Paulson Gets Copper from Gold

Chidem Kurdas

John Paulson ended up with copper shares from his investment in NovaGold. He’s kept the gold, but now he also holds a substantial stake in NovaCopper, the new spinoff from NovaGold. Paulson & Co. funds own 12.9% of NovaCopper as well as 12.9% of NovaGold.

NovaCopper was spun off at the end of April with copper deposits in Alaska.  NovaGold shareholders received one share of the copper company for every six shares of Novagold.

NovaGold is only one of the various investments that constitute Paulson & Co.’s large position in gold, a position that includes a gold exchange-traded fund and has grown even as gold lost some of its luster.

Gold ETFs and gold producers are typically seen as protection against inflation and a safe haven if markets crash. Copper is a different story, an industrial metal that tends to correlate with economic growth. Recent fears engendered by the European crisis have depressed the price of copper.

Thus copper is not the new gold, despite the temptation to sound clever by saying so. Mr. Paulson would have a somewhat different reason for holding the copper shares than for holding gold.


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One Response to “Paulson Gets Copper from Gold”

  1. Copper the New Gold for Paulson? « HedgeFundSmarts Says:

    […] promising copper finds in Alaska, with some gold also found in the same ground. The company is a spinoff from NovaGold.   Widely held by hedge funds as a gold play, NovaGold is a long-time Paulson & Co. […]

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