John Paulson's Flagship Advantage Plus Fund Down 52% on the year

This is arguably one of the better hedge fund managers out there, certainly one of the most famous. His Advantage Plus fund is the flagship of the line of funds Paulson manages. Reuters confirms that Paulson lost another 9% in December sending the yearly loss to 52%.

Two of Paulson's worst bets, Bank of America and the infamous fraud plagued Sino Forest. As  pointed out yesterday, the average hedge fund is underperforming the S&P and is down about 4+% on the year, not a good year for Hedge Funds, but losing half of the funds under management for Paulson, has to be a killer for the Hedge fund industry.

As I have speculated, GLD/gold may be suffering for this very reason, one of Paulson's (formerly) better performing funds was his gold fund in which Paulson was the largest holder of GLD with 20 million shares. With redemptions coming in as very few investors are willing to pay the kind of fees Paulson charges for loosing half of their money, it is very likely that Paulson had to turn to his gold fund and sell, sell, sell to meet redemptions. This is why I question whether GLD is in a bubble top or an intermediate top.

Still Paulson likely earned about $600 million in management fees at 2% of AUM.

I guess even smart money isn't always so smart.