George Soros, who had apparently taken a break from wall street, is back to trading. He has taken a bearish move by selling stocks and in turn buying gold and stocks in gold miners. He has taken the measures due to his predictions that the European Union might collapse arising from the refugee crisis. He also points out that the activities in Britain which plan on a referendum to exit European Union might lead to a decrease of prices in the stock market. George Soros also indicates that there is a lot of capital flight from China which further enhances his prospect of making high profits from his bearish tendency of selling shares now.
Being a trading legend, George Soros has obviously raised eyebrows with people starting to look at the prospect of stock prices plunging at this time. The trading magnate is concerned about large market shifts that will occur globally. His sentiments are being aired by other stock market geniuses. This has led to the question of whether a crisis like the one experienced in the late 2000’s is about to occur once more. With the world not having recovered quite fully from the shock causes by the inflation in the recent past there is a need to take control measures to prevent a fall in the stock market.
Soros since founding Hedge Fund which evolved over time to the well famed Quantum Fund has shown nothing but brilliance in his interpretation of the market fund. He has beaten the market trend on more than one occasion by making predictions that have proved to be very fruitful.
In 2008 in his book,”The New Paradigm for Financial Markets.”. He made a prediction about the financial crisis that occurred that year which he termed as being the worst since the crisis in 1930. This was another of his predictions that showed him as a brilliant trader and investor who was well aware of his trading environment.
George Soros is famed for making great returns on investment with going short on the British Pound in 1992 being his highlight.
In 1992 he risked a good $10 billion to speculate against the pound and in turn made $1 billion in profit on a one day. It is said that his speculation during that period gave him up to $2 billion profits. He believes that market participants work together and move in herds. This simply explains the reason why he foresees a great negative wave of change in the stock market due to the uncertainty that Britain in the case of exit will lead to stockholders selling their stocks in bulk. In case that happens the decrease in demand for the shares will lead to a fall in prices. George Soros has therefore chosen to buy gold which is considered less volatile in order to avoid great losses.
For a long time, Soros has been away from major investment decision in his companies, but he has recently become much more active. He has increased his interaction with many executives and has been seen as increasingly vigilant to avoid becoming a victim in the expected surge of the stock market. Soros has made billions for himself and others in his overly successful Quantum Fund. The firm under his stewardship made an average of 30% profit per year for 20 years with some years recording 100% profit. He is most certainly an icon, and his predictions are bound to influence a good number of people. The spotlight is shining on him this time round to see if he will continue to make great predictions as he did before.
He makes clear his observation that people trade using emotions instead of the logical interpretation of the situation. Thus in the situation where the Euro crisis has not completely ebbed off and continuing problems in the region he indicates in his book, ” The Tragedy of the European Union.” Soros show that there is a decrease in trust within the region and this following the emotions of people is bound to affect the stock market as well as the capital market.
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