George Soros: The Guru Outlook 66 comments
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This week’s Guru Outlook takes a look inside the mind of George Soros – one of the original masters of the global macro hedge fund universe. Soros, of course, became famous for breaking the Bank of England. Soros made a spectacularly leveraged bet against the British Pound which netted him over $1B in a day.
Soros rose to recent notoriety for predicting the financial crisis. He was far more bearish than most others and appeared to have a crystal ball with a play-by-play for each step of the crisis. Like some of the gurus we’ve spoken of lately, he wasn’t bearish all the way up. Soros saw the decline in markets as a buying opportunity and has taken the liberty to make billions for his investors on both the way down and the way up.
Although Soros has turned more bullish over the course of the last 6 months he has not lost sight of the forest for the trees. Much like Jeremy Grantham, Soros believes we are confronted with massive structural long-term problems – particularly in the United States. He believes U.S. consumers are in the middle of a long-term deleveraging process and earlier this month he described the U.S. banking system as “bankrupt”. He sees very weak consumer spending and a drag from the banking sector holding down global growth for years to come.
In a recent interview, he said the market is now very overextended and at substantial risk of another downturn. But that doesn’t mean the market will turn down immediately. Soros says the market is likely to remain buoyant throughout the remainder of 2009 and will likely face its reality of weak global growth in 2010. He says the rally has been driven by the government stimulus and little else. Soros says the recent uptick in bank earnings is essentially a fraud:
“Those earnings are not the achievement of risk-takers. These are gifts, hidden gifts, from the government.”
Soros recently said the move down in the dollar was unsustainable (he obviously reads too much TPC) and that its link to the Renminbi would reduce the overall decline. Despite this, Soros is betting big on all things “real”. In particular, Soros is betting big on oil related names. Soros has over 33% of his funds invested in energy related names. He recently announced large positions in Interoil (IOC) and Headwaters (HW). Soros’ largest positions remain PetroBasiliero (PBR) and Hess (HES) which both represent over 5% of his portfolio.
Soros was also a heavy investor in convertible bonds in recent quarters. Of particular interest were semiconductor names. Soros bought large bond stakes in RF Micro Devices (RFMD), LSI (LSI), and Linear Tech (LLTC).
You can see his latest 13-f filing here for more details on specific positions.
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This article has 66 comments:
Soros is a smart cookie. HE made his fortune predicting currency futures. Currency futures are hard (impossible) to predict.
Alot of his success is do to brillance. But also he got very lucky !
The market action of this week suggests that a correction in commodity prices is underway. Whether this is a mild and short lived pause in an otherwise continuation in the upward trend or a deeper and longer correction will test the accuracy of the Soros assessment; at least for the short to middle term.
There is so much fraud in the system that favors those who have the power and are in the right place to take advantage of it. Banks like Goldman is making a killing from these "gifts", as Soros calls it or namely very cheap money (TARP), and also the very sinister HFT (high frequency trading) which is computerized insider trading that happens in a nano second.
The legacy governance system for the US capital market is in disrepair. To achieve real regulatory reform, policymakers have to move beyond form to substantive issues. Unless experimentations to the legacy, one-size-fits-all deterministic regime take place, our capital market will be caught in a recursive loop of errors of commission (boom-bust bubble inefficiencies) and errors of omission (externality market inefficiencies). Such inefficiencies will eventually render our source of economic wealth ineffective.
If this happens, we’re all screwed.
Stephen A. Boyko
n2keco@bellsouth.net
Author of “We’re All Screwed: How Toxic Regulation Will Crush the Free Market System”
w-apublishing.com (www.w-apublishing.com/...)
Book Review: Brenda Jubin, Ph.D Thursday, October 8, 2009
readingthemarkets.blog...
Boyko, We’re All Screwed!
Check out my blog at www.youngandinvested.com
On Oct 29 08:35 AM bexe wrote:
> Soros is a brilliant man and he knows the game.
> There is so much fraud in the system that favors those who have the
> power and are in the right place to take advantage of it. Banks like
> Goldman is making a killing from these "gifts", as Soros calls it
> or namely very cheap money (seekingalpha.com/symbo...),
> and also the very sinister HFT (high frequency trading) which is
> computerized insider trading that happens in a nano second.
Just imagine.
On Oct 29 09:11 AM kagame wrote:
> US needs startling new technological innovation to recover its economic
> dominance. Just think what we could have accomplished if any substantial
> part of that bailout and TARP stimulus was put into real industries
> that could produce actual products and create industrial jobs and
> supporting service jobs. We need more research and development!
