85-year-old billionaire George Soros has become more active in daily trading for his family office, taking a series of bearish bets. George Soros is known for netting a whopping $1 billion decades ago as a hedge fund manager when he and his chief strategist at the time Stan Druckenmiller predicted that the U.K. would eventually be forced to devalue its currency (the pound).
Anticipating some weaknesses in various global markets, Soros Fund Management decided to cut its well-disclosed stock holdings by a 37 percent average in the first quarter while also buying the shares of gold miners. Since that time to date, the S&P 500 has gradually returned to 3.1 percent. His largest new position Barrick Gold Corp., disclosed in the quarter, performed better, jumping by 44 percent.
Below is a look at the results of some of the recent calls by Soros, who is said to be worth an estimated $24.7 billion, and those of the other trades done by his family office over the past few years.
George Soros has been worried about China since 2013, concerned that the country’s leaders may not be able to curb the economic downturn. Earlier in the year, he compared the economy of China to that of the U.S. in 2007-08, pointing out that debt-fueled growth has produced instability and uncertainty in China’s banking system.
There may be more defaults looming in the countries corporate bond market. According to Bloomberg Intelligence 15.6, trillion yuan (that is $2.4 trillion) of corporate borrowing is regarded as at risk loans (they can be classified as those where a borrower does not have enough earnings to cover the interest payments). That sum is equal to 23 percent China’s gross domestic product as at 2015.
China’s Hang Seng Index returned 10 percent within the past three years which is not so great.
On Sept. 24, 2011, during a panel discussion George Soros said that the Greece European was more severe compared to the crisis of 2008. In 2015, he asserted that Greece has a 50-50 chance leaving the euro area.
There are signs that nervousness is ebbing about the euro area economy as investors are increasingly focused on China. Greece along with its creditors might be on the verge of agreeing to disburse a new bailout package that would allow the country meet its debt payments in the summer and also pave way for restoring the nation’s access to the ECB’s regular refinancing operations.
Since Soros’s comments in 2011, Bloomberg European 500 Index returned 82 percent. The European sovereign debt returned 14 percent to the dollar.
Soros has been invested in Argentina for decades and wagered successfully on the nation’s defaulted bonds. On several occasions, he’d meet personally with the ex-President Cristina Fernandez de Kirchner to talk about the country’s economic prospects. Representatives for his fund did participate in Argentina’s bond roadshow back in April, after which the government sold $16.5 billion in securities upon returning to the world debt market.
Argentina’s bonds have managed to return 57 percent on the average since Soros’s bet was revealed in August 2014.
Soros’s family office made about $1 billion between November 2012 and February 2013 after betting that the yen would tumble with the Prime minister’s election (Shinzo Abe). Shinzo pressured the Bank of Japan to launch additional stimulus measures. Several months later, Soros’s warned that the moves to broaden monetary easing may trigger an avalanche in Japanese yen as citizens continue to shift their money.
The yen has continued to fall following Soros’s comments.
Learn more about George Soros: