market folly

Dealbook has the latest investor letter from John Paulson's hedge fund firm Paulson & Co. In their third quarter 2009 letter, they give us an inside look at some of their portfolio holdings as well as a performance update on their hedge funds.

Unfortunately, the tools for the document have been disabled so you have to view it via the embedded version below (we recommend using the 'full screen' option). RSS & Email readers: you have to come to the site to read the Paulson letter.



As per the letter, Paulson executed many arbitrage and event driven plays given their background in that strategy. In particular, they reference the Wyeth/Pfizer deal which we've noted as a play that was ripe with hedge funds. Interestingly enough, Paulson & Co also had been playing arbitrage with Pepsi (PEP) and Pepsi Bottling Group (PBG). We highly recommend reading the letter above. And if you're looking for more material out of John Paulson's hedge fund, check out their 2008 annual investor letter as well.

Just two days ago, we took an in-depth look at Paulson's new offering, a gold fund. This is his latest wager and we'll have to see if he can win big twice in a row. In terms of other recent portfolio moves, we saw John Paulson beef up his stake in Cadbury (CBY), as well as file a 13D on Conseco (CNO). Stay tuned later this morning as we'll be doing our quarterly 13F analysis on Paulson & Co and will update all of their long equity portfolio holdings.