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Paulson Says Bets Were Too Aggressive


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Paulson conceded that his research analysts were hearing rumblings about problems at Sino Forest for months and that his trading desk received requests to borrow the stock to short it. Indeed Paulson was trimming the position when the Muddy Waters research report alleging account problems hit.


Hmm, that sounds like coincidence and nothing to do with shopping the research before shorting.


To reposition the portfolio, Paulson said he diversified into financial companies with less exposure to mortgage loans, noting that he liked Capital One (NYSE:COF - News) and Wells Fargo (NYSE:WFC - News), two names he owned at the end of the first quarter.


Wells Fargo and low mortgage exposure does not compute.


Until the mortgage crisis, Paulson was known for making consistent and intelligent investments with an emphasis on event specific bets. Perhaps the type of money that flowed into his funds after '08 were hoping for more Sosa and less Ichiro?

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