According to a recent article in the Wall Street Journal, George Soros is trading again, or at least making strategic re-allocations to his portfolio of investment assets that clearly betray a bearish bias.
Soros stopped actively trading nearly 10 years ago, letting Soros Fund Management handle his personal portfolio of around $30 billion dollars. However, he still keeps a close eye on his money, according to insiders, the Wall Street Journal learned.
His top trader, Scott Bessent, left the firm to found his own hedge fund. Therefore, this year George Soros has spent more time in the office making trades. He hopes to profit enormously from the potential global financial crisis coming in the near future.
In speeches and interviews given earlier in 2016, Soros has revealed his pessimistic outlook on both China and Europe. He calls China’s situation similar to that of the United States going into the 2008 financial crisis. The country is experiencing the flight of capital, and is spending rather than accumulating foreign currencies. Also, the political leadership suffers from internal conflict that could hamper its ability to deal with economic problems. He is concerned China’s political milieu may prevent the kind of permanent reforms he believes that country needs to remain prosperous. And he makes it clear that an economic collapse in China would have negative implications for the rest of the world.
Soros also sees the European Union facing three crisis: the possible British exit, Greek government debt and the tremendous numbers of immigrants. They could cause the collapse of the EU.
The recent moves George Soros made include selling stocks, and buying gold and the stock shares of gold companies such as Barrick Gold and Silver Wheaton. These moves indicates Soros expects stock prices to fall and the price of gold to rise, which will also make companies that mine gold more profitable. He has also bought puts on the S&P 500, which means he will profit if the U.S. large cap stock index goes down in the future.
According to Zero Hedge, the last time Soros took this much interest in trading was 2007, when he became concerned about home mortgages. The bearish trades he made then netted him a billion dollars in profits over the next two years.
After graduating from the London School of Economics, in 1973 Soros founded his first hedge fund, which became the Quantum Fund. He made many successful trades, becoming quite wealthy, and famous in the world of trading. He published his first book The Alchemy of Trading in 1988. He extended his philanthropical activities to include funding organizations working for freedom within the Soviet Union and Eastern Europe. He first became known to the general public in 1992 when he made a billion dollars by breaking the Bank of England.
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