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Two Ways: Paulson & Co. Strikes Gold in South Africa


Strengthen your portfolio in good times and bad.

John Paulson's fund, Paulson & Co., has taken an 11.3% stake in AngloGold Ashanti (AA). According to Bloomberg, Paulson paid $32 a share for the South African miner; the total investment is valued at approximately $1.28 billion.

In a statement, Paulson said AngloGold Ashanti "is one of the best managed and undervalued of the major global gold-mining companies… We look forward to the implementation of their global expansion strategy."

Paulson's transactions now makes him the second largest shareholder in the company. His other gold-related investments include a 4.1% stake in Kinross Gold Corp (KGC).

In 2007, his Credit Opportunities Fund soared nearly sixfold after betting correctly that the subprime mortgage market would plunge. Last year, it still returned 37%, compared with an average loss of 19% for the entire hedge-fund industry.

See Professor Lance Lewis' Gold Bulls No Bugs At All.

From the Bull Pen: The play here is the gold miners' ETF (GDX). Bulls can set a starter position here with a sell stop below $29.50.

From the Bear Cave: If the dollar is indeed ready to crack, look to the bearish dollar ETF (UDN). A sell stop can be set below $24.
Position in GDX

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