2014 US Open Celebrity Sightings - Day 2
John Paulson Photograph by Uri Schanker — GC Images

Why This Billionaire Investor Thinks the Stock Market Is ‘Overreacting’

Updated: Feb 12, 2016 1:14 PM UTC

Billionaire hedge fund investor John Paulson , closely followed for his views on the markets, said on Thursday the sliding stock market is "overreacting" and that the United States economy remains strong.

The S&P 500 is down 9.4% year to date on concerns about depressed oil prices, China's economy and weakness in U.S. company earnings.

"There's a disconnect between the performance of the stock market and the performance of many companies we've invested in," Paulson said at a conference in San Juan. "The companies are doing very well but the stock prices are decreasing. In time that will sort itself out, but I think the market is sort of overreacting."

Paulson , whose funds have $16.2 billion of assets under management, also said he was not concerned about the U.S. facing a new financial crisis, saying banks have "more liquidity and higher quality portfolios."

"The U.S. is on pretty solid ground," Paulson said. "The concerns would be more from China."

Paulson , a long-time bull on gold, said he still has a gold fund and significant investments in the gold sector, and said that the fund was "doing very well."

Spot gold prices soared on Thursday to one-year highs as global economic uncertainty, a weaker dollar and tumbling equities revived bullion's safe-haven status.