> Think how bad the future will be for the US if we truly lose our
> innovative edge along with everything else.
You guys should stop yelling "liberal" every time you don't agree with a person's view. You gave up communist when the Wall came down. How about "not-conservative"
On Oct 29 09:29 AM p church wrote:
> If Soros is so smart, why is he a liberal?
On Oct 29 09:11 AM kagame wrote:
> US needs startling new technological innovation to recover its economic
> dominance. Just think what we could have accomplished if any substantial
> part of that bailout and TARP stimulus was put into real industries
> that could produce actual products and create industrial jobs and
> supporting service jobs. We need more research and development! Think
> how bad the future will be for the US if we truly lose our innovative
> edge along with everything else.
On Oct 29 09:46 AM kmf wrote:
> Because he is so smart!
> You guys should stop yelling "liberal" every time you don't agree
> with a person's view. You gave up communist when the Wall came down.
> How about "not-conservative"
On Oct 29 09:29 AM p church wrote:
> If Soros is so smart, why is he a liberal?
On Oct 29 08:13 AM Tom B wrote:
> Until people are working again, there will be no "real" recovery.
> Gov
The core difference is the idea of where the answers to the hard problems are to be found, Conservatives think that it has all been figured out already and if we find the right ancient text or history book, preferably a biography of some old white guy, the answers are there to be found.
Liberal progressive believe that what history tells you is that we need to keep evolving society, in fact according to Robert Wright, a leading modern thinker the structure of our world has favored the evolution of societies based on peace, commerce, reciprocal altruism, and mutual benefit.
Therefore figuring out new answers is more difficult and draws smarter people.
It is also why the left is harder to herd than the right, creating what appears to be chaos as opposed to the clean, lock step administration of conservative and other less tolerant government forms.
On Oct 29 09:29 AM p church wrote:
> If Soros is so smart, why is he a liberal?
He is vilified by the MSM and the right, and mostly ignored by the American progressives but to us Global citizens he is a hero that has donated Billions to feed, house and educate people about democracy.
On Oct 29 08:13 AM Tom B wrote:
> Until people are working again, there will be no "real" recovery.
> Gov't stimulus can't last forever.
Show me statistics and tell me in which favor are the results skewed, I would also like the sample size, or population size and the standard deviation and variance of both, or perhaps the use of a bi-cumulative distribution on intelligence? I would hope one would not try to convince someone by using a hyper-geometric statistic, where results are almost always varied due to small sample size.
On Oct 29 10:12 AM BudH wrote:
> Soros should be recognized as the financial terrorist he has been.
On Oct 29 11:37 AM joes wrote:
> In general studies have shown that liberals and progressives are
> smarter, here is just one example - tinyurl.com/5knb
>
> The core difference is the idea of where the answers to the hard
> problems are to be found, Conservatives think that it has all been
> figured out already and if we find the right ancient text or history
> book, preferably a biography of some old white guy, the answers are
> there to be found.
>
> Liberal progressive believe that what history tells you is that we
> need to keep evolving society, in fact according to Robert Wright,
> a leading modern thinker the structure of our world has favored the
> evolution of societies based on peace, commerce, reciprocal altruism,
> and mutual benefit.
>
> Therefore figuring out new answers is more difficult and draws smarter
> people.
>
> It is also why the left is harder to herd than the right, creating
> what appears to be chaos as opposed to the clean, lock step administration
> of conservative and other less tolerant government forms.
On Oct 29 09:11 AM kagame wrote:
> US needs startling new technological innovation to recover its economic
> dominance. Just think what we could have accomplished if any substantial
> part of that bailout and TARP stimulus was put into real industries
> that could produce actual products and create industrial jobs and
> supporting service jobs. We need more research and development!
> Think how bad the future will be for the US if we truly lose our
> innovative edge along with everything else.
On Oct 29 12:49 PM MayoW wrote:
> I agree that Soros is a very smart man, I disagree with the rash
> generalization that Liberals are smarter than Conservatives.
> Show me statistics and tell me in which favor are the results skewed,
> I would also like the sample size, or population size and the standard
> deviation and variance of both, or perhaps the use of a bi-cumulative
> distribution on intelligence? I would hope one would not try to convince
> someone by using a hyper-geometric statistic, where results are almost
> always varied due to small sample size.
However, that said, the man is good at what he does and his views are not to be taken lightly. And he is not the lone wolf out there either on this issue. Although, it seems, that no one including him wants to go to the brink: were are in fact screwed and the dollar is toast.
