In what was termed as a stunning revelation, legendary investor George Soros is returning to trading. After a decade-long hiatus, Soros was lured back by the profit opportunities that he sees coming as a result of the future economic problems. During the last time that Soros was involved in trading, i.e. 2007, he was worried about housing and continued to place a series of bearish wagers. These bets brought in over $1 billion of gains.
As Greg Zuckerman from WSJ notes, Soros Fund Management which manages over thirty billion for Mr. Soros and his family has sold stocks and then bought gold and shares of gold miners in anticipation of weakness that is bound to happen in various markets. Gold is viewed as a safe haven during times of turmoil.
This move was not expected from the 85-year old who gained fame in 1992 by placing a bet against the British pound and earned over 1 billion in profits. This is because he has been focused on philanthropy and public policy in the recent times.
Soros has always maintained a close eye on his firm’s investments though he has continued to delegate more and more as he got older. That has however changed as Mr. Soros has been noted spending more time in the office and personally directing trades. WSJ claims that Mr. George Soros is stepping in to fill a void in the firm left by Scott Bessent, who was his top investor. Soros himself has invested a total of $2 billion in Mr. Bessent firm. Soros tapped Mr. Burdick as his chief investment officer though his specialty is in distressed debt rather than Soros specialty of macro investment. This may be the reason Soros felt compelled to step back in.
Mr. Soros has created a more bearish outlook than many which he attributes to economic and political issues in China and Europe. He is also skeptical about the Chinese market which to him is slowing down. He noted that the fallout from the unwinding of Chinese investments would most likely have far reaching implications. Soros also argues that there is a good chance that the European Union will collapse as a result of the immigration crisis and the continued challenges in Greece and also the possible exit from EU by the United Kingdom.
In the US, Soros has adopted a bearish derivative position which serve as wagers against US stocks. However, Mr. Soros could be facing loses in regards to some of those bets as the S&P 500 has climbed since then.
The return of George Soros has been termed as strategic bearing in mind that the last time he placed bets of the same nature, he was right about what would happen. And an even more bearish Soros is back again.
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