George Soros may be in his eighties, but he is a financial force to be reckoned with. Once called the “Man Who Broke the Bank of England” after making $1 billion in a single year (1992), Soros’ hedge fund, Soros Fund Management, has been producing high double-digit returns since 1969. Soros averaged 30.5% return from 1969 to 2000, when he retired.
Restless, Soros returned to the world of finance in 2007 to produce a whopping 32% return. While Soros’ performance in 2008 was a modest 8%, it was when most hedge funds had significant losses. Soros bounced back the next year to earn a 29% return, which incidentally netted him, the world’s 35th richest man, $3.3 billion in fees and gains. This year he lost around 6% during the first six months but he saw the current market decline coming. Before the plunge he had around 75% of his assets in cash.
Recently, Soros has been forced to scale back his hedge fund under new government regulations that came as a result of the financial crises. In spite of this, and the fact that Soros actually lost $1.5 billion in six months, Soros has come under allegations by Senator Richard Shelby (AL-R), who is quoted as saying:
It appears that Mr. Soros talked up financial reform only to sell it short. Don’t be surprised to see his fellow Wall Street financiers follow suit. They’ll use their political clout and legal muscle to sidestep Dodd-Frank while their smaller competitors and businesses take the hit.
It seems that when Soros loses, he loses big. For instance, since the end of last quarter, one of his positions, Dendreon Corp (DNDN), has lost 67%. Luckily he sold 45% of his stake before the huge decline. Steve Cohen wasn’t lucky. He actually increased his stake in DNDN by nearly 5% and he had more than $350 Million in DNDN at the end of June. His losses in DNDN exceeded $200 if he hasn’t sold any of his holdings until August 3rd.
Here are Soros’ top stock picks in his 13F portfolio at the end of June:
Company | Ticker | Value (x1000) | Activity |
SPDR S&P 500 ETF Puts | 538965 | 94% | |
ISHARES TR Puts | 413586 | 259% | |
ADECOAGRO S A | 295148 | -3% | |
MOTOROLA SOLUTIONS | 260685 | 26% | |
INTEROIL CORP | 232263 | -2% | |
LAWSON SOFTWARE Bonds | 223161 | 0% | |
NII HLDGS INC Bonds | 205723 | 19% | |
JDS UNIPHASE CORP Bonds | 139719 | -4% | |
POLO RALPH LAUREN | 131895 | 100% | |
CADENCE DESIGN SYSTEM Bonds | 127289 | 0% | |
BLACKBOARD Bonds | 123465 | 0% | |
WESTPORT INNOVATIONS | 120578 | -10% | |
VISTEON CORP | 108809 | -25% | |
ARRIS GROUP INC Bonds | 107368 | -7% | |
DIODES INC Bonds | 102070 | 0% | |
DENDREON CORP | 102006 | -45% | |
CADENCE DESIGN SYSTEM Bonds | 101323 | 1% | |
EMDEON INC | 90708 | -3% | |
VERIGY LTD Bonds | 88703 | 6% | |
LAWSON SOFTWARE | 86020 | 22% | |
DANAHER CORP DEL | 83803 | -16% | |
CERADYNE INC Bonds | CRDN | 74965 | 0% |
ORBITAL SCIENCES CORP Bonds | 74154 | 0% | |
CIENA CORP Bonds | 73810 | 43% | |
APPLE INC Calls | 70491 | 0% | |
RF MICRODEVICES Bonds | 66924 | 33% | |
NEWPORT CORP Bonds | 63581 | 14% | |
THERMO FISHER SCIENTIFIC | 60340 | 106% | |
TIME WARNER CABLE INC | 57986 | 991% | |
FEDEX CORP Calls | 57859 | 0% |
Luckily, the “Man Who Broke the Bank of England” still produces some major returns. For example, his position in Emdeon Inc (EM) gained 42% since the end of the second quarter. Soros was also able to gain 13% through his positions in both Apple Inc. (AAPL) and Interoil Corp (IOC). Apple is one of the most popular stock among hedge funds and didn’t disappoint its investors in 2011 (click here to see the 10 most popular stocks among hedge funds).
Soros’ top two positions are put options on the S&P 500 and Russell 2000 indices. He doubled his SPY short and more than tripled his IWM short. He had nearly $1 Billion in these two positions. We don’t know the details of these put positions but with the most recent decline in the market Soros probably made a bundle on these bets. Soros’ conservative stance can be seen from his bond holdings as well. Nearly half of his positions were bonds and these should hold up well in a declining market.
We like Soros. He has a huge bank of experience and well-documented successes. Investors can gather significant intelligence about the markets by following his transactions.
Disclosure: I am long SPY.
