John Paulson, the hedge fund superstar, has taken his lumps so far this year.

Just recently, he was prodded to sell his entire stake in Sino-Forest, after a short seller-oriented Hong Kong-based research firm named Muddy Waters issued a report calling the Chinese company a fraud, which tanked the stock. Paulson's funds lost $500 million. That loss came on top of previous losses earlier this year. His big bets on banks, for example, have not turned out well, and his flagship funds--his Advantage and leveraged Advantage Plus fund--were down about 20 percent as of mid-June.

But as the Financial Times notes, he has not yet been hit by redemptions. Insiders account for 42 percent of funds, which certainly helps keep redemptions at bay. In addition, he has certainly earned the benefit of the doubt from external investors, as he has generated outside returns consistently. He's had only one losing year since 1994. That was 1998 when he posted a 4 percent loss mainly due to merger arbitrage bets. We've noted before that last year, his two main funds were mired in losses at mid-year, before staging massive rallies to end the year in the black.

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