The U.S. is not facing another financial crisis and the stock market's overreaction to fears about the economy could be a value opportunity, billionaire hedge fund manager John Paulson said.
But even the storied manager who profited handsomely by correctly predicting the 2007 housing crisis is feeling some frustration with the global market rout since the start of the year.
"We've modestly added to the portfolio, but the market is still falling," said Paulson, who spoke on a panel moderated by CNBC's Michelle Caruso-Cabrera at an investment conference in San Juan, Puerto Rico. "Anything you buy goes lower. It's getting near the point where there's certainly a lot of value out there."
But he expects the market will eventually recover to price in that value.
"There is a disconnect between the performance in stock market and the performance in many companies," said Paulson, who oversees more than $18 billion in assets. "Particularly (those) we've invested in our portfolio—the companies are actually doing very well, and yet stock prices are declining, so that's kind of an imbalance and eventually, that will sort itself out."
Paulson's funds have seen their performance wane over the past year, in line with industry peers.