Paulson's golden investors have to commit $10 million

[UpInArms]

Source: Reuters

BOSTON (Reuters) - Investors tempted to put money into star hedge fund manager John Paulson's new gold portfolio will have to commit at least $10 million and leave the money locked up for at least one year, according to a prospectus.

In return, Paulson & Co, one of the world's biggest and most successful hedge fund firms, says it can deliver returns that top gold prices, at a time analysts are betting that rising demand will make the metal even pricier.

Since founding his New York-based firm in 1994, Paulson has concentrated mostly on merger deals and the credit market. A bet that housing prices could fall on a national level famously earned him roughly $3 billion in 2007.

Now, Paulson is making a concentrated bet on miners and other bullion-related investments because central banks are buying gold and he expects prices to keep rising as demand outpaces supply.

Gold prices reached an all-time high of $1152.85 an ounce this week.

Paulson has hired two gold industry experts: Victor Flores, HSBC's former senior gold mining analyst, and John Reade, a former senior metals strategist at UBS. Reade had originally planned to join Credit Suisse.

Read more: http://www.reuters.com/article/businessNews/idUSTRE5AJ4PS20091120?feedType=RSS&feedName=businessNews&sp=true

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there's no relation to hanky-panky paulson with this -

but ...

anyone got a spare $10 Million that they won't be needing for at least a year?

I checked and all of my $1 dollar bills were already committed.

:argh:

[jsmandrake]

1. GOLDMAN'S CHUMP CHANGE

BIG DEAL!
Where are the T's?? (as in: trillions) As if we would fall for this schtick! They are professional criminals. When we were children we played as children.....WE ARE OLDER THAN THAT NOW

[Lucky Luciano]

5. This is John Paulson - not Hank Paulson

Totally different guy and far richer than Hank. This guy knocked it out of the park when he got massively short subprime mortgages a couple years ago and earned $3.7B for himself. HE is now a god among hedge fund managers.

[DFW]

2. Put in ten million, and have it untouchable for a year while this guy plays with it?

Even if I did have that kind of money, I don't have the nerves of titanium steel necessary to trust ANYone to play
with it for a year and then give it back, much less expecting a healthy gain tacked on.

Since I don't have ten million, however, I am, by definition, freed from having such concerns to keep me awake nights.......

[KoKo]

3. I wonder what Paulson is covering for. Can't be he's going to dump all

this into gold. Weird...

[DFW]

11. Short term, he could have success

On a global scale, if you want to put $20 billion into physical gold, you'll drive the price through the roof.
That would be something like 540 metric tons even at the $1150 ounce price, and China and India could pay that
in dollars out of their currency reserves' petty cash box.

The thing is, when the party is over, if you want to dump that much physical gold back into a marketplace that
is no longer in heat to have it, you might drop the price faster than it went up. An interesting game, if you
have the skill, the opportunity and the nerves, I guess.

[Lucky Luciano]

4. The guy has a brilliant track record. Investors will be climbing over each other to invest with him

Note this is totally different from Hank Paulson, the former Treasury Secretary.

[wordpix]

8. I dunno, it reminds me of famous scam artists like Madoff, Alan Stanford

Gimme your $10 million and you'll get rich with gold at the height of the gold market. Just like you'll get rich with real estate at the height of that market.

[DFW]

12. If you get out in time with your investment intact, bravo

Fine if it's discretionary cash, scary if you were counting it for your retirement nest egg, and it goes sour.

[northzax]

9. As any hedge fund manager will tell you

Sober if he's honest, drunk if he's not: do not invest anything into a hedge fund you aren't able to lose. No hedge fund worth it's salt takes investments under $500k, most start at 1-2 million. With personal assets above and beyond that. You are quite literally paying someone else to gamble with your money. They may be very good (most are) there's still that chance. They don't want you to need this money, then you'll pay attention to what they're doing. Look at Paulson's success: he basically bet the house of his last fund that the subprime bubble would burst in a four month window of 2008 a year in advance. If it had held off for a few more months, he would have busted, and lost his clients hundreds of millions, maybe a few billion. Instead, he was right and made them $15 billion (and by extension, $3.7b for his own firm) think of it. In 2007 he probably made 10-15 million. In 2007 he made almost four billion.

[DFW]

10. Ummm....

I'm having a little trouble reconciling your last two sentences.

Not that I'll ever have make ten million in a year myself. I'll never have that much at all,
so this is just a spectator sport for me.

[northzax]

13. Neither will I

It's a spectator sport like watching movie stars get married and divorced, I'll never be one of those either!

And I meant 2008 in the last sentence, btb.

[DFW]

14. That does help a bit, thanks!

[alcibiades_mystery]

15. We're talking about people for whom $10 million isn't a lot of money

[benld74]

6. This sounds like a good deal Chauncey, Let me get my checkbook

[wordpix]

7. sorry, UpInArms, my $10 MM is already invested in gold mines - I love tearing up mountains

for a speck of gold :mad: :grr: