The global economy is on life support, and the prognosis isn’t very good, according to hedge fund manager and economic forecaster George Soros. Soros has been talking about a major global meltdown for the last four years, and it appears the billionaire is making adjustments in his portfolio to protect his assets. Soros recently reduced his stock market holdings by 37 percent, according to an article published by Bloomberg.com. His current stock holdings dropped to $3.5 billion. The interesting news about Soros and his sell-off is he bought $241 million worth of gold mining shares. And George Soros has option contracts of 2.1 million shares of SPDR 500 EFT Trust. That’s the exchange-traded fund that tracks the S&P 500 index.
Soros has a history of being ahead of the curve when it comes to buying and selling assets. In 1992, he surprised the Bank of England and bet the pound sterling would depreciate against the U.S. dollar and the German mark. George Soros won that bet, and his fund picked up more than $7 billion on that deal. Soros pocketed 20 percent of the $7 billion for managing the fund. He made more than $1.4 billion on that trade, and he hasn’t stopped making money since then. MoneyCnn.com published an article recently that pegs Soros worth at $24 billion, but it’s hard to know exactly how much Soros is worth. See: http://money.cnn.com/2016/05/17/investing/george-soros-betting-against-stocks-buy-gold/. All his financial transactions are not made public, but Forbes claims Soros is worth enough to be one of the wealthiest people on the planet.
Read more: Billionaire Soros Cuts U.S. Stocks by 37%, Buys Gold Miner
The fact that Soros is moving money into gold mining is a smart move since central banks around the world are buying gold again. Other hedge funds are also getting into the precious metal market because they believe the Soros prediction is fact, not fiction. The main reason for the Soros move is China’s inability to get their economic issues under control. China has more than $3.5 trillion in capital reserves, but the government is spending those reserves at an alarming rate to keep their stock market solvent and to fortify their currency on the exchange market. Mr. George Soros believes the Chinese yuan will lose more than 30 percent of its value over the next three years, and he is betting millions of dollars that will happen.
Not all investors are convinced that there is going to be another 2008 type economic meltdown, but the big hedge fund are preparing for one just in case Soros is right. They know Soros is right more than he is wrong when it comes to investing.