George Soros Is Getting Bearish on the Market

by Alyssa Oursler | August 16, 2013 3:37 pm

George Soros might be bullish on Apple (AAPL[1]), but he’s bearish on America.

The hedge fund manager recently filed Soros Fund Management’s 13F[2] for the second quarter. Headlines have been focusing on Soros’ stake in Apple[3], which increased by nearly 150% from the quarter prior, but fewer have noticed his huge put option stake on the SPDR S&P 500 ETF (SPY[4]).

For those who aren’t familiar with options, buying a put is a bearish move[5]. Translation: Soros is making a huge bet that the S&P 500 will head lower.

And while he has had puts on the S&P 500 for some time, his position keeps getting larger — it grew from $107 million at the beginning of Q1 to $400 million by the quarter’s end, and it tripled again during the second quarter to almost $1.25 billion.

As the Bullion Baron blog[6] put it:

“Soros reportedly made $1 billion betting against the British pound in 1992. We heard rumors of Soros making a $1 billion bet against the AUD[7] (a position that has done well if true). We heard when he made $1 billion betting against the yen[8]. Where are the headlines for his $1.25 billion bet against the stock market?”

It’s a fair question, considering the upped position makes it the largest holding in the Soros portfolio, at 13.5%. The next three top holdings, according to Whale Wisdom[9], are WebMD (WBMD[10]), Google (GOOG[11]) and JCPenney (JCP[12]) — and combined, they still don’t top his SPY puts.

It’s also worth noting that he has roughly $27 million wrapped up in calls (long bets) and actual units of the SPY, but that’s a mere fraction of his bearish play.

Consider it just one more warning sign. Yesterday was the worst day for the market[13] in two months, the Hindenberg Omen is still looming[14], all while experts like InvestorPlace Chief Technical Analyst Sam Collins have been warning of a selloff[15] since the beginning of the month.

So George Soros might know what he’s talking about.

As of this writing, Alyssa Oursler did not own a position in any of the aforementioned securities. Follower her on Twitter @alyssaoursler[16].

Endnotes:

  1. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  2. Soros Fund Management’s 13F: http://www.sec.gov/Archives/edgar/data/1029160/000114036113032845/xslForm13F_X01/form13fInfoTable.xml
  3. Soros’ stake in Apple: https://investorplace.com/2013/08/george-soros-13f-statement/
  4. SPY: http://studio-5.financialcontent.com/investplace/quote?Symbol=SPY
  5. buying a put is a bearish move: https://investorplace.com/2012/04/what-are-options/
  6. Bullion Baron blog: http://www.bullionbaron.com/2013/08/soros-fund-bets-on-lower-stock-market.html
  7. bet against the AUD: http://au.finance.yahoo.com/news/billion-dollar-soros-bet-right-on-the-money--010432812.html
  8. betting against the yen: http://www.reuters.com/article/2013/02/14/us-hedgefund-yen-sorosfund-idUSBRE91D0A520130214
  9. according to Whale Wisdom: https://whalewisdom.com/filer/soros-fund-management-llc
  10. WBMD: http://studio-5.financialcontent.com/investplace/quote?Symbol=WBMD
  11. GOOG: http://studio-5.financialcontent.com/investplace/quote?Symbol=GOOG
  12. JCP: http://studio-5.financialcontent.com/investplace/quote?Symbol=JCP
  13. worst day for the market: https://investorplace.com/2013/08/stocks-cisco-walmart-kohls/
  14. Hindenberg Omen is still looming: http://www.cnbc.com/id/100967640
  15. warning of a selloff: https://investorplace.com/2013/08/daily-stock-market-news-where-will-this-sell-off-stop/
  16. @alyssaoursler: http://twitter.com/alyssoursler

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