I am not really much of a contrarian. You cant be when you are a trend follower and whilst I take mild amusement from magazine covers trumpeting that housing is the best investment in the universe in 2007 only to see housing end up in the toilet. It is not a strategy I find compelling in its rigor. However, I may have found an exception to the rule – John Paulson the billionaire hedge fund manager who to date has gotten one bet right. Every other bet he has made on the market has been a disaster, his flagship fund has lost a total of 58% on crap bets on an economic turnaround and now on gold.
His latest bet is on gold using the SPDR Gold ETF (GLD)
It doesn’t take a rocket scientist to see that its not doing very well. This is the interesting thing about billionaires – most of them are appalling market timers and even worse traders. As such it amazes me how many people followed Gina Reinhardt and James Packer into Ten Network in 2010.
Interestingly, this probed to be the short term high for the stocks which has lost around 85% since then.
So I might just extend my rule – if a billionaire invests in then it is probably time to think about shorting it.