reply Like
  • Why don't you just say: "once he is done liquidating, other investors should buy XLF."?
    8 Oct 2011, 09:34 PM Reply Like
  • Hmmm, looks like Paulson can't really time the market so well after all, unless he gets to actually pick and design the fraudulent security and then bet against it for a guaranteed win.
    8 Oct 2011, 09:36 PM Reply Like
  • Paulson's a perfect example of a capitalist, eh?
    8 Oct 2011, 11:04 PM Reply Like
  • How do you know, within a reasonable time, when a major hedge fund has initiated liquidating financials? 3 weeks later when they make an announcement?
    8 Oct 2011, 09:50 PM Reply Like
  • Can someone explain why he would be liquidating the sector now? I understand he might have to liquidate some when clients leave, but why that sector? He mainly already lost the money there and it probably will go up from where it is now. I am just not that optimistic on the Sino Forest bet - that is lost and probably has cost a lot.
    8 Oct 2011, 11:25 PM Reply Like
  • There will be a time to buy. I don't understand why there must necessarily be the snapback, 'V- bottom' though. These things may languish at low PE's as earnings diminish (i.e. GS), for a long time. Crappy dividends and al (as they contract). That is most painful for all. Mr. Market may want it that way. Welcome feedback.
    8 Oct 2011, 11:52 PM Reply Like
  • Who cares? Rich people give him their money to invest, and he's not doing very well this year. They lose money and take whats left and either invest it themselves or give it to the next "hot" guy.


    Now if reporting requirements were more "real time" then it might mean something that he will be forced to liquidate, but three weeks is an eternity in these markets (if your trading).
    9 Oct 2011, 12:43 AM Reply Like
  • The market is a lot bigger than John Paulson, as his latest performance shows. It won't be any different if he has to sell. Following the pied pipers around is a game for fools.
    9 Oct 2011, 04:56 AM Reply Like
  • He holds a lot more than financials in his portfolio. Hopefully, he doesn't unload only those if it comes to it.
    9 Oct 2011, 09:26 AM Reply Like
  • Maybe..."His guess, is as good as mine" and that's all it is.
    23 Oct 2011, 03:23 PM Reply Like
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