Paulson reduces exposure to financial holdings

By Palash R. Ghosh,

Shutterstock photo

John Paulson, who runs the giant Paulson & Co. Inc. hedge fund, has significantly reduced his stakes in key financial holdings as of the end of the third quarter, according to regulatory filings, likely as a reaction to increased regulatory scrutiny over the industry.

Paulson's reduced his stake in Bank of America ( BAC ) from 168-million shares to 138-million, and cut his exposure to Citigroup ( C ) from 507-million to 424-milion.

Paulson also lowered his stake in Wells Fargo ( WFC ) from 17.5-million shares to 15.5-million, and also reduced his stake in JPMorgan Chase ( JPM ) from 7-million shares to 5-million.
Paulson entirely eliminated his 1.1 million shares in Goldman Sachs ( GS ).

Like George Soros, Paulson has maintained a big position in gold as a hedge against weakening US dollar.
Paulson retained his 31.5-million shares of the SPDR Gold Trust ( ETF ) at the end of the third quarter (valued at more than $4-billion).

On the whole, as of Sept. 30, 2010, Paulson held 80 stocks valued at $22.9-billion. The top sectors as that date comprised financials (34.2 percent); basic materials (14.8) and health care (8.2).

The five largest individual holdings were Spider Gold Shares ( GLD ), 17.6 percent of the total portfolio; AngloGold Ashanti ( AU ), 8.28 percent; Bank of America, 7.88 percent; Citigroup, 7/24 percent; and Hartford Financial Services Group ( HIG ), 4.41 percent.

Brand new additions to the portfolio included Anadarko Petroleum Corp. ( APC ); MacAfee Inc. ( MFE ); Genzyme Corp. ( GENZ ); Liberty Media Corp. Interactive Common S ( LINTA ); Symantec Corp. ( SYMC ); Potash Corp. Of Saskatchewan Inc. ( POT ); BMC Software Inc. ( BMC ); Quad/graphics Inc. ( QUAD ); Teradata Corp ( TDC ); Netapp Inc. ( NTAP ); International Tower Hill Mines Ltd ( THM ); Quest Software Inc. ( QSFT ): Alberto-Culver Co ( ACV ); Brocade Communications Systems ( BRCD ); Beazer Homes USA Inc ( BZMD )

Aside from Goldman Sachs, Paulson also sold out Exxon-Mobil ( XOM ); Apache ( APA ); Devon Energy ( DVN ); DIRECTV Group ( DTV ); Macerich Co. ( MAC ); Sprint Nextel ( S ): Casey's General Store ( CASY ); Hyatt Hotels ( H ).

Paulson's stock picks became widely followed on Wall Street after his bet against subprime mortgages just prior to the housing market collapse.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Commodities

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