On Oct 29 09:29 AM p church wrote:
> If Soros is so smart, why is he a liberal?
Homes were used as ATM machines and the financial system cashed in and even become greedy to a point of destroying itself and taking down the entire population with it.
The unregulated era of Alan Greenspan empire powered the greedy in the financial system. The CDS market created an environment of huge profits for some at the cost of average American Tax payer.
Helicopter Ben Bernanke or Geithner are no different.
The united state must remain the innovator and provide the means for people to become wealthy through innovation. There should be regulations that would not allow very few manipulators (Like Soros or Warren Buffet, or Goldman Sachs) take the rest of the population to the cleaners.
Until the rules changes, we are headed for a much bigger worldwide financial disaster.....Preserve your wealth through Gold, and any other hard asset...Do not follow or become the victim of the wall street....
When the next election cycle is over maybe you and JoBama can join him in a third world country.
And what's up with the anti-westerner racism rhetoric?
I watched Barney Frank threaten Fanny Mae and Freddie Mac live on CSpan years ago. He told them they had to make subprime loans to people who couldn't afford mortgages. That the economically challenged shouldn't be denied the American Dream. Those of us who watched were surprised by Frank's threats of fines and other penalties. Based on this we predicted the bank failures to come when the mortgages inevitably couldn't be paid. And now Frank says the Republicans made him do it. LOL!
When has Frank done anything he didn't want to do?
Try taking your global citizenship somewhere else, like Chile or France.
On Oct 29 11:42 AM joes wrote:
> If George Soros was an true westerner, like English or Irish he would
> be recognized as the leading thinker of our times, his ideas of falsification
> and cognitive perception and material actions has made and saved
> me over the years.
>
> He is vilified by the MSM and the right, and mostly ignored by the
> American progressives but to us Global citizens he is a hero that
> has donated Billions to feed, house and educate people about democracy.
But, hey, if you love bull -shitters, market manipulators, and the vertically and mentally challenged, keep going with the flow.
Wall Street and the new regime are right with with you!
www.nytimes.com/2006/0...
No doubt that, in general, those conducting such studies are themselves liberal.
I've always considered people who agree with me to be smarter, too.
However, I do trust logic. For example, George Soros is a market manipulator and an extremely good one at that. George makes a killing by playing a high stakes form of poker. He loves to win, even if entire countries and the wealth their citizens is destroyed in the process. Logically, one would have to be suspect, at least cautious, of any data he releases, his motives or the generous information he offers. Follow him if you are a trusting soul but I know one thing - if I ever shake his hand, I'm counting my fingers afterward.
But all must respect his judgement.
On Oct 29 11:03 AM snappers wrote:
> Last forever!! Hell, thy given better than 1/3 to Acorn and the
> like. Show me one private sector job created out of this mess. Our
> unemployment numbers are straight out of the private sector. How
> many govt workers have been laid off to date?
I believe from his investing style he doesn't see politics, just the "truth" of how to make money on a position. You may not like him politically, but if you learn from him, you'll have a heck of a lot more money in your pocket.
I'm still wrestling with this reflexivity idea, but the guy is a savant so I take his investing commentary quite seriously.
On Oct 29 09:29 AM p church wrote:
> If Soros is so smart, why is he a liberal?
When that nut expressed incredulity that Soros is a liberal, I imagined it to be irony - until I remembered this is an American board.
On Oct 29 11:37 AM joes wrote:
> In general studies have shown that liberals and progressives are
> smarter, here is just one example - tinyurl.com/5knb
>
> The core difference is the idea of where the answers to the hard
> problems are to be found, Conservatives think that it has all been
> figured out already and if we find the right ancient text or history
> book, preferably a biography of some old white guy, the answers are
> there to be found.
>
> Liberal progressive believe that what history tells you is that we
> need to keep evolving society, in fact according to Robert Wright,
> a leading modern thinker the structure of our world has favored the
> evolution of societies based on peace, commerce, reciprocal altruism,
> and mutual benefit.
>
> Therefore figuring out new answers is more difficult and draws smarter
> people.
>
> It is also why the left is harder to herd than the right, creating
> what appears to be chaos as opposed to the clean, lock step administration
> of conservative and other less tolerant government forms.
Oh, I see, you're a 19 year old kid who found his dads statistics book.
Hyberbolic distributions are for finite populations of any size- usually used for quality assurance, not demographics. Unless you consider [population of the entire USA minus one] a determinable number.
I think you made up "bi-cumulative", which I assume would just be a regular cumulative histogram? Or possibly stacked with two variables, which seems pointless in this case?
