Hedge-fund manager John Paulson has more than a few advantages over the average investor -- not the least of which is the apparent clout to approach Goldman Sachs (GS) and convince the bank to create a subprime mortgage product he could bet against at a later date.

The SEC is now investigating Goldman for its role in creating and selling that product - dubbed Abacus 2007-AC1 - while Paulson hasn't been charged with any wrongdoing. In the end, the Goldman episode may only go to further burnish Paulson's reputation as a canny investor.

How can you get in on a piece of the Paulson action? Just as many retailinvestors eagerly follow Warren Buffett's latest moves, Paulson fans can track his fund's holdings online in quarterly SEC filings, as well as filings required whenever his fund becomes a 'beneficial owner' of a particular company by purchasing more than 5% of outstanding stock.

There is a raft of caveats, however. Timing is one. Beneficial ownership reports must be filed within 10 days of a purchase, but in digging through quarterly reports to the SEC, you'll be weeks, if not months, behind. What's more, those SEC forms don't require disclosure of short positions.

Another issue: Some risk arbitrage plays can be kept confidential, further limiting the ability of individuals to realize hedge fund returns just by keeping an eye on public filings. As an individual investor, you should also be aware of how much risk is taken on by any fund you're following. 'Retail investors do not want to take the kind of risks that John Paulson takes,' says Bruce Greenwald, a professor of finance and asset management at Columbia University's School of Business.

Here's a look at some sectors where Paulson has been active in the last few years - and how an individual investor would have done, if he'd followed along. (Paulson & Co. declined to comment for this story.)

Financials

Paulson & Co. started moving into beaten-down financial stocks in the fourth quarter of 2008 and first quarter of 2009. Depending on the exact timing of the trades, the moves were potentially very profitable. The fund first reported holding JPMorgan Chase (JPM) in the first quarter of 2009; since Jan. 2, 2009, the stock has gained nearly 50%. An investor who bought into the bank at a low in early March would have seen the stock rise about 94%. Paulson & Co.'s report for the second quarter of 2009 disclosed a position in Bank of America (BAC). The stock has risen more than 180% since April 1, 2009, the first trading day of the second quarter.

In this case, an individual following Paulson's path would have done better with index investing. JPMorgan stock has risen nearly 25% since the date of Paulson & Co.'s first-quarter 2009 report to the SEC, but an investor buying into Bank of America on the date of the fund's second-quarter report would only have seen gains of about 8.6%. The S&P 500 is up 34% since the fund's first-quarter report in May and 19% since its August report.

Gold

How Midas is the Paulson touch? Recently, Paulson's bullish views on gold prompted Propel Capital Corporation to enlist Paulson & Co. as an advisor in a planned IPO for its new Propel Multi-Strategy Fund. In advertising material promoting the fund, Propel played up its exposure to the SPDR Gold Trust ETF (GLD) and touted Paulson's pro-gold position. (The IPO has been temporarily shelved, according to a Propel statement.)

Paulson & Co.'s first-quarter 2009 report disclosed a position in the SPDR gold ETF as well as AngloGold Ashanti (AU) and Gold Fields (GFI), two gold miners. Those investments have seen gains of about 30%, 44% and 39%, respectively, since Jan. 2, 2009. Again, getting in early was the key to seeing a real gold rush. An individual investor who bought into those gold plays on the date of Paulson & Co.'s first-quarter report would only have seen gains of about 22%, 5% and 3%, respectively.

Mergers

Paulson & Co. also has been active on the M&A front. One high-profile bet was on the railroad Burlington Northern (BNI). The hedge fund first reported holding shares of Burlington in the fourth quarter of 2009 - the same quarter that Berkshire Hathaway (BRK.A) announced it was acquiring the railroad. The stock rallied immediately after the merger was announced. But individual investors following Paulson & Co. wouldn't have been able to jump on the deal, since Paulson's report disclosing its investment wasn't filed until February 2010, on the same day the Berkshire deal closed.

Likewise, Paulson & Co. reported holding XTO Energy (XTO) in the fourth quarter of 2009 -- the same quarter that Exxon Mobil (XOM) revealed it was buying the oil and gas exploration company. As in the Burlington case, XTO shares jumped following the merger announcement. But since Paulson's fourth-quarter report wasn't due until February 2010, individual investors looking for insight would have been too late to the party. XTO Energy's stock is still trading; an investor who bought in mid-February 2010, after the hedge fund filed its report, would only have seen gains of about 5%.

