Market Crash Claim #2: The Brilliant Bearish Billionaire
Legendary investor George Soros has a net worth of $23 billion. He famously made $1 billion on a trade in which he shorted the British pound. So when it was recently disclosed that Soros’ hedge fund ramped up a huge bet on a market decline, of course it garnered all sorts of nervous attention.
True, Soros raised his bearish against the S&P 500 to $1.3 billion from $470 million, accounting for more than 11% of the portfolio. But it’s not as simple as all that.
The billionaire doesn’t operate Soros Fund Management on a daily basis anymore. Furthermore, the majority of the fund is in long positions on major stocks — FedEx (FDX), Halliburton (HAL) and others — that would get creamed in a market meltdown. That makes Soros’ put on the S&P 500 look a lot more like a hedge than a prediction of a crash.