George Soros is a man well know for taking huge gambles in his stride. He is perhaps most famous for a trade in September of 1992. He risked 10 billion dollars on just one currency speculation. Most traders would never have made such a deal. He famously profited one billion dollars in just a single day.
He has been semi-retired from trading for a while now. His recent activity has many wondering just what he is up to. He believes that the recent market rally is an artificial rally, not a true recovery. It was then boosted by the Fed keeping the interest rates extremely low.
The Soros Fund Management LLC, George Soros personal money management fund, has recently sold many of his stocks. They bought up a large number of gold and gold mining shares. Buying precious materials like gold is often done to help protect assets in times of unease.
Soros fears that the global economy is about to take a turn for the worse. There are a number of reasons for this. Many of them are tied to current world unrest. Others have to do with a poorly performing market.
Billionaire Investor George Soros Sees Economic Trouble Ahead
George Soros – Forbes
Terrorism is on the rise. The American government is currently experiencing one of the most divisive and troubling elections in modern history. There is even the possibility of violence at the party convention in Cleveland. The U.K., the world’s fifth largest economy, is considering withdrawing from the European Union. The market is slowing in China. South American economies are slowly unraveling.
The stock market isn’t looking so healthy either. The next quarter’s earnings are expected to be as bad as the last quarter. Stocks are overvalued and earnings are expected to keep dropping. Soros may be well on the right track, buying up gold and miner’s shares. The market is poised for a large change.
The Fed raised the interest rate by 25 basis points in December 2015. In January the S&P Index fell 5 percent. The Federal Reserve plans to raise rates several times in 2016. Unless the market situation changes drastically, there is a large possibility for a huge down turn.
Historically speaking, George Soros has been able to make most of his fortune by placing well-thought out bets in markets primed for a crash. This is no different. The Fed has been loath to adjust rates for nearly a decade. During that time, investors have pushed the envelope. They have thrust the value of bonds, stocks and other assets to extremes.
Soros’s recent bearish investment moves are perfect for taking advantage of this newest stock market bubble. With an unsure market and political upheaval a sure thing, George Soros may stand to make himself another fortune.
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