John Paulson holds an MBA from Harvard University and founded his investment company Paulson & Co in 1994. It was able to outperform the broad market in many years and usually achieved good results even in bad stock market years. His hedge fund grew in the crisis years 2000 to 2002 and 2008.
In 2008, John Paulson successfully crashed the American mortgage market and earned billions of dollars. He currently has assets of $ 3.5 billion as of 8/30/2021. In a recent interview he gave an assessment of Bitcoin, SPACs, gold and explained what successful investors need above all.
John Paulson: “Bitcoin has no value”
John Paulson sees cryptocurrencies in a bubble. In his opinion, it is a limited offer of something fundamentally worthless. “Bitcoin only rises sharply because its supply is artificially scarce. The rising price attracts more and more speculators who invest even more money. Cryptocurrencies have no intrinsic value, ”said the investor.
This in turn means that the rate could fall to zero euros. There have already been major drops in individual cryptocurrencies. If John Paulson’s assessment is correct, Bitcoin could also fall again.
John Paulson explains why he does not rely on falling Bitcoin prices despite his analysis. “The price is too volatile for that,” says the investor. Even if he’s right in the long run, he could lose his fortune due to the short-term fluctuations. In his bet on falling prices during the 2008 financial crisis, however, his risk was limited.
“SPACs are overrated”
John Paulson also believes the Special Purpose Acquisition Company (SPAC) market is overvalued. They are listed on the stock exchange and capitalized without a specific business purpose. They then have to acquire a company or be dissolved again within two years. However, this only works very well in phases that are rising sharply. So they are a feature of a stock market bubble.
Gold remains attractive
The fund manager continues to regard gold as a worthwhile investment. Reasons are the increasing money supply, inflation and the limited gold supply. Account balances and bonds lose value in inflation. “If this money now flees in gold, the price could rise very sharply,” explains John Paulson.
John Paulson: “Good Investors Need Experience”
John Paulson explains that it takes a lot of training to become a good investor. This applies to all investment styles. Years pass before we have learned all the pitfalls and connections. “Before we start investing, we need a lot of experience,” says the investor. He recommends dealing with the Merger & Acquisitions area at the beginning, because this is where we can learn the most about company valuation.
The John Paulson article on Bitcoin, SPACs, gold and successful investing! first appeared on The Motley Fool Germany.
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Christof Welzel owns gold ETFs. The Motley Fool owns shares of and recommends Bitcoin.
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