Hedge Funds - Paulson & Company

Thanks to DealBook for providing its readers with Mr Paulson's year-end shareholder letter. Mr Paulson has had a fantastic run with his various funds capitalising very nicely on his bearish views on subprime, credit and financials. The letter is definitely worth a read. It illustrates first why some hedge funds will for sure stay in business as some of the opportunities they foresee need specialists' know-how: "Distressed mortgages, distressed debt, debt restructurings, bankruptcies, strategic mergers, etc...". Their 2009 outlook may be of interest as well. "We remain bearish on the outlook for the U.S. economy and believe the recession will extend into late 2009 and likely into 2010. The sharp contraction in the global economy, the instability of the global financial system and the ongoing credit contraction are unlikely to be resolved in the first half of 2009".