How to Invest Like Legendary Investor John Paulson

June 10, 2011

I’ve taken a look at Paulson & Co’s past four 13F filings, and following are some observations on general trends in the fund’s investments.

First, the market value of all publicly traded common equity in the fund increased from $21,219,293,000 at June 30th, 2010, to $32,499,270,000 at March 31st, 2011. This is an increase of $11,279,977,000, or 53.1%. I will be doing a series of posts that look at this data, but first I want to give some idea of the overall nature of Paulson & Co.’s public equity investments over time.

The largest position in all four quarters was in SPDR Gold Trust (NYSE:GLD). Paulson & Co. held $3.8 billion in Q2 10, $4.029 billion in Q3 10, 4.369 billion in Q4 10, and $4.4 billion in Q1 11.
The smallest position varied across quarters. In Q2 10, its smallest position was in Hyatt Hotels (NYSE:H), worth $11.127 million. Paulson & Co. disposed of this holding sometime before Q3 10. In Q3 10, its smallest position was Brocade Communications (NASDAQ:BRCD), worth $16.936 million. In Q4 10, its smallest holding was in Chemtura Corp (NYSE:CHMT), worth $2.744 million. Finally, Chemtura was also its smallest holding in Q1 11, worth $3.123 million.
The median holding across quarters bounced around a bit: $113,131,000 at 6/30/10, $87,251,000 at 9/30/10, $118,400,000 at 12/31/10, and $11,860,000 at 3/31/11.
Interestingly, the average holding across quarters stayed fairly consistent, moving in a range of $315,361,879 (9/30/10) to $365,160,337 (3/31/11).
The difference between the median and mean values, of course, implies that the distribution of positions in Paulson’s fund is very heavily weighted toward larger positions in certain equities. Indeed, in each of the four quarters, the fund’s holding of SPDR Gold Trust (NYSE:GLD) accounted for more than 10% of the total fund value.