John Paulson’s Looking Towards Real Estate

I suspect that you can either make a great deal of money following the lead of recently successful investors or lose a lot of money by doing so. For those of you who subscribe to the first part of that sentence, you might want to take notice of the recent investments undertaken by John Paulson.

For any not familiar with Mr. Paulson and his hedge fund Paulson & Co., he is the fellow who recognized the mortgage emperor wore no clothes and so shorted mortgages big time. The rest is history, he made billions.

Now he appears to be accumulating commercial real estate assets. His most recent play is to pop $100 million into CB Richard Ellis, a very large but also very troubled commercial real estate firm. He also happens to be in the money raising stage of a new fund that is set up to pursue commercial mortgage opportunities.

Paulson doesn’t appear to be buying yet so much as he seems to be positioning himself to snap up deals. Paulson has also been buying gold by accumulating miners. So gold and real estate assets, what kind of outlook for the future would that imply? If you guessed inflation, go to the head of the class.

Like I said, Paulson may either lead you to the Promised Land or bust your portfolio if you go all in with him. Might not be bad as a hedge, though.

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