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This Expert Is Betting $2 Billion The Stock Market Will Crash

This Expert Is Betting $2 Billion Stock Market Will Crash

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One of the world’s most successful investors is so certain that the US stock market is set to crash that he’s betting $2.2 billion on it.

Financial records show that hedge fund titan George Soros is investing heavily in gold and positioning himself to profit from a major market collapse.

The moves are attracting attention because Soros has a long history of accurately predicting the collapse of market bubbles and profiting from them. In 2010 he bought large amounts of gold, predicting it was a bubble. Soros sold his gold investments in 2011, right before the price of gold peaked and cashed out.

“When I see a bubble forming, I rush in to buy, adding fuel to the fire,” Soros said in 2009. “That is not irrational.”

Soros’ actions indicate that he thinks stocks are in a bubble — and that the bubble is about to burst.

Why We Should Pay Attention

Soros is considered the most successful hedge fund operator in history, and his Quantum Fund has made $39.6 billion in profits in the last 40 years, according to The Irish Times.

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soros -- businessinsiderOver the years Soros has demonstrated an almost uncanny ability for predicting what the market is going to do. In 1992 Soros successfully bet that the British Pound was going to fall and made $1 billion.

In 2007 and 2008 his Quantum Fund made a 32 percent profit during a massive economic meltdown.

More recently he made $1 billion by shorting the Japanese Yen.

So it’s easy to see why Wall Street types get nervous when Soros starts predicting a collapse. What’s more interesting is how Soros is acting aggressively to cash in on his instincts.

What Soros is Doing

Soros has bought 11.3 million put options (agreements that allow him to sell an equity at a certain price in the future) on the S&P SPDR(NYSE: SPDR) exchanged traded fund (ETF) – a move that would benefit him greatly if the market does fall. The SPDR is a fund that invests in the 500 most valuable publicly traded stocks in the United States, the famed S&P (Standard & Poor’s) 500.

Soros’ purchases were exposed by a recent filing with the Securities & Exchange Commission (SEC). SEC paperwork reveals that Soros’ bet has increased from $299 million to $2.2 billion in recent months.

Soros and Gold

The SEC paperwork also revealed that Soros is buying lots of gold and gold-related stocks.

Soros Fund Management has purchased 2.05 million shares in the Market Vectors Gold Miners ETF, which invests in gold mining companies. Soros also bought 1 million equity shares in a gold mining company called Allied Nevada Gold Group (ANV).

“It … suggests that Soros may be thinking gold prices are near the bottom of the range,” Bill O’Neill, partner at commodities investment firm LOGIC Advisors in New Jersey, told Reuters.

It’s not just Soros who is warning about a potential collapse. Another legendary investor, Carl Icahn, warned investors about a “major asset bubble that continues to grow.”

Do you believe Soros is right about a potential crash? Tell us in the section below: 

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12 comments

    • You should. If the entire market collapses in this bubble, it will be worse than it was in 08 and 01, and before that in 85, and before that immediately proceeding the Great Depression. Everyone you know who has money tied up in mutual funds and the like will lose everything, while Soros, and anyone else is who smart enough to bet on the collapse, will make bank. It’s not happening today, but the jump from a million dollar price tag to a billion dollar one, in the case of Mr. Buffett, is not to be ignored by the lay person looking to increase their wealth 1000x. Buying put options for the right day would turn 4,000 dollars into 4 million.

  1. Of course he knows the economy is going to collapse, he is in on it and they are doing it on purpose.

  2. He is spot on. The stock Market will crash on the 2nd of Sept 2014.

    • -and 6 quarters later you are still wrong……

      • It’s now 2017 and the Dow just hit 20,000! No crash and none coming any time soon

        • My prediction is that the market will continue to rally a little higher through 2018. In October 2018, a correction will begin, reaching 30% by 2019. By, 2020, we will be in a nice bull run again. I do not think we will have another great recession this time, nor do I think that doomsday will happen. Much to the joy of those who can continue predicting doomsday for clicks.

  3. War is about all that will stop this bull. When the bombs start flying buy some puts on the high flyers like BBH (Biotech). Sell them back fast after they pop.

  4. Of course he knows. He is funding the collapse.

  5. Soros a millionaire hedge fund manager really – isn’t he supposed to be some poor idealist college professor teaching Barack and Hillary how to tax off rich peoples money…. who’d a thought he was a rich guy!!!

  6. So…did the collapse happen, or….?

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