Also, strictly speaking, "skewed results" would indicate incorrect results- a skewed population in demographics would indicate a non-normal distribution.
Moot point though, "intelligence" has no measurable meaning as far as I'm concerned and I would be very skeptical of any proposed study. The whole debate is outside the realm of science.
On Oct 29 12:49 PM MayoW wrote:
> I agree that Soros is a very smart man, I disagree with the rash
> generalization that Liberals are smarter than Conservatives.
> Show me statistics and tell me in which favor are the results skewed,
> I would also like the sample size, or population size and the standard
> deviation and variance of both, or perhaps the use of a bi-cumulative
> distribution on intelligence? I would hope one would not try to convince
> someone by using a hyper-geometric statistic, where results are almost
> always varied due to small sample size.
What was that Lincoln quote? "You can't fool ALL the people All the time"
On Oct 29 10:32 AM Old Wizard wrote:
> Soros is also smart enough to figure out how to pay only 15% marginal
> income tax rate on his earnings of well over a billion. Because he
> is such a contributor to the current political party in power, nobody
> in gov. is asking him to spread the wealth. Think of this: if he
> had to pay income taxes here at a marginal 35% rate, the difference
> would be 200m or more a year. I would like to understand the amount
> of money he spends annually funding liberal front organizations and
> liberal democratic candidates. My cut to reform the tremendous speculation
> and manipulation associated with oil and other commodities is to
> require at least 50 cents on the dollar for commodity purchases.
> Anyone with a large amount of capital can manipulate the commodity
> market by buying large amounts with relatively little cash on any
> rumor, real or made-up. Maybe he is a guru, but I am suspicious that
> he now can make his predictions come true and has learned how to
> play our system by controlling major media outlets, funding candidates,and
> front pressure groups. All this while using a loophole in our tax
> law to pay much less income tax. A run up in oil prices in the future
> is not hard to predict, when the administration refuses to back the
> use of natural gas-driven transportation, has no comprehensive energy
> policy, creates a forced march to electric cars and restricts oil
> and gas domestic gas and oil exploration, under the guise of global
> warming and environmental purity. The goals for alternate energy
> generation are trivial and the real impediments to these energy source
> insertions are environmental regulations and stalls that the gov.
> is doing nothing to remove. The story is much the same for nuclear
> power plants. How much Soros money is funding the groups who are
> impeding new energy sources from coming to fruition? In this environment,
> it's not hard to "predict" that oil and coal commodities will get
> more expensive. A tidbit in this vein is the Petrobras story, where
> Soros made a bundle, followed by our ex-im bank's 2.5 b investment
> which will help that state-owned company drill for oil off Brazil's
> coast. This somehow is ok environmentally and obviously was predictable
> by a guru.
On Oct 29 09:54 AM sunnsea wrote:
> Agree. People who watch Fake News and listen to right-wing talk radio
> all day generally have a very limited vocabulary. Soros has lived
> under both fascism and communism. He knows a lot more about either
> of them then any Fake News pundit or corporate dupe teabagger.<br/>
On Oct 29 09:29 AM p church wrote:
> If Soros is so smart, why is he a liberal?
On Oct 29 11:37 AM joes wrote:
> In general studies have shown that liberals and progressives are
> smarter, here is just one example - tinyurl.com/5knb
>
> The core difference is the idea of where the answers to the hard
> problems are to be found, Conservatives think that it has all been
> figured out already and if we find the right ancient text or history
> book, preferably a biography of some old white guy, the answers are
> there to be found.
>
> Liberal progressive believe that what history tells you is that we
> need to keep evolving society, in fact according to Robert Wright,
> a leading modern thinker the structure of our world has favored the
> evolution of societies based on peace, commerce, reciprocal altruism,
> and mutual benefit.
>
> Therefore figuring out new answers is more difficult and draws smarter
> people.
>
When Soros talks, it pays well to listen and learn. When Rogers talks, it pays to run out the door before he takes your money.
I have seen no evidence of it.
Here in the UK the vast majority of politicians are self-serving idiots, irrelevant of their political stance.
On Oct 29 09:29 AM p church wrote:
> If Soros is so smart, why is he a liberal?
Soros represents the new elite, who use the collusion of politics and corporations to make a lot of money on both ends.
Progressivism is simply a monarchical structure that presents itself as compassionate, but uses tyranny of the educated (over-educated) via corporate and government collusion to oppress the masses.
This is accomplished by creating a dependent underclass, a near poverty level middle class, and a small segment of upper middle class and elites.
