Paulson's funds having another crapper year - in spite of the froth in stocks . Clients heading to the exits starting with Citigroup private bank ( and how many of their clients are sending redemption notices for the endIn 2010 he reportedly earned $5bn in one year - $4bn from investing in his own funds and $1bn in pay. It was the largest amount ever earned by an individual in a single year. His motto, “If you watch the downside, the upside will take care of itself”, was often quoted. But in recent years he seems to have ignored his own advice and has made most of his losses by betting on a strong global recovery. High-profile losses started last year, for example Paulson took a heavy hit on his investment in a Chinese company, Sino-Forest. Citi declined to comment. A spokesperson for Paulson did not return calls. of September as well ?

http://www.zerohedge.com/news/beginning-end-john-paulson

The Beginning Of The End For John Paulson?

Submitted by Tyler Durden on 08/23/2012 12:23 -0400

• Apple
 
• Bear Stearns
 
• John Paulson
 
• Las Vegas
 
• Real estate

Because redemption requests are like cockroaches: once one appears, assume many, many more:

• CITIGROUP'S PRIVATE BANK SAID TO PULL $500M FROM PAULSON FUNDS - BBG
• CITIGROUP SAID TO REDEEM FROM PAULSON ADVANTAGE, ADVANTAGE PLUS - BBG

Is this the beginning of the end for the former Bear Stearns M&A banker and once infallible hedge fund manager? And to think he could have saved himself all the deep fundamental work telling him Las Vegas real estate is "cheap" and just bought Apple. Hey, everyone else is doing it. And everyone else can't possibly be wrong. As for Paulson, whose GLD holdings, which are not an investment but merely a gold denomination share class, will likely quite soon see a substantial hit as he is forced to unwind GLD holdings as more and more external investors redeem until finally JP is just left running his own and his employees' money.

Finally, recall what we said three days ago when we broke the Goldman report that only 11% of HFs are outperforming the S&P: "the day of redemption reckoning at the end of the year (and just after September 30 for that matter as well) could be the most painful yet. it also explains why, just like every other quarter in which career risk is at all time highs, HFs are dumping everything not nailed down and buying up AAPL, which as of June 30 was held by an all time high 230 hedge funds (more on that later)."

For Paulson D-Day may have arrived. It is also coming for hundreds of other underperforming funds who will now have to shift from net buyer to gross liquidator as their LPs demand their cash back ahead of the September 30 redemption deadline. Add that technical consideration to all the other September sell off woes.

In short - he who redeems first, redeems best.

and...





http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9497500/Citi-pulls-funds-from-5bn-man-John-Paulson.html

By Louise Armitstead, Chief Business Correspondent

3:02PM BST 24 Aug 2012

10 Comments

Citigroup Private Bank is set to withdraw $410m from Paulson & Co amid heavy losses at the New York-based hedge fund group.

The redemption, which Citi reportedly informed its clients about yesterday, will further erode the total asset base at Paulson & Co which has reportedly shrunk to $19.5bn from $36bn last year.

The private bank, which invests around $2bn in 60 hedge funds on behalf of high-networth clients, is said to have put Paulson on its “watch list”after the group sustained heavy losses last year.

One of Mr Paulson’s best known funds, the Advantage Plus fund, fell around 52pc last year - and another 18pc last month. His Advantage fund was down 36pc last year and 13pc last month. US equity markets rose more than 7pc in July.

Mr Paulson, who became a billionaire by correctly betting that sub-prime mortgages would collapse, is thought to have made $3.7bn in 2007.

and from the recent  Paulson & Company 13 F filing....

John Paulson Dumped A Ton Of JPMorgan Shares In Q2 And Exited A Bunch Of Other Positions

Julia La Roche | Aug. 14, 2012, 5:35 PM | 2,559 | 1

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Legendary hedge fund manager John Paulson, who famously bet against the subprime housing market in 2007, just filed Paulson & Co.'s 13-F form with the SEC. 

For the second quarter ended June 30, 2012, the closely-followed hedge fund manager massively decreased his stake in JPMorgan Chase, according to the filing.

Paulson & Co. owned 4,000,000 shares of JPMorgan in Q2 compared with 18,463,500 shares in Q1, the quarterly report shows.  

During Q2, the hedge fund exited its positions in Anadarko, Family Dollar, Newscorp, Sara Lee and Teva, the filing shows. 

Read more: http://www.businessinsider.com/john-paulson-13f-2012-8#ixzz24Vb5Sh7S

and John now has a huge bet on the gold ETF - good luck with that one ! ....

http://seekingalpha.com/article/827291-john-paulson-lucky-or-great

By Scott Rubin

The hedge fund world can be a rough place, even if you are a billionaire.

How tough are the markets? Well, the story of John Paulson shows just how fickle they can be, even for the top investors in the world. Prior to the sub-prime mortgage collapse, Paulson was a respected, albeit little known hedge fund manager plying his trade out of his Manhattan offices.

Paulson was a Harvard MBA and one of the top finance students during his undergrad days at NYU, but he wasn't a hedge fund superstar. That all changed when he made the bet of a lifetime against sub-prime mortgages. His trades were gutsy, to say the least. They hit big, and earned his hedge fund roughly $15 billion alone in 2007. The fund made another $5 billion in 2008 betting against banks and other financial firms.

Paulson, who was a wealthy man with a net worth of around $100 million prior to the housing collapse, suddenly rocketed into the upper tier of the Forbes 400 -- an entirely different stratosphere of wealth. Many hailed John Paulson as a genius and among the greatest investors of our time, right up there with George Soros and Warren Buffett.

While Paulson's bet may well have been "the greatest trade ever," as many describe it, the markets rarely let anyone ride a perpetual hot streak. Even Buffett, Soros and Paul Tudor Jones lose gobs of money from time to time. Heading into 2011, Paulson was about to learn this the hard way.

Last year, his fund was decimated as big bets on banks (long positions this time) turned sour, causing his largest funds to hemorrhage money -- roughly a 40% haircut. Billions gone.

His massive bet on a strong recovery in financials was just as gutsy as his subprime shorts, but the trade didn't pan out. So, it goes in themarkets it seems. Right now, Paulson is riding another ridiculous trade, which he has been building up for years. Nearly 44% of his fund is currently invested in gold and gold mining stocks. Readers can see exactly what he is holding here.

While he obviously hasn't lost his bravado and appetite for risk, Paulson has been knocked down a notch or two as a result of his terrible 2011 performance. On Thursday, Bloomberg reported that Citigroup's (C) private banking arm is yanking around $500 million in capital invested at Paulson & Co.

Bloomberg also said that, "Citigroup's private bank in May advised clients not to add money to the Paulson funds, a person familiar with the matter said at the time." This is typical. Money pours in when the manager is doing phenomenal, then it comes out when he stumbles.

While Paulson may be down, he isn't out just yet.

The question remains: is John Paulson just lucky, or is he great?

If you are a hedge fund investor and don't mind dropping a few million (or more) in paper money every once in awhile, stick with Paulson. He has proven he has the guts and conviction to bring in windfalls for his investors, even if Mr. Market has taught him a lesson or two in recent years.