john paulson

REUTERS/Chip East

Closely-followed hedge fund manager John Paulson made a rare appearance to give the keynote lunchtime address at the CNBC/Institutional Investor conference. 

 

This is Paulson's first TV appearance.  He rarely does interviews.

Back in 2007, Paulson famously bet against the subprime housing crisis and became a household name. It was called the greatest trade ever.

His performance in the last two years though has been criticized, particularly the gold funds. 

"We think we're back into our long term achievement returns right now," Paulson said.

Paulson said when the Fed got into QE1 he became concerned.  Now we have QE2 and 3.  He was looking for a currency alternative to protect against inflation.

"Although the Fed has printed a lot of money to date there is very little inflation," he said, noting that has caused the price to fall in the current environment. He referred to it as a "pause period." 

He added that the rationale for owning gold has not gone away.

"We're at risk for having very high rates of inflation because of the amount of money that has been printed." 

Carl Quintanilla asked him about the housing market. 

"We thought we were at a peak in 2006.  Now we believe the housing market has bottomed so we wanted to go long real estate opportunities," he said adding it's not too late to get involved. 

Paulson said buying a home is the "best investment" an individual can make.

He believes the housing recovery has another 4 to 7 years to go.

He has been getting involved in this in a number of ways, particularly setting up a special real estate fund.

Carl Quintanilla asked him how an individual can play this trade?

Paulson said buy a home and if you can buy a second home.

Quintanilla asked him why he didn't just retire after making all that money.  Paulson said he wants to do this for another 20 years.