AU Paulsons 2nd largest holding...$30- 24 since article
Anglogold, Novagold, Randgold: Why Billionaire John Paulson Loves Gold
By Marshall Hargrave in Hedge Funds
Published: December 10, 2012 at 1:24 pm
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PAULSON & COBillionaire John Paulson founded Paulson & Co. in 1994 and has become famous for his bets against subprime mortgages. Paulson’s strategy focuses on macro-themed investments rather than picking individual stocks. Paulson’s big themes in the past have been betting against banks during the financial crisis, and then betting on them during their recovery. Paulson’s most recent bet has been on gold, where in 2010 he made upwards of $5 billion by investing in the commodity. Given the economic uncertainty and loose monetary policy in the U.S., Paulson’s overwhelming theme continues to be long gold. Paulson’s top 3Q position – making up almost 30% of his 13F – is still the SPDR Gold Trust (see all of John Paulson’s newest picks).
The gold industry has been in a bull market for close to ten years as rates have been in a steady slide. As interest rates are now at rock bottom lows, and expected to remain that way through 2015 per the Fed, the question becomes: how much higher can gold prices go? In the current low-rate environment, we place gold as a safe-haven investment as investors look for stability and inflation protection. We believe that Paulson’s top five gold picks will see strong sales and growth as a result of increasing demand for gold. Also bolstering a continued upward trend for gold prices will be continued uncertainty in international markets, such as Europe, where the threat of defaults make gold an even more attractive safe haven.
Anglogold Ashanti Limited (NYSE:AU) is Paulson’s 2nd largest 13F holding and largest stock holding. At 11x earnings, Anglogold would appear to be a solid buy with its historical P/E being north of 13x. Billionaire investor - and founder of Renaissance Technologies - Jim Simons is one of the top fund owners of Anglogold (see Jim Simons' top