Soros and Paulson Toe to Toe on Gold, Or Are They? (KGC, AU, GFI, GLD, IOC, HES, WFT, CVA, SU)
Two of the Street’s most prominent investors have voiced widely varying opinions on gold, but investors will be looking for their respective funds to do the talking for them.
Earlier this month we noted that John Paulson and George Soros were among the few fund managers to earn gains in both 2008 and 2009, but strikingly different views on precious metals could end one manager’s winning streak in 2010. Paulson’s gold lust is unmatched among the upper echelon of money managers, and Soros recently called the metal “the ultimate bubble” amid historic low interest rates. The winning trade is to be determined, but investors will be privy to the managers’ end-of-2009 bets when the deadline for 13F filings arrives next month.
During the third quarter, Paulson’s hedge fund had significant exposure to the precious metals market. Kinross Gold (KGC), AngloGold Ashanti (AU), Gold Fields (GFI), and a massive position in the SPDR Gold Trust ETF (GLD) were all among top U.S.-listed equity positions, and Paulson announced plans to launch his own gold fund back in November.
Meanwhile, Soros Fund Management’s top-15 U.S.-listed equity positions had an energy bias. The fund, now primarily managed by Soros’ two sons, was adding stakes in oil and gas players Interoil (IOC), Hess (HES), and Weatherford International (WFT) as well as waste to energy firm Covanta (CVA) and oil sands giant Suncor (SU).
However, Soros was hardly bearish on gold during the third quarter. He increased a previously paltry position in the SPDR Gold Trust to 2.5 million shares, making it one of the fund’s largest positions during the period, and investors will be eying that investment closely when the next batch of regulatory filings comes in next month.
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