Editor: Philip Ragner | Tactical Investor
The Journal’s Gregory Zuckerman and Juliet Chung cited people familiar with Soros’ trading who said the billionaire became bearish after Trump’s the victory, and those bets seem to have come back to bite him.
However, Soros’ larger fund, Soros Fund Management, gained 5% over the year, according to the Journal.
Soros supported Trump’s opponent, Hillary Clinton, and contributed millions to super PACs backing her campaign, so it may come as no surprise that he was sceptical of the market after Trump’s upset victory.
Additionally, most Wall Street analysts believed that a Trump win would sow uncertainty and cause a sell-off.
The Dow Jones industrial average is up nearly 10% since Election Day, and all three major US stock indexes have set all-time highs after Trump’s win.
Stanley Druckenmiller, a Soros protégé who worked at his firm until 2000, was much more prescient. Druckenmiller bet that the market would rally on a Trump victory, and that bet appears to have paid off – his firm gained 10% in 2016, according to The Journal. Full Story
George Soros has added to his losing bets against the stock market
His two primary plays — against large caps via the S&P 500 and small caps via the Russell 2000 — have a notional, or potential, value of $764.3 million, according to an analysis from S&P Global Market Intelligence. The plays are through his family office, Soros Fund Management.
They continue a trend he began in 2016 of betting against the market, moves that haven’t worked out well considering the latest leg in the bull market. The S&P 500 is up 5.7 per cent this year while the Russell 2000 is up fractionally at 0.3 per cent.
As of the end of the quarter, Soros held 3.3 million shares of the iShares Russell 2000 exchange-traded fund puts, an increase of 36 per cent from the previous quarter and carrying a notional value of $459.6 million. He increased his holdings of SPDR S&P 500 puts by 162 per cent from the fourth quarter to 1.3 million shares, carrying a notional value of $304.7 million. Full Story