Then there was the set of deals involving PepsiCo's (PEP) bottling companies, Pepsi Bottling Group and Pepsiamericas. PepsiCo announced it had made acquisition offers on April 20, 2009, and reached merger agreements on Aug. 4. Paulson & Co. reported its stake in an August report on the second quarter. An investor buying Pepsi Bottling Group stock at the beginning of the second quarter - before the merger announcement - would have seen gains of 66% by the end of the year. But if the investor didn't buy until after Paulson & Co. disclosed its position, he would have realized gains of less than 5% by the end of 2009.

Big Bets

Investors might see greater gains by following Paulson & Co.'s beneficialownership reports - the forms filed 10 days after the fund acquires more than a 5% stake in a company. The stock of insurance company Conseco (CNO) has risen 17% since Paulson & Co. reported acquiring 9.9% of outstanding shares on Nov. 13. Since the hedge fund reported that it had acquired 6.18% of outstanding shares of Vail Resorts (MTN) on Dec. 31, those shares have gained 19%. Also on Dec. 31, the fund announced it had become a beneficial owner of Sunstone Hotel Investors (SHO) and SunTrust Banks (STI); those shares have since risen 38% and 43%, respectively. Bottom line: All of these Paulson investments outperformed the S&P 500, which is up just under 7% since Dec. 31.

Sarah Morgan

• manager [´mænidʒə] n.经理；管理人；干事 (初中英语单词)
• apparent [ə´pærənt] a.显然的；表面上的 (初中英语单词)
• convince [kən´vins] vt.使确信；使认识错误 (初中英语单词)
• eagerly [´i:gəli] ad.渴望地，急切地 (初中英语单词)
• whenever [wen´evə] conj.&ad.无论何时 (初中英语单词)
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• finance [´fainæns] n.财政；金融 vt.资助 (初中英语单词)
• management [´mænidʒmənt] n.管理；处理；经营 (初中英语单词)
• columbia [kə´lʌmbiə] n.哥伦比亚 (初中英语单词)
• comment [´kɔment] n.&v.评论；评注；注意 (初中英语单词)
• financial [fi´nænʃəl] a.金融的，财政的 (初中英语单词)
• corporation [,kɔ:pə´reiʃən] n.社团；法人；公司 (初中英语单词)
• advertising [´ædvətaiziŋ] n.广告a.广告的 (初中英语单词)
• investment [in´vestmənt] n.投资；(时间等)投入 (初中英语单词)
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• beginning [bi´giniŋ] n.开始，开端；起源 (初中英语单词)
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• outstanding [aut´stændiŋ] a.突出的；显著的 (高中英语单词)
• profitable [´prɔfitəbəl] a.有益的；有用的 (高中英语单词)
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• exposure [ik´spəuʒə] n.暴露；曝光(时间) (高中英语单词)
• seeing [si:iŋ] see的现在分词 n.视觉 (高中英语单词)
• exploration [,eksplɔ:´reiʃən] n.探索；探险；考察 (高中英语单词)
• announcement [ə´naunsmənt] n.通告；宣布；言谈 (高中英语单词)
• episode [´episəud] n.插曲；一段情节 (英语四级单词)
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• retail [´ri:teil, ri´teil] n.&a.&v.零售(商品的) (英语四级单词)
• warren [´wɔrən] n.养兔场；大杂院 (英语四级单词)
• beneficial [,beni´fiʃəl] a.有利的，有益的 (英语四级单词)
• ownership [´əunəʃip] n.所有权；所有制 (英语四级单词)
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• temporarily [´tempərərili] ad.暂时地 (英语四级单词)
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• investor [in´vestə] n.投资者 (英语六级单词)
• burnish [´bə:niʃ] vt.磨；抛光 n.光泽 (英语六级单词)
• holding [´həuldiŋ] n.保持，固定，存储 (英语六级单词)
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• propel [prə´pel] vt.推进；推动 (英语六级单词)
• insight [´insait] n.洞悉；洞察力；见识 (英语六级单词)
• acquisition [,ækwi´ziʃən] n.获得；获得物 (英语六级单词)