John Paulson seems to be zigging when others are zagging. He is making bet on energy as prices have fallen and is sticking with gold.
Energy prices were nearly cut in half for 2014, and even the most savvy value investors restrained the urge to bottom fish in the sector. However, some are buying on weakness, including Paulson, who bought a stake in Talisman Energy valued at $549.1 million, according to Marketwatch. He trimmed his stake in some other energy plays, as well as MGM, Sprint, Verizon and Family Dollar. He increased his holding in International Tower Hill Mines. Paulson’s fund lost 35% last year, and his energy holdings were partly to blame for the decline.
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Paulson, who is famous for shorting the housing market before others realized there was trouble afoot, is still the largest holder of SPDR Gold Trust, the leading ETF for the yellow metal. His stake is currently 10.23 million shares, although the ETF lost 2014. Assets in the ET went to 704.83, the lowest since 2008. Global demand for gold slipped to a five year low of 3, 923.7 tons, according to Bloomberg.
John Paulson has emphasized that buying a house is probably one of the best investments, and that seems to make sense with mortgage rates relatively low. In addition, he might have a better 2015 than a 2014 with healthcare holdings. The 9 healthcare stocks in his special situations fund have been performing well.
