John Paulson Eying a Gold Price Spike
John Paulson, the hedge fund manager who made himself famous last year with his large bet against the subprime market, is now making another bet that doesn't bode well for a quick economic recovery.
Paulson & Co.paid $1.3 billion for a stake in AngloGold Ashanti, a South African gold miner. Paulson's subprime bets returned in excess of 100% in some cases. If gold were to rise an equivalent amount, it would likely be a sign of severe economic distress.
Of course, Paulson may be like many hedge fund managers: lucky enough to hit pay-dirt once, but not good enough to do it again and again. Time will tell, but if you want to place your eggs in the same basket with a guy who pretty much nailed the first half of the crisis I can't blame you.