Nonagenarian investor George Soros abstains from the market bubble.
‘We are in a crisis, the worst crisis in my lifetime since the Second World War” said the billionaire investor and founder of Soros Fund Management in his birthday interview with Italy’s La Repubblica.
“I would describe it as a revolutionary moment when the range of possibilities is much greater than in normal times. What is inconceivable in normal times becomes not only possible but happens. People are disoriented and scared. They do things that are bad for them and the world” he added.
“We are in a crisis, the worst crisis in my lifetime since the Second World War”
GEORGE SOROS
Unprecedented Fed liquidity is the main reason why George Soros abstains from the market bubble
George Soros echoes the view of so many top investors, that we are in a central bank induced asset bubble.
Soros acknowledged in his interview with Italy’s La Repubblica that investors are floating on asset bubbles fueled by Fed liquidity, which has created a situation that he now avoids. In his book “Alchemy of Finance” George Soros explained that there are “two simple propositions” which have historically given him an advantage, but since he revealed them he no longer has an edge.
“One is that in situations that have thinking participants the participants’ view of the world is always incomplete and distorted. That is fallibility,” said George Soros. “The other is that these distorted views can influence the situation to which they relate and distorted views lead to inappropriate actions. That is reflexivity.” Put simply the world is not the way we see it, which makes investors susceptible to making loss-making investments.
“George Soros echoes the view of so many top investors, that we are in a central bank induced asset bubble”
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So thinking participants’ view of the world is that they have a cognitive bias to see the world the way they would like rather than the way it is.
Soros is famously known for “The Man Who Broke The Bank of England” – 1992 Black Wednesday UK’s currency crisis Soros took a massive US$10 billion worth short GBP position which ended up netting him a cool $1 billion profit.
“I am confident that Trump will turn out to be a transitory phenomenon, hopefully ending in November” – Geroge Soros
George Soros abstains from the market bubble, but does that imply that he is not hedging, or protect himself from the bubble
George Soros is the type of investor who thrives in a crisis, his fortune was made during periods of great economic turmoil. “This is the worse crisis in my lifetime” said George Soros.
So the million-dollar question is whether George Soros is shorting the market, or maybe even buying the CBOE Volatility Index, which is down 31% over three months, at the time of my writing this piece.
George Soros abstains from the market bubble, but he is also confident that the US is better positioned to weather the pandemic than Europe, even though he is not a fan of the Trump administration
“Even in the United States, a confidence trickster like Trump can be elected president and undermine democracy from within” he said. “But in the U.S. you have a great tradition of checks and balances and established rules. And above all, you have the Constitution. So I am confident that Trump will turn out to be a transitory phenomenon, hopefully ending in November” he said.
