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The Billionaire You Should Follow Into Stocks

Friday, 28 Aug 2009 | 5:44 PM ET

If you’re bored with trading in the wake of Warren Buffett, may we suggest another Wall Street whale for your consideration.

We’re talking billionaire investor John Paulson. Although this hedge fund giant isn’t as widely known as Warren Buffett-- and he isn’t as rich as Warren Buffett -- he is a figure pro investors watch carefully.

(In case you’re wondering Paulson ranked #78 on the 2008 Forbes list with a net worth of $4.5 billion.)

Paulson Replacing Buffett?
Discussing whether John Paulson is the new king of the seas, with the Fast Money crew.

“This is someone the mutual funds are watching. This is someonw who the hedge funds are watching," says Steve Grasso of Stuart Frankel. "This is the Warren Buffett for the next generation."

Isn't he someone you should be watching too?

His big claim to fame was predicting the implosion of mortgage markets in 2007 and the collapse of banks and other financial companies in 2008. In fact, he made a lot of money when everyone else lost their shirts.

Since then, Pualson's every move has been monitored closely by big investors with the pros always especially eager to see how he trades the banking sector.

And we see no reason why the pros should know something that you don't! Following you'll find Paulson's largest bank sector holdings, according to his latest 13F filing.

John Paulson Investments in Financials:
- 2% Stake in Citigroup*
- 168 million shares of Bank of America
- 2 million shares of Goldman Sachs
- 2 million Shares of UltraShort Financials ProShares
* Paulson’s 2% stake in Citi was reported by the NYPost

Should you follow Paulson into the sector or any of these stocks?

I would follow Paulson, says Jon Najarian.

I would too, adds Joe Terranova. And you should know he’s heavily into gold.

But you don’t know how guys like Paulson are hedging these bets, counters Guy Adami. If you’re going to follow a whale into a trade – make sure you proceed with caution.

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Trader disclosure: On Aug 28th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Jon Najarian Owns (AAPL), (BTU), (NVLS); Jon Najarian Owns (C) Calls; Grasso Owns (AAPL), (ABK), (ASTM), (BA), (BAC), (C), (COST), (CSCO), (PRST), (V), (WMT), (FAZ); Terranova Owns (AMZN), (FCX), (BTU), (SU), (WFT), (AAPL); Terranova Is Short (SHLD); Terranova Is Short (ESS); Terranova Owns (CCL) Puts

GE Is The Parent Company Of CNBC
NBC Universal Is The Parent Company Of CNBC

For Steve Grasso
Stuart Frankel And Grasso's Partners Own (CUBA)
Stuart Frankel And Grasso's Partners Own (DVN)
Stuart Frankel And Grasso's Partners Own (EOG)
Stuart Frankel And Grasso's Partners Own (GERN)
Stuart Frankel And Grasso's Partners Own (HSPO)
Stuart Frankel And Grasso's Partners Own (MSFT)
Stuart Frankel And Grasso's Partners Own (NWS.A)
Stuart Frankel And Grasso's Partners Own (NXST)
Stuart Frankel And Grasso's Partners Own (NYX)
Stuart Frankel And Grasso's Partners Own (PDE)
Stuart Frankel And Grasso's Partners Own (PRST)
Stuart Frankel And Grasso's Partners Own (RDC)
Stuart Frankel And Grasso's Partners Own (ROK)
Stuart Frankel And Grasso's Partners Own (TBT)
Stuart Frankel And Grasso's Partners Own (TLM)
Stuart Frankel And Grasso's Partners Own (XOM)
Stuart Frankel And Grasso's Partners Own (XRX)
Stuart Frankel And Grasso's Partners Own (SDS)
Stuart Frankel And Grasso's Partners Own (STWD)
Stuart Frankel And Grasso's Partners Are Short (QQQQ)
Stuart Frankel And Grasso's Partners Are Short (CL)

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.|
Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO
Virtus Diversifier PHOLIO Owns (IGE)
Virtus Diversifier PHOLIO Owns (DBC)
Virtus Diversifier PHOLIO Owns (DBV)
Virtus Investment Partners Owns More Than 1% Of (ABD)
Virtus Investment Partners Owns More Than 1% Of (CAL)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (DBC)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (SKT)
Virtus Investment Partners Owns More Than 1% Of (TNB)
Virtus Investment Partners Owns More Than 1% Of (UA)
Virtus Investment Partners Owns More Than 1% Of (CLB)

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  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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  • Guy Adami is a contributor on CNBC's "Fast Money." He also is managing director of stockMONSTER.com.

  • Najarian, the "Pit Boss," is cofounder of optionMONSTER.com, a news site for options traders.

  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

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