John Paulson still likes the banks, particularly Bank of America.
Paulson, the hedge fund manager who came to fame with a timely bet against the housing bubble, has lately been playing a recovery in bank stocks. Particularly noteworthy was a big purchase last year of Bank of America stock.
A filing Monday afternoon shows Paulson increased that bet in the first quarter by acquiring an additional 16 million shares of the giant lender.
Paulson now holds 168 million shares of the bank, valued at $3 billion, according to the filing. When he first disclosed a 159 million-share stake in BofA last fall, it was valued at $2.7 billion.
He also holds 507 million shares of Citigroup, worth $2 billion, and lesser stakes in JPMorgan Chase and Wells Fargo. The size of those stakes is unchanged from year-end.
Another unchanged stake is Paulson’s holding of Spdr gold shares, exchange-traded funds that give the holder exposure to what has been a rising gold price. Paulson had $3.4 billion worth at March 31, making gold his single most valuable position.
Paulson, who reportedly made $4 billion betting against the housing market as the bubble collapsed earlier this decade, has lately been in the news because one of those profitable trades has been flagged by regulators in a fraud case against Goldman Sachs. Paulson wasn’t accused of any wrongdoing in the Securities and Exchange Commission civil suit against Goldman, and Goldman said it did nothing wrong.
Disclosure that Paulson still likes the banks could help buck up the bank stocks, which have been hit hard in recent weeks as investors flee riskier investments for the bonds of big governments such as the United States and Germany. BofA has dropped 8% since the first quarter ended and Citi has dropped 5%.