Several months ago, the financial world was stunned by reports that the billionaire businessman, Stanley Druckenmiller has warned that the bull market is exhausting and that he too was considering dumping equities and instead, buy gold. Another reports suggested that the billionaire Carl Icahn had taken the net exposure on his own hedge fund, Icahn Enterprises from an uncertain 25% net short to a nearly apocalyptic 149% net short – typically like betting on a market crash.
Recently moreover, a more stunning report by Wall Street Journal has revealed that after almost a decade interval, George Soros has not only made a return to financial investment/betting, he has individually directed a number of big bearish investments to profit from the anticipated economic crisis, lured by the opportunities of the current economic situation in Asian countries.
The last time Soros was involved in a similar type an investment was in 2007 when he got worried about housing, placed bearish wagers and after two year investment period, he obtained more than $1 billion in profits. George Soros, whose hedge fund, Soros Fund Management manages more than $30 billion of his wealth had sold stocks worth more than $2 billion, buying Gold and shares of Gold, while he anticipated weakness in various world financial markets.
Soros’s return to investment comes as shock considering that his recently activities were more politics and philanthropy oriented. He has been a key contributor to Hillary Clinton’s Super PAC as well as donating to other democratic groups. This suggested his boredom in the financial market.
It was expected that as Soros got older and older, he would delegate his firm’s investments like he did with one of Trump’s fundraiser, Steven Munchin who started his own hedge fund. But as WSJ reports, he is currently spending more than time in his office directing trades. He has also been in more frequent contact with his executives as Wall Street Journal reports.
George Soros has invested more than $2 billion with Scott Bessent’s firm, Key Sqaure Corporation. He also tapped Ted Burdick earlier this year to be his chief investment officer. Considering that Mr. Burdick has a background in arbitrage, distressed debt and other kinds of trading, then it is clear that Soros is shifting to bearish trading rather than macro-finance which has been his lifelong specialty.
George Soros intends to build a major bearish position. His worldview has darkened in the past 6 months as political and economic issues in Europe, China and elsewhere continue to intricate. With the U.S. Stock market edging back toward record and the Chinese market moving toward stabilization, Soros is skeptical of Chinese Economy, which is constantly slowing.
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