John Paulson Likes Gold…More Than a Friend

John Paulson of Paulson & Co, the legendary hedge fund manager who made tens of billions betting on the mortgage crisis between 2007 to 2009, likes gold.  He really likes it.  He likes gold more than a friend.

To most market participants, this is not news, but here’s something you probably didn’t know:  Paulson owns more gold than several major countries!  Combined!

Here’s how we get that 110 tonne abstract to represent his gold position:

Based on several analyses of his filings, Paulson’s wagering roughly 15% of his \$30 billion hedge fund in the precious metal (\$4.3 billion).  His investment is spread out between ETFs, physical bullion and shares of gold mining stocks, but for the purpose of this discussion, we’re going to look at them in the aggregate as representational of a bet on gold (which they are).

I am using the “tonne” as my unit of measurement because that is how the World Gold Council measures a nation’s gold reserves.  A tonne is a metric ton, it equals 1000 kilograms.

Assuming Paulson & Co currently owns \$4.3 billion worth of gold and using the recent price of \$1100 per ounce of gold,  we come up with a total of 3.9 million ounces:

\$4,300,000,000 / 1100 oz = 3 909 090.91 ounces

Paulson’s 3.9 million ounces million ounces add up to 110 metric tonnes (35,273 ounces in a tonne):

3.9 million ounces divided by 35,273 oz per tonne = 110 tonnes

As can be seen in the chart above, Paulson holds more gold than many nations with individual populations in the millions and economies in the hundreds of billions.  His reasoning for being so bullish is that there are roughly \$200 trillion investable assets (in dollars) in the world, but only \$800 billion of that wealth is in gold.

Whether or not the world is truly under-invested in gold is up to you to decide, but Paulson’s bet is a big one by any measure.

Sources:

Reserve Asset Statistics (World Gold Council)

Paulson & Co 13 F Filings (SEC.Gov)

Investing Fads By Year 1996-Present  (TRB)

Full Disclosure:  This is a forecast-free website, the author draws no conclusions here about any of the publicly-available data being referenced nor does he endorse any particular investment or strategy.  Nothing on this site should EVER be construed as research, advice or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

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1. Top Posts « WordPress.com commented on Nov 25

[…] John Paulson Likes Gold…More Than a Friend John Paulson of Paulson & Co, the legendary hedge fund manager who made tens of billions betting on the mortgage crisis […] […]

2. Justin Zuweig commented on Nov 30

Why did you mention Brazil ? This country is a joke. Remember, late Gen. De Gaule use to say “Brazil is not a serious country”.

If not sufficient, its President is a drunkard and a lier. May be that is why Mr. Obama greeted him saying: “this is my man”. Oh boy!

3. Justin Zuweig commented on Nov 30

Why did you mention Brazil ? This country is a joke. Remember, late Gen. De Gaule use to say “Brazil is not a serious country”.

If not sufficient, its President is a drunkard and a lier. May be that is why Mr. Obama greeted him saying: “this is my man”. Oh boy!

4. Justin Zuweig commented on Nov 30

Why did you mention Brazil ? This country is a joke. Remember, late Gen. De Gaule use to say “Brazil is not a serious country”.

If not sufficient, its President is a drunkard and a liar. May be that is why Mr. Obama greeted him saying: “this is my man”. Oh boy!

5. Justin Zuweig commented on Nov 30

Why did you mention Brazil ? This country is a joke. Remember, late Gen. De Gaule use to say “Brazil is not a serious country”.

If not sufficient, its President is a drunkard and a liar. May be that is why Mr. Obama greeted him saying: “this is my man”. Oh boy!

6. Dean commented on Nov 30

I worked for a mutual fund that managed Gold Bullion and mining stocks. .

Did you know that: All the Gold in the world today would fit into two Olympic-sized swimming pools.

Own Gold because, it it no one’s obligation.
Also, over the past 30+ years there has been a close relationship/ratio between Gold and Oil.

Typically it takes 10-12 barrels of oil to an ounce of Gold. (it suggests at today’s levels that Oil is too low or Gold is too high. I’d bet that oil is too low. We’ll see that soon)

7. Dean commented on Nov 30

I worked for a mutual fund that managed Gold Bullion and mining stocks. .

Did you know that: All the Gold in the world today would fit into two Olympic-sized swimming pools.

Own Gold because, it it no one’s obligation.
Also, over the past 30+ years there has been a close relationship/ratio between Gold and Oil.

Typically it takes 10-12 barrels of oil to an ounce of Gold. (it suggests at today’s levels that Oil is too low or Gold is too high. I’d bet that oil is too low. We’ll see that soon)

8. Bitcoin Loophole Review commented on Sep 21