John Paulson specializes in meltdown proof portfolios which makes a timely topic during these turbulent times.
John Paulson’s call to fame and fortune came during the last 2008 financial crisis where his bearish subprime mortgages bets ahead of the housing crash and recession made him $4 billion in profits. John Paulson’s bearish bets on subprime mortgages were one of the most profitable trades in history and it was the inspiration for the Big Short movie.
Fast forward to a little over a decade and not much has changed. If Hollywood is gearing up for its Big Short part 2 my fifty-cents worth is that the theme will be about the already in play retail apocalypse, the brick and mortar meltdown which has no doubt heated up in the wake of a global pandemic.
Think about it. How many brick and mortar stores will remain permanently shut in the post-COVID-19 era.
“John Paulson’s call to fame and fortune came during the last 2008 financial crisis where his bearish subprime mortgages bets ahead of the housing crash and recession made him $4 billion in profits”
THE WEALTH TRAINING COMPANY
John Paulson specializes in meltdown proof portfolios and his next billion-dollar windfall bet could be on a brick and mortar mortgage meltdown
In this systemic crisis, neither the Fed nor the Treasury will be able to bail out brick and mortar retailers.
Mass lay off are already filtering through with US retailer Macy’s announcing on March 30 that it would lay off “the majority” of its 123,000 employees after it had closed all its Macy’s, Bloomingdale’s and Bluemercury stores just a few weeks ago.
“We expect to bring colleagues back on a staggered basis as business resumes” said Macy in its recent announcement. But the sixty-four million dollar question is when exactly will business resume as normal, if ever?
Many retailers have been experiencing a two-decade down spiral in business which has resulted in a cluster of bankruptcies and few being stripped and sold off in pieces.
“We expect to bring colleagues back on a staggered basis as business resumes”
MACY’S
Store liquidations in 2019 have blown past the full-year total of 2018. There were 23 high profile retail bankruptcies in 2019, compared with 17 in 2018, according to tracking insights.
But that was before the brick and mortar retailers got COVIDED and it would be foolhardy to expect anything other than the worst-case scenario.
John Paulson specializes in meltdown proof portfolios and it is no surprise that gold and gold-related companies feature prominently in the billionaire’s investment portfolio
Precious metals, particularly gold has been considered since time immemorial as the ultimate haven asset. However, its performance has been capped by gold fixing from the five biggest bullion banks. Put simply, the gold market is rigged to the downside.
When gold prices threaten the fiat paper empire the players with endlessly deep pockets torpedo gold prices with sell contracts in the derivatives market, thereby pushing prices lower. Moreover, if that doesn’t work then what could come next is a kind of lock-down in the gold market where sellers are forced to accept a price for their gold at predetermined prices. The price of gold was fixed during the last Great Depression which no doubt John Paulson is aware of.
“John Paulson’s portfolio is heavily weighted towards gold and healthcare and least invested in real estate and energy” – The Wealth Training Company
If John Paulson specializes in meltdown proof portfolios then the billionaire’s current portfolio could provide investors with a heads up on how to survive the pandemic calamity
John Paulson’s portfolio is heavily weighted towards healthcare with 48.89% of the portfolio geared towards healthcare, according to gurufocus.
Healthcare stocks are a defensive sector and unlike cyclical stocks, they are less impacted by an economic downturn because they represent households’ non-discretionary spending.
John Paulson specializes in meltdown proof portfolios with communications services representing 19.77% of his portfolio’s holdings
Basic materials come in third with 15.1% of his holdings gear towards that sector.
John Paulson also has 4.41% of his holdings invested in financial services, 0.77% in consumer cyclical and 0.69% in technology.
John Paulson specializes in meltdown proof portfolios with energy and real estate being the least invested with 0.57% in the energy sector and with just 0.45% in the latter
So in short John Paulson’s portfolio is heavily weighted towards gold and healthcare and least invested in real estate and energy.
John Paulson’s largest holding is in Novagold Resources Inc, Metals and mining with 21,992,896 shares. His second-largest stock holdings are in Bausch Health Companies Inc, a drug manufacturer with 20,839,035 shares.
John Paulson also holds 16,015,108 shares in Sprint Corp, a telecommunications corporation. But SPDR Gold Trust represents John Paulson’s largest holding in terms of market capitalization.
“We’ll be helping Boeing, we’ll be helping the airlines, we’ll be doing a lot of things and the money will all come back to us, and it will come back to us in a very strong form” – US President Trump
John Paulson specializes in meltdown proof portfolios but how will his portfolio size up to a massive $2 trillion coronavirus stimulus deal for businesses
This massive 2 trillion dollar stimulus deal is set to be the largest economic stimulus package in modern American history. The US massive fiscal stimulus deal will cover everything from $1,200 government checks to individuals to hundreds of billions of dollars to fight the crisis.
Half a trillion dollars will be directly earmarked for impacted businesses.
Moreover, for airlines, there will be a special provision.
“We’ll be helping Boeing, we’ll be helping the airlines, we’ll be doing a lot of things and the money will all come back to us, and it will come back to us in a very strong form” said US President Trump.
John Paulson specializes in meltdown proof portfolios but will his bearish portfolio outperform in the era of an unprecedented fiscal stimulus package
During a period of unprecedented monetary stimulus, John Paulson’s hedge fund made steep losses in 2015 and 2016. It was only last year that John Paulson was contemplating shuttering his hedge fund to outside investors altogether.
