Soros Drops US Stocks, Picks up Gold Instead

As reported by Bloomberg, billionaire philanthropist George Soros’s previous quarter ended in a way that points to a decreased interest in US investments.

Soros Fund Management disclosed that the end of March saw a 37% drop in US stocks, which accounted for $3.5 billion in holdings. Soros Fund Management released $173 million worth of shares in Level 3 Communications Inc. and $161 million in Dow Chemical Co. Soros’ firm also removed all investments from Delta Airlines Inc. and Endo International Plc.

In place of these former holdings in his firm’s portfolio, George Soros turned his interest towards gold. Soros took the option to acquire more than one million in SPDR Gold Trust shares. Even more precious metals were acquired through Barrick Gold Corp. in the amount of $264 million in shares, which makes up almost two percent of the company.

Soros Fund Management only concerns itself with George Soros’ personal fortune, and its activity has been a source of curiosity for those wanting to know more about investing. After all, it’s his understanding of the market that helped George Soros build a $24 billion-dollar fortune, and his insights into the inner workings of the market are always taken quite seriously. In recent years, Soros has warned about the risks of dealing with China due to its obsession with debt and how intrinsic it is with Chinese economy. These conditions are on par with the state of the global economy in 2007 which led to the global recession. He’s stated that an inevitable drop is coming for China’s economy, but US stocks and government bonds will follow soon after. Read more at http://www.nybooks.com/contributors/george-soros/

Soros isn’t alone when it comes to these observations. Stan Druckenmiller, former chief strategist working for Soros, has bought into the gold obsession as well, pointing to the behavior of banks who are currently playing around with negative interest rates, which could exacerbate the debt situation in China.

Turning to gold does seem like the smart move at the moment. In the first quarter of 2016, gold has seen a 16% increase in value, the biggest jump it’s experienced since 1986. Following this trend Barrick’s shares have more than doubled in price as the cost of mining continues to drop.

Other firms on http://www.theatlantic.com/magazine/archive/1997/02/the-capitalist-threat/376773/ seem to be following these trends Millennium Management, Citadel Advisors, and Glenview Capital Management all dropped investments in US stocks by last March. This was also followed by pretty significant drops in value. Millennium dropped by 17%, costing them $36.5 billion, Citadel’s equity holdings dropped 29%, which was valued at $38.8 billion, and Glenview fell by 22%, which was a loss of $13.6 billion.

All these figures were provided through 13F filings that are submitted within 45 days of the end of the quarter.