John Paulson: Distressed assets best opportunity in a lifetime

| 25 February 2009 21:07

The overall stock market may be declining, but that does not mean there are no bargains to be had.  Witness this article about John Paulson, the famed hedge fund manager who made billions shorting stocks over the past years.

Distressed assets offer the best investment opportunities this year as the global recession may be deeper than consensus, billionaire investor John Paulson said.

“The decline in the market has created very good buying opportunity,” Paulson, whose New York-based hedge fund Paulson & Co. oversees about $30 billion, said in a speech at a hedge- fund seminar hosted by Societe Generale in Tokyo today. “Distressed opportunity in the U.S. is shaping up to be the best opportunity in a lifetime.”

Paulson cited the health, consumer staples and pharmaceutical industries as providing attractive investment options. He said he was taking a “neutral exposure” to equity markets.

Paulson’s flagship fund returned 37 percent last year, compared with a loss of 19 percent for hedge funds worldwide on average. His Credit Opportunities Fund soared almost sixfold in 2007 on bets that subprime mortgages would plummet.

Paulson’s funds made more than $3 billion for the firm in 2007 by judging that the U.S. housing market and subprime mortgages would collapse.

Source
Paulson Likes Distressed Assets, Says Recession May Be Deeper – Bloomberg.com

avatar About Edward Harrison

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages, a skill he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

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1 Comment

  1. avatar Stevie b. says:
    26 February 2009 at 03:18

    Ed – he’s right. Despite lousy-looking technicals, it’s now just too late and too uncomfortable being a bear – I should know – I’ve been bearish since 1997! There can’t be more than a handful of people left on the planet who don’t know how rotten things are and how even more rotten things are going to get. It’s already priced-in. There must indeed be more mileage having a bullish bias from here, gradually easing into attractive situations.”