By Midas Mulligan Magoo
Though he is not one of my favorite people in the industry it isn’t really possible to doubt the investing acumen of George Soros. Over the years many have made a good bit of money in markets by simply mimicking his strategies. The most recent, however, is hardly worthwhile replicating for most investors.
Apparently, George’s flagship Quantum Fund currently has 75% of its assets in cash. Another sign that the even the most heavyweight financial players are unsure of the situation and that August 2011 is beginning to look more and more like August 2008.
Hoarding cash is usually a signal of uncertainty or extremely bearish beliefs. In today's uncertain environment, however, it can be considered a growth strategy and hedging instrument. Presumably Quantum’s cash is spread out over a basket of currencies ready to hop from one to the next if some sort of market shattering event occurs.
Soros has recently viewed his bearish perspective on Europe and is one of an increasing number of insiders claiming that Greece must be sent packing from the monetary union. As we full well know, cataclysmic events can often act like catalysts for markets. Perhaps the great cash hoard is akin to an army stockpiling weapons in expectation of a great battle. Soros has been known to play dead before and I wouldn’t put this seemingly risk averse move beyond being an aggressive strategy in passive clothing.