A Billion-Dollar Misunderstanding (in Gold) – On Retirement (usnews.com)
By Daniel Solin
April 25, 2013 RSS Feed Print
There are small misunderstandings, like the one chronicled by Robert Grover in his cult book, “One Hundred Dollar Misunderstanding”. Then there are really big ones.
The miscalculation by hedge fund gurus John Paulson and David Einhorn relating to the price of gold falls into the latter category. According to an article in Forbes, Paulson had a paper loss of around $1.4 billion on his gold investment this year, although he still has a gain since he created the gold share class for his hedge fund in 2009 when gold was selling at $950 an ounce.
David Einhorn, who runs hedge funds (including a dedicated gold fund) at Greenlight Capital Management, also bet heavily on gold. According to Reuters, Einhorn’s investment in gold was recently listed as its third largest position in its main fund.