Paulson and Co. Inc. Recently Closed "Many" Short Positions According to Recent Conference Call
According to Marketwatch.com (link below), John Paulson of Paulson & Co. Inc. has turned very bullish on the US economy, equities markets and even the US real estate market.
John Paulson recently held a conference call with investors in which he addressed the SEC/Goldman Sachs situation and discussed his thoughts on the future direction of $32 billion hedge fund firm.
Paulson & Co. Inc., as you are likely aware, made billions upon billions of dollars by betting against the subprime mortgage market. Through the use of credit default swaps, Paulson's company racked up massive gains in 2007 as the subprime mortgage market fell apart, instantly catapulting Paulson into the limelight and making him a household name almost overnight.
In his recent conference call with the investors in his various funds, Paulson revealed that he has turned very bullish on the US economy, US equities and even the US real estate market.
According to Marketwatch.com, Paulson believes that a "V-shaped recovery" is more likely now than a double-dip recession. Paulson also revealed that he believes that home prices have stabilized and "could climb 8-10% nationwide in 2011".
Paulson also revealed that his worries about a double-dip recession and a "possible default by a Southern European nation" have started to dissipate, and he believes that either of these events occurring now is unlikely.
Paulson's bullish views, according to the article, have translated into a more "long"-focused portfolio. According to the article, Paulson closed "many of its short positions recently", and this translated into stronger gains for the company in April compared to Q1 (when Paulson was still worried about a double-dip recession or a credit event in Europe).
Many people believe that Paulson's suddenly bullish outlook may have something to do with him trying to deflect some of the negative attention that his company has received over the past week due to the SEC vs Goldman Sachs/Fabrice Tourre civil lawsuit. Many people are skeptical of his suddenly bullish outlook on the US economy and real estate market..
One thing is for sure - if Paulson had revealed his bullish views two weeks ago instead of last week, his words would have carried much more weight. However, since his outlook was revealed so soon after the SEC lawsuit, many people are questioning the motives behind his suddenly cheery outlook.
Source: Marketwatch.com - Paulson & Co. Turns Bullish on Housing, Economy
Filed under: Hedge Fund News