George Soros makes a big bet against stocks

Does the billionaire investor know something the rest of us don't?

By MSN Money Partner Aug 15, 2014 4:01PM
Credit: © ChinaFotoPress/Getty Images

Caption: George Soros
By Barbara Kollmeyer, MarketWatch

Oh, goody. It’s 13F time, when mere mortals like us get to see how the big boys rolled the dice in the last quarter.


Among the highlights, Soros Fund Management increased a bear-call bet on the Standard & Poor's 500 Index ($INX) in a huge way. 


The fund lifted a "put" position -- a bet the market will go lower -- on the S&P 500 ETF (SPY) to its biggest size yet, in terms of value and portfolio percentage, making a 605 percent leap over the previous quarter.


Bullion Baron, who has long kept a beady eye on George Soros' (pictured) SPY moves, has summed up the latest dealings. He speculated that this could be a hedge -- or Soros is really worried about something. 


One possible something is China, which the hedge-fund titan referred to as a global uncertainty earlier in the year, notes the Baron.


Soros also lifted positions in Apple (AAPL) and Facebook (FB) and a portfolio loaded up with stocks, so he can't possibly be all that gloomy. As for that China unease, WSJ’s MoneyBeat reports that China bears are entrenched and see stocks headed for a big fall. 


One strategist says it's not good to see that stocks there have been rallying on both good and bad economic news.


"In [a] market frenzy, it is difficult to keep a cool head. But if things don't add up, it will eventually fall apart," Hao Hong, Bank of Communications international strategist, tells MoneyBeat.


Now the only problem here, says the Baron, is that if things go pear-shaped in China, that's not great news for equity markets anywhere, especially those at overvalued levels. Just a reminder, the 13Fs are from the second quarter so for all we know Soros has changed his mind completely since then.


In the short term though, it seems global managers are willing to place their bets on Wall Street. What IG's Chris Weston hears among some institutional funds, he says, is that with Europe pinned down by Russian worries and growth problems, most think U.S. stocks are a pretty good bet, at least for the short term -- three to six months.


"From a relative-growth perspective, the U.S. is significantly outperforming Europe, corporate earnings have been good. From a geopolitical standpoint . . . where do you go to invest right now, with bond yields so low? The belief is that the U.S., on a relative basis, is going to outperform," says Weston.


He says if you'd asked him three months ago what his biggest worry was, he would have said a 10 percent drop for the S&P 500, due to a major rise in 10-year bond yields. "That's clearly not going to happen anytime soon," he says.


Recent data from Bank of America Merrill Lynch data shows fund money poured out of Europe in this week, into Japan and China, with modest flows into the U.S.


More from MarketWatch


Tags: AAPLFBSPY
81Comments
Aug 15, 2014 8:09PM
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 If Soros was a Republican, he'd be demonized by the liberal Democrats and the liberal media.
Aug 15, 2014 7:01PM
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Soro's is a wall street criminal who has raped and pillaged many with his manipulation and lawless insider trading
Aug 15, 2014 4:53PM
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Figures he'd lay a big bet against America, he's a democrat that supports Obama.  Support an incompetent, get him in charge, and then bet the farm against him...


A true democrat...

Aug 15, 2014 7:03PM
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He's probably worried about the upcoming impact of ObamaCare
Aug 16, 2014 8:21AM
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Funny how when the Demoncraps talk about money in politics, they only speak of the Koch brothers. They never speak of the man Obama answers to, Soros.
Aug 16, 2014 8:17AM
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this guy controls the puppet wires attached to obama/reid/pelosi/biden
Aug 15, 2014 8:59PM
Aug 16, 2014 11:23AM
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Barack Obama's decision to prop up New Guinea's oil industry while at the same time derailing American energy independence. American energy starvation is the Obama plan on the table, but watch the hand behind his back. Who owns Interoil, the New Guinea oil company? A major holder of Interoil is George Soros. This is nearly the same situation that occurred last year with Brazilian oil company named Petrobas. The Obama administration lent Brazil millions to prop up the Brazilian oil company, Petrobas. Soros owned large stock holdings and the next thing you know, Obama tells Brazil we want to become their best customer. At the same time, Obama has shut down the Gulf coast oil industry and refused to process oil exploration and drilling permits to American companies. So to hear Obama talk about energy independence based on solar and wind is a joke, when what he actually means is: Let's make everyone else rich with American taxpayer money, which in turn makes George Soros rich, and Americans can go eat dirt.

Aug 15, 2014 6:00PM
Aug 16, 2014 3:38PM
Aug 15, 2014 7:19PM
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Soros is simply doing what any smart Wealthy  investor on his level does, he is hedging his holdings against a Stock Market Drop. When you are as wealthy as he is, that's always a prudent thing to do. Why is it that Folks that are Super Rich understand this while some that aren't don't. Oh that's right, that's why they are the Super Wealthy.

Those that have the most success don't make a bunch of excuses to why or why not. They just get it done. Everyone else just watches. Figures how some folks read every part of the article but this sentence.

"Soros also lifted positions in Apple and Facebook and a portfolio loaded up with stocks, so he can't possibly be all that gloomy."
Aug 16, 2014 11:30AM
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Want to see his BET COME TRUE,,,   PULL THE Q E  PLUG

IT WILL CRASH AND BURN FASTER THAN AN OLD BARN FULL OF OLD HAY
Aug 15, 2014 5:45PM
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Seems Stupid to bet against a huge index like the S&P500. If he really believes that stocks will go down best to bet against the stocks with the highest volatility and those stocks that are sensitive to consumer spending. Even if the S&P goes down 10% odds are some stocks that make up the S&P 500 will go down far more.
Aug 16, 2014 2:45PM
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No worse than Buffett and am no Democrat.  Rich Man Poor Man, if you remember the movie, and these "billionaire crooks" do make calls (phone) to each other and are privy to all insider information and "make markets", accordingly (puts or calls).  The fed is just another phone call they make to know the monies being poured in for any quarter.  The SEC is another call they make...keep off our treasonous backs and we will reward you.  Think am kidding, huh? Our economy is the tank and will tank.  Will not make any difference, soon enough.   
Aug 16, 2014 7:42PM
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this media has the audacity to report abuse of power by Texas Gov. Perry.  Give me a break!
Aug 16, 2014 8:14PM
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Soros looks like he doesn't have long to live.

Anyway, I'm nearly 100% in except for a few dollars in my checking accounts. I did sell one position, because I thought it was taking on too much risk mainly due to what I considered poor judgement on the part of the portfolio manager. That money was used to establish a new position in a more conservative account. 

The market is going higher. One reason is there are no investment alternatives to stocks. What bonds? Next the Fed will remain accommodative even after QE ends. The economy continues to heal helping business, and the consumer. Although the economy and the market aren't perfectly correlated, I expect an improving economy will push the market higher. Stock aren't over valued, and an increase in earnings without multiple expansions will do the trick, but the easy money has been made. 

I figure the market has a couple more years of life left in it, before the next recession hits.
Aug 16, 2014 8:45PM
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Soros is a successful crook. He worked for the NAZI's during WW2. So he is a war criminal. Even if he is Jewish. He should be deported just like anybody else that worked for them .No matter how innocent. 
Aug 15, 2014 8:57PM
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Sounds like he isn't addicted to Kool Aid and has his eyes open.
Aug 16, 2014 12:16PM
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He knows what everybody knows. Our government is totally corrupt and doesn't give a flip what the people think or want. And that the people have zero control over what the government does. And that the government is propping up asset values, (they've almost got them back to the previous bubble level) and if they ever stop... poof they all drop 50 to 60% immediately.

 

 

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