Soros jumps back into gold and doubles down against the S&P 500Posted on — Leave a comment
Hedge-fund legend Stanley Druckenmiller, who vociferously came out in favor of gold during a presentation at the recent Sohn Investment Conference, has a famous mentor: fellow billionaire George Soros.
Now Soros, who once employed Druckenmiller as a portfolio manager at his famed Quantum Fund, is jumping back into the gold camp for the first time in years, regulatory filings for the first quarter of 2016 show. And whats more, Soros has become even more bearish on stocks.
Banking on bullion, miners: On the gold front, Soros 13F filing with the SEC reveals that he placed a bullish 1.1 million-share call option on the worlds biggest bullion-linked ETF, the GLD. The new wager comes after Soros Fund Management sold off about 531,000 GLD shares in the first quarter of 2013.
Soros also purchased sizeable stakes in the worlds biggest gold producer as well as the worlds largest precious metals streaming company.
As for stocks, Soros substantially cut his exposure a move that was no surprise given his publically bearish stance on China and its debt problems, which he warned could result in a bigger crash than the 2008-09 crisis.
Accordingly, Soros cut his long equity holdings by more than one-third, to just $4.5 billion. He also doubled down on his bearish bets on the S&P 500, buying more than $200 million worth of SPY puts, or bets that the stock indexs price will fall.
Longtime bull Paulson takes profits: Not every billionaire was buying, however. Paulson & Co. chief John Paulson, who made his fortune betting against subprime housing and also with early investments in gold, sold 17% of his GLD shares, reducing his 5.8 million-share stake to 4.8 million. He still remains the third-biggest investor in the gold fund, after BlackRock and First Eagle Investment Management.
If you were already long, which clearly Paulson was, maybe hes just taking some profits off the table, TD Securities strategist Mike Dragosits told Reuters, alluding to the $5 billion Paulson reportedly earned from gold in 2010.
Paulsons current take on gold is unclear, but count Soros in as a member of the heavyweight division of gold bulls that currently includes Druckenmiller, Ray Dalio, David Einhorn, Paul Singer, and Jeff Gundlach.