[ by Melanie Gretchen ]

Hedge fund manager John Paulson is making his way among the worst, after the 2010 book "The Greatest Trade Ever" featured the billionaire's success in his bets against housing.  This year, HSBC ranked one of Mr. Paulson's hedge funds, Advantage Plus, the second worst performer of 2012 among the universe of funds, after the fund's performance as the worst last year.

Where the founder of Paulson & Co. is experiencing problems:

• Advantage Plus, which uses additional leverage than his other funds, is down 19% through the end of October, following a 53% loss last year
• Paulson & Co.'s other flagship fund, the Paulson Advantage Fund, is down 13% this year, putting it among the top 10 losing funds in the HSBC universe this year as well

What happened. Mr. Paulson's bet on a Euro collapse and subsequent positions in gold and makers of the hard asset have not paid off.  Factors not working in the hedge funds' favor include:

• the Euro lives on
• South Africa's AngloGold Ashanti hit a 52-week low last week

The continued presence of the Euro may not be a bad thing, considering he predicted a collapse "could throw the world into recession and serious financial disorder" in the outlook section of his 2011 year-end letter.  Adding insult to injury, however, is the success of the BTG Pactual Distressed Mortgage Fund.  The fund, HSBC's best-performing hedge fund, recovered amid the kind of residential mortgage securities that Paulson bet against during the crisis.

Misery Loves Company. On the other hand, he is not alone in underperformance.  Hedge funds are up 2% in 2012, according to the Hedge Fund Composite Index from Bank of America.  At the other end of the spectrum is Daniel Loeb, whose Third Point Ultra Fund increased 25% as of last week, as Yahoo shares rose.

For further details, go to [CNBC, 12/3/12].