If the upper classes have enough money and power, they can perpetually bait the underclass's into class warfare and sacrificing their freedom and liberty - and thus responsibility - for a loaf of bread, a case of beer, and a chicken in every pot.
The last thing progressives want is a large and well-to-do educated middle class; this would threaten their power base. Instead they use debt spending, obtuse and abusive taxation and tax codes on the government end - and increased costs for insurance and goods and services on the corporate end - to ensure the shrinking of the middle class.
To be an upper-middle class or elite progressive is to be a Lord or Lady ruling over the peasants with greed and masqueraded benevolence.
Progressives do not want an independent merchant class, they do not want an enlightened, self-sufficient, and free middle class of skilled workers and producers. They do not want or believe in individual liberty or rights, and are scared to death of an independent and thinking populace.
Their perspective is one of superiority, therefore, the average person needs to be told what to do, and their economic and intellectual freedom squelched to the point where they are indentured to the elites in order to survive.
money.cnn.com/2000/04/.../
On Oct 30 11:03 AM bobbobwhite wrote:
> Always pay close attention to Soros, one of the smartest investors
> ever. Buffett gets all the headlines but Soros is the genius of the
> two and the one who made that egoist Jim Rogers all of his money
> back in the 70's, contrary to what one may read in the bloated bragging
> of Roger's claims that he did it himself.
>
> When Soros talks, it pays well to listen and learn. When Rogers talks,
> it pays to run out the door before he takes your money.
Chinadaily.com
"Funds launched to back hi-tech sectors"
31 Oct, 2009
Not a single smart politician to be found anywhere in the US, in either political party.
chinadaily.com.cn/...
On Oct 29 09:11 AM kagame wrote:
> US needs startling new technological innovation to recover its economic
> dominance. Just think what we could have accomplished if any substantial
> part of that bailout and TARP stimulus was put into real industries
> that could produce actual products and create industrial jobs and
> supporting service jobs. We need more research and development! Think
> how bad the future will be for the US if we truly lose our innovative
> edge along with everything else.
Here is the problem. Many people look at a house and say a house is a commodity. Those people will compete on price, and cry and look to mommy-government as the price falls. Others are looking for way to reach one house into different markets and find more efficient ways to sell it. The later are going to get better prices for the same house.
This is the challenge in DC and at your office for that matter. The leaders we have believe that if there was a way to do something better it would have occurred to them. We are largely lead by the smartest guys in the room.
On Oct 29 09:11 AM kagame wrote:
> US needs startling new technological innovation to recover its economic
> dominance. Just think what we could have accomplished if any substantial
> part of that bailout and TARP stimulus was put into real industries
> that could produce actual products and create industrial jobs and
> supporting service jobs. We need more research and development! Think
> how bad the future will be for the US if we truly lose our innovative
> edge along with everything else.
Sounds like a Halloween horror.
On Oct 30 01:52 PM Sovestor wrote:
> When George Soros says one thing and has position in certain companies
> and asset classes, it does not mean he will not change his mind in
> a second and have completely different positions and views at the
> same time.
On Oct 29 09:29 AM p church wrote:
> If Soros is so smart, why is he a liberal?
it's time to solve our biggest social problems. we can't just say, "no." we have to recognize that many people have sex or gamble or take drugs, regardless of our personal beliefs. we've imprisoned millions of people in this country because they do not agree with us. that's what they do in communist countries. that shouldn't be the american way.
we've wasted time, human resources and countless tax dollars trying to enforce laws that make no sense. how can we claim intellectual superiority when we continue to repeat the mistakes of the past. did prohibition teach us nothing?
On Oct 29 09:31 AM Mike from NYC wrote:
> Just imagine if the USA didn't act like the world's police force
> at no charge and the money invested in technology and infrastructure
> for the past 60 years. Just imagine if we didn't start fighting a
> war in Iraq against imaginary WMDs and put that $1Trillion to work
> in the USA.
>
> Just imagine.
>
> On Oct 29 09:11 AM kagame wrote:
On Oct 31 07:39 AM a fat panda wrote:
> You are right but you need to broaden your comment. It isn't just
> technical innovation that we need. We need to improve the way we
> produce everything. This is a particular problem in real estate,
> where we are letting prices fall instead of improving the value of
> the property through innovation.
>
> Here is the problem. Many people look at a house and say a house
> is a commodity. Those people will compete on price, and cry and look
> to mommy-government as the price falls. Others are looking for way
> to reach one house into different markets and find more efficient
> ways to sell it. The later are going to get better prices for the
> same house.
>